Question

As a young professional in the future, it is good to start saving money to have a

security for the future and have something to use when emergency cases happen
related to the need of cash. The Philippine Average Family income last 2015 was
around P276,000 per year. Lets say every year you earn the same amount and save
P76,000 yearly in your frusted bank giving 4% compounded interest annually. How much
will the account worth in the future after 40 years?
a. Solve for the future value of the account:
FV=PMT

`( ((1 + i) ^(n) - 1 )/(i) )`
​

Answer 1

P7,221,939.19

Explanation:

Future Value of the4 account

`F.V.=PMT \cdot \left[((1+i)^n-1)/(i) \right]`

Yearly Payment, PMT = P76,000

Annual Interest, i=4%=0.04.

n=40 years

Therefore:

`F.V.=76000 \cdot \left[((1+0.04)^(40)-1)/(0.04) \right]\\=P$ 7,221,939.19`

The account will be worth P7,221,939.19 after 40 years.