Question

1. Angelo wants to renovate his house in 3 years. He estimates the cost to be ₱300,000. How much must Angelo invest now at 8% interest compounded quarterly, in order to have ₱300,000, 3 years from now?

Answer 1

Answer:

Angelo must invest ₱236.55

Step-by-step explanation:

Let x be the amount Angelo must invest, then we have time, t = 3 years, rate, r = 8%, number of times compounded annually, n = 4

Using the formula:

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

we have:

`\begin{gathered} 300=x(1+(0.08)/(4))^(4*3) \\ \\ 300=x(1.02)^(12) \\ \\ x=(300)/(1.02^(12))=236.55 \end{gathered}`