Question

1. Twenty thousand pesos is a deposit in an account that pays 8% interest. Find the account balance after 10 years if the interest is compounded quarterly.

2. John deposit 5,000 pesos in a bank paying 12 % compounded quarterly. After 4 year's, john decided to close her account. How much money would she be able to get from the bank?

Answer 1

1. The future value is:

$FV = 20,000×(1+0.08/4)^{40} = 44,160.79.$

2. The future value is:

$FV = 5,000×(1+0.12/4)^{16} = 8,023.53.$