Question

Compound Interest

8.) The amount of P 20,000 was deposited in a bank earning an interest of 6.5% per annum. Determine the total amount at the end of 17 years if the principal and interest were not withdrawn during this period.

9.) The amount of P 150,000 was deposited in the bank earning ang interest of 7.5% per annum. Determine the total amount at the end of 16 years, if the principal and interest were not withdrawn during the period.

10.) Find the present worth of a future payment of P290,000 to be made in 4 years with an interest of 9% compounded annually.

11.) Kristel received inheritance of 100,000 from her grandfather, if he invested a big money 25 years ago with a 25% interest. How much did the grandfather deposited?

Answer 1

8.
Total amount = 20000 * (1+0.065)¹⁷
Total amount = 20000 * 2.917
Total amount = P 58340

9.
Total amount = 150000 * (1+0.075)¹⁶
Total amount = 150000 * 3.181
Total amount = P 477150

10.
Let pw be the present worth

P290000 = pw*(1/(1+0.09)⁴)
When you solve it, you get the value of pw, as below
pw = P205443

11.
Let y be the amount grandfather deposited

100000 = y*(1 + 0.25)²⁵
100000 = y*(1.25)²⁵
100000 = y*264.7
y = 100000 / 264.7
y = 377.80

The amount that grandfather deposited = 377.80