COMPOUND

INTEREST
 EXAMPLE 1

• How long will it take P1,000 to

COMPOUND amount to P1,346 if invested at 6%
INTEREST compounded quarterly.
 EXAMPLE 2

• Compute the future amount of

COMPOUND P5,000 for 10 years at 8%
INTEREST compounded annually, semi-
annually, quarterly, and monthly
 EXAMPLE 3

• How long will it take for an

COMPOUND investment to double its amount if
INTEREST invested at an interest rate of 6%
compounded bi-monthly?
 EXAMPLE 4

• Mr. Adam deposited P120,000 in a

COMPOUND bank who offers 8% interest
INTEREST compounded quarterly. If the interest
is subject to a 14% tax, how much
will he receive after 5 years?
 EXAMPLE 5

• A man lends P6,000 at 6% simple interest

COMPOUND for 4 years. At the end of this time he

invests the entire amount (principal plus
INTEREST interest) at 5% compounded annually for
12 years. How much will he have at the
end of the 16-year period.
 EXAMPLE 6
• Which will you choose to invest in
COMPOUND to gain the most interest? Prove your
answer by mathematical solution
INTEREST
a. 5% compounding annually.
b. 5% compounding monthly.
c. 5% compounding quarterly.
 EXAMPLE 7
• On his 6th birthday, a boy is left with an
inheritance invested on that same day. The
COMPOUND inheritance will be given in a lump sum of
INTEREST P50,000 on his 21st birthday. What is the
present value of the inheritance as of the
boy’s 6th birthday, if the interest is 8%
compounded semi-annually?
 EXAMPLE 8
• Mrs. Ledesma invested P20,000 in an
account earning 4% compounding quarterly.
COMPOUND She withdraws half of the accumulated
INTEREST value after 10 years, a quarter of which is
subjected to a 25% tax. What is her net
withdrawal on the 10th year and what will
be future worth of the remaining investment
6 years thereafter?