Question

Anao Savings and Loan is paying 6% interest compounded quarterly. Find the future value of ₱1,000, deposited at the beginning of every 3 months, for 5 years.

Answer 1

$1346.86

1) Having these data, we can write out the following:

6% interest compounded quarterly

Present Value: 1,000

5 years

2) Let's plug into the formula below:

`\begin{gathered} F=P(1+(r)/(n))nt \\ F=1000(1+(0.06)/(4))^(4\cdot5) \\ F=1346.8555\approx1346.86 \end{gathered}`

Notice the rate is given in the decimal form. N stands for the number of periods that it is compounded.

3) Hence, the future value is: $1346.86 approximately