https://file.aiquickdraw.com/mathbot/file/17281772246997s1v5v63.jpg

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!

Find the maturity value if ₱1,000,000 is deposited in a bank at an annual simple interest rate of 0.25% after (a) 1 year and (b) 5 years?

Learn how to calculate the maturity value of ₱1,000,000 deposited at a 0.25% simple interest rate for 1 and 5 years. This example demonstrates how to use the simple interest formula A = P(1 + rt) to find the future value.

Math Problem Statement

Solution

Ask a new question for Free

By Image

Math Problem Analysis

Mathematical Concepts

Formulas

Theorems

Suitable Grade Level

Related Recommendation