Math, asked by khryzamaegabucan, 4 months ago

Suppose that you have ₱80,000. You decided to deposit it in a bank and will not withdraw from it for 10 years. A bank offers two types of compound interest accounts. The first account offers 6% interest compounded monthly. The second account offers 6.5% interest compounded semi-annually. Which account will you choose if you want your money to earn more? EXPLAIN IN 2 SENTENCES. PROVIDE A SOLUTION.

Answers

Answered by amitnrw
1

Given : Suppose that you have ₱80,000. You decided to deposit it in a bank and will not withdraw from it for 10 years

A bank offers two types of compound interest accounts. The first account offers 6% interest compounded monthly. The second account offers 6.5% interest compounded semi-annually.

To Find : Which account will you choose if you want your money to earn more

Solution:

Principal = 80,000

Time n = 10 Years

6% interest compounded monthly.

R = 6/12 = 1/2 % per month

n = 10 x 12 = 120  

A = P(1 + R/100)ⁿ

=> A = 80000  ( 1 + 1/200)¹²⁰

=> A = 80000( 1.8194)

=> A = 1,45,552

6.5% interest compounded semi-annually.

R = 6.5/2 = 3.25 % semi-annually

n = 10 x 2 = 20  

A = P(1 + R/100)ⁿ

=> A = 80000  ( 1 + 3.25/100)²⁰

=> A = 80000( 1.8958)

=> A = 1,51,664

1,51,664 > 1,45,552

Hence 6.5% interest compounded semi-annually is better option.

Learn More:

calculate the compound interest for the second year on rupees 8000 ...

https://brainly.in/question/17821541

For a sum compound interest of fifth year is rs. 22743 and compound ...

https://brainly.in/question/10026317

Find the amount and the compound interest rs 300 at 3% per annum ...

https://brainly.in/question/13193855

Similar questions