Question

A bank pays an annual interest rate of 3% compounded quarterly. If the initial deposit (or principal) is Php 50 000, find the balance after 5 years.
Use: A=p( 1 + r/n)^nt

[Simplifies expressions with rational exponents]​

Answer 1

Given : A bank pays an annual interest rate of 3% compounded quarterly.

the initial deposit (or principal) is Php 50 000

Use: A=p( 1 + r/n)^nt

To  find  : the balance after 5 years.

Solution:

A=p( 1 + r/n)^nt

p = 50000

r = 3 % = 0.03

n = 4   as there are 4 quarter in a year

t  = 5  

A = 50000 (1  + 0.03/4)⁴ˣ⁵

=> A = 50000 (1  + 3/400)²⁰

=> A  = 50000 (403/400)²⁰

=> A = 50000 * 403²⁰/400²⁰

=> A = 50000 * 403²⁰/400²⁰

=> A  =  58,059.2

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