First Reporter Compound Interest .2
First Reporter Compound Interest .2
First Reporter Compound Interest .2
INTEREST
1.1 COMPOUND INTEREST
A=P
Where:
A = accumulated amount
P = original investment amount
R = interest rate
N = number of times the money is compounded
T = time
Sample Problems on calculating the Accumulated
Amount using Compound Interest at regular
intervals like Monthly, Quarterly, Semi-Annually,
Annually
a. If an amount of P5,000 is deposited into a savings
account at an annual interest rate of 5%, compounded
monthly, the value of the investment after 10 years?
If an amount of $ 5,000 is deposited into a savings account at an annual interest rate of 5%, compounded monthly, the
value of the investment after 10 years can be calculated as follows... P=5000 r=5/100=0.05 decimal. n=12 t=10 If we
plug those figures into the formula, we get the following. A=50001+0.05/121211=8235.0 So, the investment balance
after 10 years is $ 8,235.05. (2021). Gauthmath.com. https://www.gauthmath.com/solution/If-an-amount-of-5-000-is-
deposited-into-a-savings-account-at-an-annual-interest--1703416663059462
https://youtu.be/OQ9Mv2jwQWo
4. a Use the compound interest formula to calculate the total value of an investment of $ 10000 if interest is paid at
3.2% per year compounded semi-annually for two years. Show your work. A=Sunderline. (2021). Gauthmath.com.
https://www.gauthmath.com/solution/4-a-Use-the-compound-interest-formula-to-calculate-the-total-value-of-an-
investm-1703778520343557
FV = PV ( 1+ r )^n
PV = FV / (1 + r )^n
Where:
FV = Future Value
PV = Present Value
I = Annual Interest Rate
N = Number of compounding periods per year
Sample Problems help you define a
product discount that scales based on
each unit of quantity for your product
using Compound Discount.
a. Assume you put 20,000 dollars (principal) in a bank
for the interest rate of 4%. How much money will bank
give you after 10 years?
1 1% 1.4889
8 % x i 1.5200 0.0311. -0.0755
1- 1.5664
x = 0.0311
1 % 0.0755
8
Illustrative Example 2:
In what time will 2,000 amount to 3,650 at 4%
compounded semi-annually.
Solution:
P = 2,000 F = 3,650 i = 2%
F = P (1+i )n
3,650 = 2,000 (1+2%)n