FIN2602 Assignment 2 Semester 1 |Personal Financial Management| Due 2026

UNIVERSITY OF SOUTH AFRICA
College of Economic and Management Sciences


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FIN2602: Personal Financial Management

Assignment 2 — First Semester, 2026

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FIN2602
Module Code:
Personal Financial Management
Module Name:
Assignment 2
Assignment Number:
2026
Due Date:
30
Total Marks:




Submitted in partial fulfilment of the requirements
for Personal Financial Management — UNISA 2026

, UNISA | FIN2602 Assignment



Question 1: Time Value of Money

The time value of money is a foundational principle in personal financial management, built
on the recognition that a rand received today is worth more than the same rand received in
the future because of its capacity to earn returns over time (Gitman, Joehnk and Smart, 2011).
The questions below work through simple interest, compound interest, annuity growth, and
the real purchasing power of a future lump sum.


1.1 Future Value of R3 000 at Simple Interest (10% p.a. over 15 years)


Simple interest is calculated only on the original principal. The formula is:



F V = P V × (1 + r × n)


where P V is the present value, r is the annual interest rate, and n is the number of years.

Substituting the given values:



F V = R3 000 × (1 + 0.10 × 15)

F V = R3 000 × (1 + 1.50)

F V = R3 000 × 2.50

F V = R7 500


After 15 years, the R3 000 lump sum grows to R7 500 under simple interest at 10% per an-
num.

Implementation Insight
Simple interest does not allow for compounding, meaning the interest earned each
year is always based on the original R3 000. The investor earns R300 per year (R3 000
× 10%), which totals R4 500 in interest over 15 years, resulting in a final balance of
R7 500.




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