COMPOUND INTEREST
1. In a certain account providing an interest rate of r compound quarterly, ₱2,500 is deposited every end of the quarter. What value of r will make the future value of the account ₱5,200 in six months?
FORMULA: r = [tex](\frac{F}{P} {)}^{ \frac{1}{t} } - 1[/tex]
where:
F = is the compound amount
P = is the original amount
t = is the time
r = is the rate
SOLUTION:
[tex]r = (\frac{F}{P}{)}^{ \frac{1}{t} } - 1 \\ \\ r = (\frac{5200}{2500} {)}^{ \frac{1}{0.5} } - 1 \\ \\ r = 4.3264 - 1 \\ \: \: \: \: \: \: \: \: \: r = 3.3264 \: \: \tt{or} \: \: \underline\bold{332.64\%}[/tex]
ANSWER:
The value of r (rate) is 332.64%
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