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Term 3 · Week 1 · Compound Interest

Basic problem

Basic

Find the maturity value of ₱15,000 invested at 5% per year compounded annually for 3 years.

Show step-by-step solution

Answer: 17364.38 ₱

  1. A=P(1+r)t=15,000(1.05)3A = P(1+r)^t = 15{,}000(1.05)^3.
  2. (1.05)3=1.157625(1.05)^3 = 1.157625.
  3. A=15,000×1.157625=17,364.38A = 15{,}000 \times 1.157625 = 17{,}364.38 pesos.

Common errors to watch for

  • Using simple interest 15,000(1+0.05×3)=17,25015{,}000(1+0.05\times3)=17{,}250.

Budget of Work competencies

  • gm11.t3.w1.c1
    Solve problems involving compound interest, including maturity value, future value, nominal rates, and number of terms.

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