Final answer:
To find the future value of Php 10,000 invested at an 8% annual interest rate compounded annually for two years, you use the compound interest formula resulting in Php 11,664 after two years.
Step-by-step explanation:
The question is about calculating the future value of an investment with compound interest. Given an initial investment of Php 10,000 at an annual interest rate of 8% compounded annually, to find the amount after two years, we can use the formula:
A = P(1 + r/n)nt
Where:
- A represents the amount of money accumulated after n years, including interest.
- P is the principal amount (the initial amount of money).
- r is the annual interest rate (decimal).
- n is the number of times that interest is compounded per year.
- t is the time the money is invested for, in years.
Substituting the given values into the formula, we get:
A = 10,000(1 + 0.08/1)1*2 = 10,000(1 + 0.08)2 = 10,000(1.08)2 = 10,000 * 1.1664 = Php 11,664
Choice a. Php 11,664 is the correct answer.