Solve the following sample problems.

1. If P5000 shall accumulate for 10 years at 8% compounded quarterly. Find the compound interest at the end of
10.

2. A sum of P1,000 is invested now and left for 8 years, at which time the principal is withdrawn. The interest that
has accrued is left for another eight years. If the effective annual interest rate if 5%, what will be the withdrawal
amount at the end of the 16th year?

3. P1,500.00 was deposited in a bank account, 20 years ago. Today it is worth P3,000.00. Interest is paid semi-
annually. Determine the interest rate paid on this account.
years
4. You are given the option to borrow P7,000 you need for one year. Which of this will you pay lesser interest? To
borrow from a friend at an interest of 1.5% per month or a loan from a bank at a rate of 18% per year?

5. How much money should be deposited now in a savings account to yield P1,000 in 6 years? The annual interest
rate is 10% compounded semi-annually.

6. Find the compound amount and interest if P2,500 in invested at 8% compounded quarterly for 5 years and 6
months.

7. Mr. Ayala borrows P1000. In 4 years the money become P1,608.44 compounded bimonthly. Find the nominal
interest.

8. If you borrow money from your friend with simple interest of 12%, find the present worth of P20,000 which will
due at the end of nine months.

9. What is the present worth of P27,000.00 due in 6 years if the money is worth 13% and is compounded semi-
annually?

10. A student deposits P1,500.00 in 9% account today. He intends to deposit another P3,000.00 at the end of two
years. He plans to purchase in five years his favorite shoes worth P5,000.00. Calculate the money that will be left
in his account one year after the purchase.

11. If P500 is invested now, P700 two years from now, and P900 four years from now (all at 4%), what will be the
total amount in 10 years?

12. A principal of 2000 pesos is placed in a savings account at 3% per annum compounded annually. How much is in
the account after one year, two years and three years?

13. What is the compound amount of P550 left for eight years with interest at 6% compounded semi-annually?

14. A firm borrows P2000 for 6 years at 8%. At the end of 6 years, it renews the loan for the amount due plus P2000
more for 2 years at 8%. What is the lump sum due?