Proceeds = P47,169.81 ?

= P54,080

Example 2

At compound interest,

F=P ( 1+ⅈ )n
= 60,000 ( 1+.04 )2
= P 64,896

P = P50,000 F = P60,000 (16%, m=4)

Proceeds = P56,603.77 ? = P64,896

Example 3

At compound interest,

F=P ( 1+ⅈ )n
= 60,920.14 ( 1+.04 )2
= P 65,891.22

P = P50,000 F = P60,920.1 (16%, m=4)

Proceeds = P57,471.83 ? = P65,891.22

In all these examples, we note the following:

1. The present value was P50,000

2. The computed amounts after two years varied depending on the type of interest formula was
applies
3. In the second set of examples, these different amounts were discounted to determine their
respective proceeds. The resulting computed proceeds are different from one another.
4. In the third set of examples, these different amounts served as present values to accumulate and
arrive at the respective final amounts

Lastly, these examples illustrated that financial obligations are dependent largely on the agreed dates.
The type of interests, including the frequency of conversions and specific interest rates, significantly
affect the viability of financial transactions. Oftentimes, when investments are presented to us, it is wise
to make comparisons and take all these interest variables into consideration. After all, they determine the
amount of financial yield.