UNIVERSITY OF SOUTH AFRICA (UNISA)
College of Economic and Management Sciences
⋄
ASSIGNMENT 2
Semester 1, 2026
⋄
Module Code: FIN2602
Module Name: Personal Financial Management
Assignment No.: Assignment 2
Due Date: 2026
Semester: Semester 1, 2026
Submitted in partial fulfilment of the requirements for Personal Financial Management
at the University of South Africa.
, UNISA | FIN2602 Assignment 2 – 2026
Question 1: Time Value of Money
The time value of money is one of the most practical ideas in personal finance. A rand today
is worth more than a rand tomorrow because money held now can be invested and grow. The
calculations below apply the standard simple interest and compound interest formulas to
concrete scenarios (Gitman, Joehnk and Smart, 2011).
1.1 Future Value of a Lump Sum: Simple Interest (R3 000 at 10% 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 = R3 000 (present value / lump sum invested today)
• r = 10% = 0.10 (simple interest rate per annum)
• n = 15 years
F V = 3 000 × (1 + 0.10 × 15)
F V = 3 000 × (1 + 1.50)
F V = 3 000 × 2.50
F V = R7 500
After 15 years, a R3 000 lump sum invested at 10% per annum simple interest will grow to
R7 500.
Implementation Insight
With simple interest, only the original principal earns interest each year. After 15 years,
the total interest earned is R4 500 (R300 per year), which is added to the principal to
give R7 500.
Page 1 of 11
College of Economic and Management Sciences
⋄
ASSIGNMENT 2
Semester 1, 2026
⋄
Module Code: FIN2602
Module Name: Personal Financial Management
Assignment No.: Assignment 2
Due Date: 2026
Semester: Semester 1, 2026
Submitted in partial fulfilment of the requirements for Personal Financial Management
at the University of South Africa.
, UNISA | FIN2602 Assignment 2 – 2026
Question 1: Time Value of Money
The time value of money is one of the most practical ideas in personal finance. A rand today
is worth more than a rand tomorrow because money held now can be invested and grow. The
calculations below apply the standard simple interest and compound interest formulas to
concrete scenarios (Gitman, Joehnk and Smart, 2011).
1.1 Future Value of a Lump Sum: Simple Interest (R3 000 at 10% 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 = R3 000 (present value / lump sum invested today)
• r = 10% = 0.10 (simple interest rate per annum)
• n = 15 years
F V = 3 000 × (1 + 0.10 × 15)
F V = 3 000 × (1 + 1.50)
F V = 3 000 × 2.50
F V = R7 500
After 15 years, a R3 000 lump sum invested at 10% per annum simple interest will grow to
R7 500.
Implementation Insight
With simple interest, only the original principal earns interest each year. After 15 years,
the total interest earned is R4 500 (R300 per year), which is added to the principal to
give R7 500.
Page 1 of 11
