SOLUTION: If P135,650 is the maturity value of a sum invested at 3.2% compounded semi-annually for 9 years and 6 months, find the present value and the compound interest earned.

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Question 1173005: If P135,650 is the maturity value of a sum invested at 3.2% compounded semi-annually for 9 years and 6 months, find the present value and the compound interest earned.
Answer by ikleyn(52781)   (Show Source): You can put this solution on YOUR website!
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If P135,650 is the maturity value of a sum invested at 3.2% compounded semi-annually for 9 years and 6 months,
find the present value and the compound interest earned.
~~~~~~~~~~~~~~~~~~~~~~~ 

In this problem, the present value is THE SAME as the original deposited amount.


So, let X be the original deposited amount.


From the problem, you can write this equation

    135000 =  = .


From this equation, you find  X =  = P99,851.21.


It is the starting value and, at the same time, is the present value.


The interest earned is the difference  P135,000 - P99,851.21 = P35,148.79.


ANSWERS.  The present value is P99,851.21.

          The interest earned is P35,148.79.

Solved.



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