To find the maturity value (future value) when ₱1,000,000 is deposited at a simple interest rate of 0.25%, we can use the formula for simple interest:

$A = P(1 + rt)$

Where:

• $A$ is the maturity value (future value).
• $P$ is the principal amount (₱1,000,000).
• $r$ is the annual interest rate (0.25% or 0.0025 as a decimal).
• $t$ is the time in years.

(a) After 1 year:

Given:

• $P = 1,000,000$
• $r = 0.0025$
• $t = 1$ year

Substitute these values into the formula:

$A = 1,000,000(1 + 0.0025 \times 1) = 1,000,000(1 + 0.0025) = 1,000,000 \times 1.0025$

$A = 1,002,500$

So, the maturity value after 1 year is ₱1,002,500.

(b) After 5 years:

Given:

• $P = 1,000,000$
• $r = 0.0025$
• $t = 5$ years

Substitute these values into the formula:

$A = 1,000,000(1 + 0.0025 \times 5) = 1,000,000(1 + 0.0125) = 1,000,000 \times 1.0125$

$A = 1,012,500$

So, the maturity value after 5 years is ₱1,012,500.

Would you like more details on this or any further questions?

Here are 5 related questions:

1. How does compound interest differ from simple interest?
2. What is the effect of a higher interest rate on the maturity value?
3. How can you calculate interest earned separately from the maturity value?
4. How does the maturity value change if the principal amount is increased?
5. What happens if the interest rate is compounded instead of being simple?

Tip: Always check whether interest is compounded or simple, as it significantly affects the future value!