Math Problem Statement

Find the compound interest from investing Rp 5,000,000 with an interest rate of 8% compounded quarterly over 10 years.

Solution

The question asks to find the compound interest from investing Rp 5,000,000 at an interest rate of 8%, compounded quarterly over 10 years.

To calculate the compound interest, we use the compound interest formula:

A=P(1+rn)ntA = P \left(1 + \frac{r}{n}\right)^{nt}

Where:

  • AA is the final amount (principal + interest),
  • PP is the principal amount (Rp 5,000,000),
  • rr is the annual interest rate (8% or 0.08),
  • nn is the number of times the interest is compounded per year (quarterly means 4 times a year),
  • tt is the number of years (10 years).

Let's calculate the compound interest!The final amount after 10 years of investing Rp 5,000,000 at 8% interest compounded quarterly is approximately Rp 11,040,198.32. The compound interest earned over this period is approximately Rp 6,040,198.32.

Would you like more details or have any questions?

Here are 5 related questions:

  1. How does the frequency of compounding affect the total interest earned?
  2. What would happen if the interest rate were 10% instead of 8%?
  3. How can we calculate the interest if it's compounded monthly instead of quarterly?
  4. What is the formula for continuously compounded interest?
  5. What is the difference between simple interest and compound interest?

Tip: Increasing the frequency of compounding (e.g., quarterly, monthly) leads to a higher accumulated interest over time.

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Math Problem Analysis

Mathematical Concepts

Compound Interest
Interest Rate
Time

Formulas

A = P(1 + r/n)^(nt)

Theorems

Compound Interest Theorem

Suitable Grade Level

High School (Grades 10-12)