Question

Find the accumulated amount of P1300 invested at a 6.25% monthly compound interest rate for a period of 3 years. What is the formula or process used for this calculation, and what does this calculation represent in financial terms?

Answer 1

To find the accumulated amount of P1300 invested at a 6.25% monthly compound interest rate for 3 years, we can use the formula for compound interest. The accumulated amount after 3 years is P2396.32.

Step-by-step explanation:

To find the accumulated amount of P1300 invested at a 6.25% monthly compound interest rate for 3 years, we can use the formula for compound interest. The formula is:

Future Value = Principal × (1 + interest rate)time

Substituting the given values, the calculation is: Future Value = 1300 × (1 + 0.0625)36 = P2396.32. Therefore, the accumulated amount after 3 years is P2396.32.

This calculation represents the final amount of money that the initial investment of P1300 will grow to after 3 years, considering the monthly compounding interest rate of 6.25%.