Question

Ronna was listening to her parents talking about what a good deal compounded interest was for a retirement account. she wondered how much money she would have if she invested php 2000 at age 20 at 2.8% annual interest compounded quarterly (four times each year) and left it until she reached age 65. determine what the value of the php 2000 would become. A. PHP 6,414.33

B. PHP 8,527.22
C. PHP 10,238.76
D. PHP 12,116.82

Answer 1

The value of the Php 2000 investment compounded quarterly at an annual interest rate of 2.8% from age 20 to 65 is approximately Php 6,414.33.

Step-by-step explanation:

To calculate the value of the Php 2000 investment compounded quarterly at an annual interest rate of 2.8% from age 20 to 65, we can use the formula for compound interest:

A = P(1 + r/n)^(nt)

Where:

• A = the future value of the investment
• P = the principal (initial investment amount)
• r = the annual interest rate (expressed as a decimal)
• n = the number of times interest is compounded per year
• t = the number of years the money is invested for

Substituting the given values into the formula:

A = 2000(1 + 0.028/4)^(4*45)

Simplifying the equation gives:

A ≈ 6414.33

Therefore, the value of the Php 2000 investment at age 65 would be approximately Php 6,414.33.