Answer to Question #175120 in Financial Math for Kim Galvez

Question #175120

Solve the following problems. Show your solutions to support your answer.

1. At what rate will ₱ 6,500 accumulate to ₱ 27,000 for 3 years and 6 months, if compounded every 5 

months?

2. Accumulate ₱ 25,000 for 2 years and 5 months at 6 ½%, compounded every two months.

3. Briefly explain the difference between a “ 7% compounded monthly for a year” and a “7% simple 

interest for a year.”



1
Expert's answer
2021-04-14T14:11:56-0400

A=P(1+r/n)A=P(1+r/n) nt

1.

27000=6500(1+r/2.4)27000=6500(1+r/2.4)7.2

7.2 rt (270/65)=(1+r/2.4)(270/65)=(1+r/2.4)

r=0.524873784100r=0.524873784*100

r=52.487r= 52.487%


2.

A=25000(1+0.065/6)A=25000(1+0.065/6)29/6

A=25000×1.053459511A=25000\times1.053459511

A=26336.48777A=26336.48777


3.

Compoundinterest=AmountPrincipalCompound interest=Amount-Principal

Assuming principal = 1

A=P(1+r/n)A=P(1+r/n)nt

A=1(1+0.07/12)A=1(1+0.07/12)12

A=1.07229008A=1.07229008

Compound interest =1.072290081=0.07229008= 1.07229008-1=0.07229008


Simpleinterest=P×R×TSimple interest=P\times R \times T

=1×0.07×1=0.07=1 \times 0.07 \times 1=0.07



Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!

Comments

No comments. Be the first!

Leave a comment