Question

How much interest is earned when an amount of 100,000 pesos is invested with annual interest of 8% for 5 years and how will the investor received after 5 years?

Answer 1

The interest earned is 40,000 pesos and the investor will receive 140,000 pesos after 5 years.

Step-by-step explanation:

To calculate the amount of interest earned, we can use the formula:

Interest = Principal x Rate x Time

Given that the principal amount is 100,000 pesos, the annual interest rate is 8%, and the investment period is 5 years, we can substitute these values into the formula:

Interest = 100,000 x 0.08 x 5 = 40,000 pesos

Therefore, the interest earned on the investment is 40,000 pesos.

To find the total amount the investor will receive after 5 years, we add the interest earned to the principal:

Total amount = Principal + Interest = 100,000 + 40,000 = 140,000 pesos

So, the investor will receive 140,000 pesos after 5 years.