Mr. moshokoa wants to start saving early for his son's tertiary studies one day. he wants to pay 350 weekly into his account that returns 8,5% interest per year. how many years will it take him to have r400000 in the account?

The question illustrated above is an annuity payment problem, where an equal amount of 350 is paid weekly into an account yeilding an annual rate of 8.5%.

The future value of annuity is given by


where: Fv = 400,000
P = 350
r = 8.5% = 0.085
t = 52  {i.e. 52 weeks are in 1 year}
n is the number of years it will take for him to have R400,000.

Thus, we have




Therefore, it will take 12 years and 5 months for the money in the account be R400,000.

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