Question 1188273
there are two ways to interpret what you just said.


the money compounds 3% monthly could mean that the interest rate is 3% per month.


it could also means that the interest rate id 3% per year compounded monthly.


both options appear to be extreme.


3% per month equates to 36% per year.


that's a high annual percent cost.


3% per year equates to .25% per month.


that's a low monthly percent cost.


i'll do it both ways and you can decide which makes more sense for you.


the calculator at <a href = "https://arachnoid.com/finance/index.html" target = "_blank">https://arachnoid.com/finance/index.html</a> was used for my analysis.


here's the first way.


<img src = "http://theo.x10hosting.com/2021/113003.jpg" >


the interest rate for each 6 month period is calculated as follows:


.36 / 12 = .03 per month.
1.03 ^ 6 - 1 = .1940522965 for each 6 month period.
multiply that by 100 to get 19.40522965% for each 6 month period.


here's the second way.


<img src = "http://theo.x10hosting.com/2021/113002.jpg" >


the interest rate for each 6 month period is calculated as follows:


.03 / 12 = .0025 per month.
1.0025^6 - 1 = .0150940632 for each 6 month period.
multiply that by 100 to get 1.50940632% for each 6 month period.


here's an excel spreadsheet printout of the 6 month by 6 month remaining balance.


<img src = "http://theo.x10hosting.com/2021/113004.jpg" >


the first way assumes 36% / 12 = 3% per month.


the second way assumes 3% per year / 12 = .25% per month.


there were 4 six month time periods in both cases.


if it's done the first way, then the economic value of the washing machine would be 5000 + 15709.15 = 20709.15 pesos.


if it's done the second way, then the economic value of the washing machine would be 5000 + 23120.99 = 28120.99 pesos.


let me know if you have any questions regarding this.


theo