Question

If ₱10,000 is deposited at the beginning of each month in a bank that pays 12% interest compounded monthly, what is the final value at the end of 3 years and 6 months?

Answer 1

Answer:

$15187.899.

Explanation:

The compound interest formula is given by

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

where

A = final amount

P = inital amount

r = interest rate

n = number of times interest applied per period

t = time interval

Now in our case, the above variables take the following values:

A = unkown

P = $10,000

r = 12 /100

n = 12 (months / year )

t = 3 years 6 months = 3.5 years

Therefore, putting in the above values into the formula gives

$A=10,000(1+\frac{12/100}{12})^{12\cdot3.5}$

which evaluates to give

$\boxed{A=\ 15187.899.}$

Hence, the final value is $15187.899.