The question asks about Mr. Cruz, who borrows 500,000 PHP at an interest rate of 5% for 2 years. We are to find out the future value of the loan after 2 years.

This is a simple interest problem, which can be solved using the formula:

$A = P(1 + rt)$

Where:

• $A$ is the future amount (the total loan to be paid),
• $P$ is the principal amount (500,000 PHP),
• $r$ is the interest rate (5% or 0.05),
• $t$ is the time (2 years).

Now, applying the values to the formula:

$A = 500,000(1 + (0.05 \times 2))$ $A = 500,000(1 + 0.10)$ $A = 500,000 \times 1.10$ $A = 550,000 \, \text{PHP}$

Thus, Mr. Cruz will pay 550,000 PHP after 2 years.

Do you want further details or have any questions?

Here are 5 related questions for further exploration:

1. How would the amount change if the loan duration were extended to 5 years?
2. What happens if the interest rate increases to 7%?
3. What would be the interest alone that Mr. Cruz has to pay after 2 years?
4. How would the future value change with compound interest instead of simple interest?
5. If Mr. Cruz repays half the loan after 1 year, what would the total payment be?

Tip: In simple interest loans, interest is calculated only on the original principal, not on any accumulated interest.