PERFORMANCE TASK #3 IN BUSINESS MATHEMATICS

(Present Value and Future Value)

Direction: Answer the given problems below to show the comparative solution
between the present value and future value.

TIME VALUE OF MONEY

PRESENT VALUE FUTURE VALUE
Problem: Problem:
How much should you deposit in a bank Gusion deposited ₱10 000 in a bank
paying 6% compounded semi-annually to which gives 8% compounded quarterly
accumulate an amount of ₱80 000 in 6 and let it stay there for 5 years. Find the
years. future value.
USING THE FORMULA USING THE FORMULA

GIVEN: SOLUTION:
GIVEN: SOLUTION: P=₱10,000 A=10,000(1+0.08/4) 20
A=₱80,000 P=80,000/(1+0.06/2) 12 r=0.08 A=14,869.47396
r=0.06 P=56,110.39042 t=5 years FINAL ANSWER:
t=6 years FINAL ANSWER: m=4 A=₱14,856.47
m=2 P=₱56,110.39 mt=20
mt=12 r/m=0.32
r/m=0.03 (1+r/m) =1.32
(1+r/m) =1.03 (1+r/m) mt=1.4859
(1+r/m) mt=1.4859
USING PRESENT VALUE USING FUTURE VALUE
CALCULATOR CALCULATOR
80,000 10,000
6 years 5 years
0.06 0.08
2 4

56,110.39 14,856.47