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1-4 CompoundInterest 12302011
1-4 CompoundInterest 12302011
1-4 CompoundInterest 12302011
F P(1 i) n
P - original principal
j - rate of interest per year
m - frequency of conversion
j
i - interest rate per priod; i m
F P(1 i) n
25,000(1 .10) 12
F Php78,460.71
F P(1 i) n
75,0001
36
.05
12
F Php87,110.42
F P(1 i) n
9
5 12 1
150,000(1.07)
Php221,333.92
1.4 Compound Interest
More Formulas:
P F(1 i) n
1
F
j m 1
n
logFP
n
log(1 i)
F P(1 i) n
25,200(1.03)16
Php40,438.60
F P(1 i) n
1,800,000(1.055)15
Php4,018,457.69
n
P F(1 i)
75
46,000(1.01)
Php21,809.96
1
1
F 56,471.27
j m 1
1
n 33
4
P 25,000
10%
1.4 Compound Interest
11. Given F = Php34,500, P = Php30,000,
j = 15%, m = 12, find n.
logFP log72,157.25
48,200
n 54 periods
log(1 i) log(1.0075)
F P(1 i) n
350,000(1.01)74
Php730,886.10
CP DP P 5,00014,890.47 Php19,890.47
F P(1 i) n
10 12
1,400,000(1.04)
Php2,113,382.46
1
1
F 40,000
j m 1
1
n 28
4
P 30,000
4.13%
1.4 Compound Interest
37. If Php80,000 is invested at the rate of 6 %
compounded annually, when will it earn
interest of Php15,000?
logFP log95,000
80,000
t 2.73 years
m log(1 i) log(1.065)
29,000 690,000(1.035)32
Obligation(s)
Payment(s) 1 6 8
x
=
29,000(1.085)5 690,000(1.035)32 (1.085)2 x
x Php1,805,909.97
1.4 Compound Interest
47. For an amount borrowed from a credit cooperative,
Janice needs to pay Php100,000 in 5 years. After 2
years , she made a Php50,000 payment. If money is
worth 8% compounded semi-annually, how much
would she have to pay on the 5th year to fully settle
the loan?
100,000
Obligation(s)
Payment(s) 2.5 5
50,000 x
Obligation(s)
Payment(s) 2.5 5
50,000 x
=
50,000(1.04) 5
x
100,000
x Php39,167.35
1.4 Compound Interest
49. If money is worth 8% effective, what single
payment in 5 years will repay the following two
debts:
a) Php125,000 due at once
b) Php500,000 due in 8 years
125,000 500,000
Obligation(s)
Payment(s) 1 5 8
x
Obligation(s)
Payment(s) 1 5 8
x
=
125,000(1.08) 5 500,000(1.08)3 x
x Php580,582.13
1.4 Compound Interest
51. As payments for debts of Php300,000 due at the
end of 4 years and Php485,000 at the end of 8 years,
Jane agrees to pay Php50,000 at once and
Php250,000 at the end of 5 years. She will make a
third and final payment at the end of 10 years. How
much would it be if money is worth 14%
compounded semi-annually.
300,000 485,000
Obligation(s)
Payment(s) 1 4 5 8 10
50,000
250,000 x
1.4 Compound Interest
300,000 485,000
Obligation(s)
Payment(s) 1 4 5 8 10
50,000
250,000 x
=
4
12
300,000(1.07) 485,000(1.07)
50,000(1.07)20 250,000(1.07)10 x
x Php626,121.48
1.4 Compound Interest