Question

Find the final compound amount of 15,900 pesos at 5.5% interest compounded annually for 18 months

Answer 1

17,229.62 pesos

Explanation:

The compound interest formula for something that is compounding annually is

`FV=PV(1+i)^n`

This question is a litte tricky because it's in months and not years

We can convert this into years by dividing it by 12

18/12=1.5 therefore n=1.5

which means we have

`15900(1+.055)^(1.5)`

Compute this and get

17,229.62