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Popular Word Problems >

A debt of P100,000 with interest at 11.5% compounded quarterly is due at the end of 6 years. What is the maturity value of the P100,000 obligation?

Solution

A d e b t o f P 100, 000 w i t h in t eres t a t 11.5% co m p o u n d e d q u a r t er l y i s d u e a t t h e e n d o f 6 ye a rs . Wha t i s t h e ma t u r i t y v a l u e o f t h e P 100, 000 o b l i g a t i o n ?

Solution

Amount : 197440.55

Solution steps

Translate the problem into an equation:

A = 100000 (1 + \frac{0.115}{4})^{4 \cdot 6}

100000 (1 + \frac{0.115}{4})^{4 \cdot 6} = 197440.55233 \dots

Round to the nearest hundredth:

197440.55

Amount : 197440.55

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