Question

How much should you set aside and invest in a fund earning 10% compounded quarterly if you want to accumulate P200,000 in 3 years and 6 months?

Answer 1

Here A=200000

t=3.5 year

Rate r=10%

By using the formula of compound interest we have

`\begin{gathered} A=P\lbrack1+((r)/(4))/(100)\rbrack^(4t) \\ 200000=P\lbrack1+((10)/(4))/(100)\rbrack^(4*3.5) \\ 200000=P\lbrack1.025\rbrack^(14) \\ P=(200000)/(1.41297382) \\ P=141545.4392 \end{gathered}`