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    MATHEMATICS-OF-INVESTMENT (1)

    Uploaded by

    Vaness Joyce Dapat

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    MATHEMATICS-OF-INVESTMENT (1)

    Uploaded by

    Vaness Joyce Dapat
    0 views15 pages

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    © © All Rights Reserved

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    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    0 views15 pages

    MATHEMATICS-OF-INVESTMENT (1)

    Uploaded by

    Vaness Joyce Dapat

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 15

    MATHEMATICS

    OF INVESTMENT
    SIMPLE INTEREST
    I = Prt
    I = interest (amount paid or earned for the use of money)
    P = principal (amount of money borrowed or invested)
    r = rate (always in decimal)
    t = time (always in years)
    MATURITY VALUE

    F=P+I
    F = maturity value
    P = principal
    I = computer interest
    EXAMPLE

    1. A man put his P500,000.00 in


    an investment earning an 8%
    interest. Determine the man’s
    interest earned and his total
    money at the end of 15 months.
    EXAMPLE

    2. A man borrowed
    P120,000.00 from a lending
    institution, and promise to return
    P140,000.00 after 10 months,
    What was the interest rate
    charged?
    EXAMPLE

    3. Determine the time when


    P50,000.00 is invested at 15%
    simple interest and will
    accumulates an interest of
    P16,875.00
    EXAMPLE

    4. What Principal will


    yield P8,775.00 in 9
    months at 18% interest?
    COMPOUND INTEREST
    INTEREST COMPOUNDED # OF COMPOUNDING
    PERIODS IN 1 YEAR

    1. Annually or once a year 1


    2. Semi-annually or every 6 months 2
    3. Quarterly or every 3 months 4
    4. Monthly or once a month 12
    5. Daily or once a day 365/366 (leap year)
    EXAMPLE

    1. At what rate compounded


    quarterly will P9,000
    accumulate to P12,500 in 5
    years?
    EXAMPLE

    2. How long will it take for


    P15,000 to accumulate to
    P17,500 at 2 ½% compounded
    monthly?
    EXAMPLE

    3. Find the compound amount


    and compound interest on
    P10,000.00 for 5 years at 6%
    compounded annually.
    EXAMPLE
    4. How much must be invested
    today in a savings account in
    order to have P50,800.00 in 6
    years and 9 months if money
    earns 8 ½ % compounded
    quarterly?

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