There are only four formulae to learn in Business Studies. Some questions in Section B of your exam paper require you to use these formulae. If you master the formulae below you will be able to successfully answer any exam question requiring a calculation.

Formula 1: Simple interest

Example: You invest R600 at a rate of 6% interest for 3 years.
= 600 x (6/100) x 3 = R108
After the 3 years, you will have R600 + R108 = R708

Formula 2: Compound interest

Example: You invest R600 at a rate of 6% for 3 years compounded annually.
= 600 x (1 + 6/100)³ = 600 x (1 + 0,06)³ = 600 x (1,06)³ 
= 600 x (1,06 x 1,06 x 1,06) = 600 x 1,191 = R714,60

Formula 3: Return on investment

Example: You invest R600 and earn interest of R114,60. What is your percentage return?
= (114,60/600) x (1/100) = 19,1%

Note: If you are asked for the annual return on investment and if the investment period is more than one year, divide the answer by the number of years.

Formula 4: Insurance payouts

Example: James has insured the contents of his house for R300 000. His television was stolen. It has a market value of R3 500. The insurance assessor valued the household contents at R420 000. James puts in a claim for R3 500. How much will the insurance company pay?

Find more study hints and tips and plenty of practice in the X-kit Achieve Business Studies Grade 12 Exam Practice Book. Be ready for your exams and achieve the best results you possibly can. 
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