Simple interest (Thom)

FORMULA: Interest = P x R x T
Option 1
R3 000 x 10% x 2 years = R600
OR Option 2
R3 000 x 10% x 6/12 = R150 R150 x 4 = R600
OR Option 3
R3 000 x 10% x 6/12 x 4 = R600

Compound interest (Tshidi)
Option 1 Year 1:
R3 000 x 10% = R300
Year 2: R3 300 x 10% = R330 Total interest = R630
OR Option 2 FORMULA: P x (1 + r)nR3 000 x (1+10/100)2 R3 000 x (1.1)2 =R3 630 Total interest = R3 630 – R3 000 = R630
3. Better investment option: Tshidi's investment option/flexideposit account/An investment on compounded/ compound interest is better.
Motivation: Tshidi receives more interest/R30 more interest/has a higher return on her invest ment over 2 years/earns interest on interest accrued.