Term 3 · Week 1 · Compound Interest

Challenge problem

Challenge

How much must be invested today at 6% compounded monthly to have ₱100,000 in 5 years?

Show step-by-step solution

Answer: 74137.22 ₱

$i = 0.005$ , $n = 60$ .
$P = \dfrac{F}{(1+i)^n} = \dfrac{100{,}000}{1.005^{60}} \approx \dfrac{100{,}000}{1.348850} = 74{,}137.22$ .

Common errors to watch for

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