Solution to Kahoot Problems

1. How much is the future value of $10000 if it is invested at a simple interest rate of 7% for
15 years?

Given:
𝑛 = 15
𝑖 = 0.07
𝑃 = $10000
Solution:
𝐹 = 𝑃(1 + 𝑛𝑖)
𝐹 = 10000(1 + 0.07(15)) = $20,500

2. A total of $1,200 is invested at a simple interest rate of 6% for 4 months. How much
interest is earned?

Given:
𝑛 = 4 𝑚𝑜𝑛𝑡ℎ𝑠
𝑖 = 0.06 𝑝𝑒𝑟 𝑦𝑒𝑎𝑟
𝑃 = $1200
Solution:
𝐼 = 𝑃𝑛𝑖
4
𝐼 = 1200 ( ) (0.06) =
12
𝐼 = $24
3. What is the present value for a land that will be worth P1.2M in 10 years assuming an
interest rate of 8%?
Given:
𝑛 = 10 𝑦𝑒𝑎𝑟𝑠
𝑖 = 0.08 𝑝𝑒𝑟 𝑦𝑒𝑎𝑟
𝐹 = 1,200,000.00
Solution:
Use compound interest formula to solve for P,
𝐹 = 𝑃(1 + 𝑖)𝑛
1200000 = 𝑃(1 + 0.08)10
𝑃 = 555,832.20

4. How much money will be in an account after 5 years if $4000 is deposited now with 6%
interest compounded quarterly?
Given:
𝑛 = 5 𝑦𝑒𝑎𝑟𝑠
𝑟 = 0.06 𝑝𝑒𝑟 𝑦𝑒𝑎𝑟
𝑃 = $4000
 Solution:
Use compound interest formula to solve for F,
𝑟 𝑚𝑛
𝐹 = 𝑃 (1 + )
𝑚
0.06 4(5)
𝐹 = 4000 (1 + ) = 5387.42
4

5. How long will it take for $10000 to double if the it the interest rate is 8% compounded
monthly?

Given:
𝑛 =? 𝑦𝑒𝑎𝑟𝑠
𝑟 = 0.08 𝑝𝑒𝑟 𝑦𝑒𝑎𝑟
𝑚 = 12 𝑐𝑜𝑚𝑝𝑜𝑢𝑛𝑑𝑖𝑛𝑔𝑠
𝑃 = $10000
𝐹 = $20000
Solution:
Use compound interest formula to solve for n,
𝑟 𝑚𝑛
𝐹 = 𝑃 (1 + )
𝑚
0.08 12(𝑛)
20000 = 10000 (1 + )
12
𝑛 = 8.69 ≈ 9 𝑦𝑒𝑎𝑟𝑠