1.How much would Php. 10,000,000 amount in 5 years at 16% interest rate and compounded quarterly?
A = P(1 + )nt
A = final amount = ?
P = beginning amount = 10,000,000
r = interest rate expressed as a decimal = 0.16
n = the number of compoundings each year = 4 (quarterly)
t = the number of years = 5
A = 10000000(1 + )(4)(5)
A = 10000000(1 + 0.04)20
A = 10000000(1.04)20
A = Php 21911231.43
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2. Mr. Cruz deposited money 500 pesos in the bank which earns 5% annual interest compounded annually.How much is his money after 2 years ?
A = P(1 + )nt
A = final amount = ?
P = beginning amount = 500
r = interest rate expressed as a decimal = 0.05
n = the number of compoundings each year = 1 (compounded annually)
t = the number of years = 2
A = 500(1 + )(1)(2)
A = 500(1 + 0.05)2
A = 500(1.05)2
A = Php 551.25
Edwin