Determine the amount that has to be invested now to be worth R10000 in 8 months' time, if the annual simple interest rate is 9,75%

Question

It is Basic Financial Calculations.. Please answer as soon as possible

Answer 1

9.75% is the rate for 12 months so for 8 months it will be 8/12=2/3 of 9.75=2/3 of 9 plus 2/3 of 0.75=6.5%.

The amount invested would increase by 6.5% in 8 months and would be worth 1.065 times its original value, so to find out what that value was we divide R10000 by 1.065=10000/1.065=R9389.67.