Gen Math LAS3
Gen Math LAS3
Gen Math LAS3
Compound Interest – is interest calculated on the initial principal, which also includes all the
accumulated interest from previous periods of the money.
Compound interest formula and calculations:
�
Compound Interest formula: � = � � + � kt
Periods:
Where: A = amount
P = Principal amount k = 1 (annually, in a year)
r = rate k = 2 (semiannually, every 6 months)
k = period (interval for compunding) k = 4 (quarterly, every 3 months)
�
= periodic rate k = 12 (monthly)
�
t = time
Examples:
1. Find the compound amount if 20,000.00 is 2. Find the compound amount if 65,000.00 is
deposited for 3 years at 4% compounded borrowed at 8% compounded quarterly for 5
semiannually. years.
Given: P = ₱20,000 r = 4%, k = 2 Given: P = ₱65,000 r = 8%, k = 4 (quarterly), t
(semiannually), t = 3 years = 5 years
� kt
Solution: � = � � + � Solution: � = � � + �
� kt
0.04 (2)(3)
A = 20,000 1 + 0.08 (4)(5)
2 A = 65,000 1 + 4
0.04 (6)
A = 20,000 1 + 0.08 (20)
2 A = 65,000 1 +
A = 20,000 1.02 (6) 4
A = 20,000 1.126162419 A = 65,000 1.02 (20)
A = 22,523.25 A = 65,000 1.4859474
Compound amount: ₱22,523.25 A = 96,586.58
Compound amount: ₱96,586.58
Activity: Solve what is asked in each item. Write your solution and answer at the back of the paper.
Given: If ₱100,000.00 is invested for 5 years at 2% compounded monthly, find the:
1. Compounded amount
2. Future Value
3. Present Value Box for
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