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Compound Interest Example Problems

This document contains 10 multi-part math word problems involving compound interest calculations with varying interest rates, time periods, and compounding frequencies. It also includes one additional problem calculating simple and discount rates for a loan. The problems require calculating ending balances, determining investment amounts needed to reach a future sum, finding time periods for balances to equalize, and graphing account balances over time.

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Micah Aila Mallari
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100 views2 pages

Compound Interest Example Problems

This document contains 10 multi-part math word problems involving compound interest calculations with varying interest rates, time periods, and compounding frequencies. It also includes one additional problem calculating simple and discount rates for a loan. The problems require calculating ending balances, determining investment amounts needed to reach a future sum, finding time periods for balances to equalize, and graphing account balances over time.

Uploaded by

Micah Aila Mallari
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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1.

A principal of P2000 is places in a savings account 3% per annum


compounded annually. How much is in the account after one year, two
and three years?

2. A man wishes his son to receive P200,000 ten years from now. What
amount should he invest if it will earn interest of 10% compounded
annually during the first 5 years and 12% compounded quarterly during
the next 5 years?

3. How many years will P100,000 earn a compounded interest of P50,000 if


the interest is 9% compounded quarterly

4. By condition of a will, the sum of P25,000 is left to be held in trust by


her guardian until it amounts to P45,000. When the girl receives the
money if the fund is invested at 8% compounded quarterly?

5. Find the amount at the end of two years and seven months if P1000 is
invested at 8% compounded quarterly using simple interest for anytime
less than a year interest period.

6. $100 is the principal deposited in a 5% saving account not compounded


(simple interest). The same amount of $100 is placed in a 5% saving
account compounded annually. Find the total amount A after t years in
each saving plan and graph both of them in the same system of
rectangular axes. Use the graphs to approximate the time it takes each
saving plan to double the initial amount.
7. $1200 is placed in an account at 4% compounded annually for 2 years.
It is then withdrawn at the end of the two years and placed in another
bank at the rate of 5% compounded annually for 4 years. What is the
balance in the second account after the 4 years.
8. A principal of $120 is deposited in a 7% account and compounded
continuously. At the same time a principal of $150 is deposited in a 5%
account and compounded annually. How long does it take for the
amounts in the two accounts to be equal?
9. A person deposited $1,000 in a 2% account compounded continuously.
In a second account, he deposited $500 in a 8% account compounded
continuously. When will the total amounts in both accounts be equal?
When will the total amount in the second accounts be 50% more than
the total amount in the second account?
10. An amount of $1,500 is invested for 5 years at the rates of 2% for
the first two years, 5% for the third year and 6% for the fourth and fifth
years all compounded continuously. What is the total amount at the end
of the 5 years?

Discount
1. Mr. T borrowed money from the bank. He receives from the bank
P1,340.00 and promised to pay P1,500.00 at the end of 9 months.
Compute (a) Simple interest rate; and (b) discount rate.

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