Question

Calculate the compound amount of ₱300,000 invested at 8% interest compounded quarterly, for 5 years.

Answer 1

Using the compound interest formula:

$\begin{gathered} A=P(1+\frac{r}{n})^{nt} \\ \end{gathered}$

Where:

A = Amount

P = Principal = 300000

r = Interest rate = 8% = 0.08

t = time = 5

n = Number of times interest is compounded = 4

so:

$\begin{gathered} A=300000(1+\frac{0.08}{4})^{4\cdot5} \\ A=300000(1+\frac{0.08}{4})^{20} \\ A=300000(1.02)^{20} \\ A=445784.2188 \end{gathered}$