Question

Adrian Ahren invests ₱350,000 at 16% interest compounded quarterly, for 7 years. Find thecompound amount of Adrian Ahren’s investment.

Answer 1

Compound amount is:

$A=P(1+\frac{r}{n})^{nt}$$\begin{gathered} A=\text{ final amount} \\ P=\text{ Initial amount} \\ r=\text{ interest rate} \\ n=\text{ number of times interest applied per time period} \\ t=\text{ number of time periods} \end{gathered}$

Initial amount (p) = 350000.

Time (t) = 7

n = 4 (quarterly)

r (interest rate) = 16%

$\begin{gathered} r=\frac{16}{100} \\ r=0.16 \end{gathered}$$\begin{gathered} A=P(1+\frac{r}{n})^{nt} \\ A=350000(1+\frac{0.16}{4})^{4\times7} \\ A=350000(1+0.04)^{28} \\ A=350000\times2.998 \\ A=1049546.16 \end{gathered}$