Question

Carlos lends P50,000 for 3 years at 5% compounded semi-annually. Find the future value and interest of this amount.

Answer 1

Given:

Principal amount = 50000

Time = 3 years

Rate = 5% compounded semi-annually

The future value is calculated as,

`\begin{gathered} A=P(1+(r)/(n))^(nt) \\ P=50000,r=(5)/(100),n=2,t=3 \\ A=50000(1+(5)/(100*2))^(2*3) \\ A=50000(1.025)^6 \\ A=57984.67 \end{gathered}`

The interest is calculated as,

`\begin{gathered} A=P+I \\ 57984.67=50000+I \\ I=7984.67 \end{gathered}`

Answer:

The future value is 57984.67, and the interest of this amount is 7984.67.