Answer to Question #187041 in Financial Math for Bob Errol R. Gregorio

Question

1. Aina and Joan invest in each account. Aina invests PHP 275,000 at 10% for 15 years and Joan invests PHP 275,000 at 12% for 12 years. Both investments are compounded annually. Which one will yield more?

Answer 1

Aina will get: $FV = 275,000×1.1^{15} = 1,148,743.25.$

Joan will get $FV = 275,000×1.12^{12} = 1,071,393.4$

So, the first yields more.