Alec placed a time deposit in a bank for 70,000 pesos with an interest rate of 6% compounded twice a year. How much will the principal and interest be after 7 years?
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ANSWER:
The principal and interest, with compound interest on a principal of 70,000 pesos at a 6% per year, compounded twice over 7 years is 105,881.28 Pesos
STEP-BY-STEP EXPLNATION
1st Step: Use the equation and write down all the numbers given.
The formula for compound interest is
P = 70,000 pesos
r = 6%
n = 2
t = 7 years
2nd Step: Substitute the given values to the formula.
A = 105,881.28 Pesos