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Answer :
Final answer:
Using the compound interest formula, the future value of a P45,000 investment at a 6% annual interest rate after 2 years is calculated as P50,562, hence none of the above is correct.
Explanation:
To calculate the future value of an investment, we use the formula for compound interest, which is A = P(1 + r/n)^(nt). For a P45,000 investment at a 6% interest rate compounded annually over 2 years, the calculation would be as follows:
- Identify the principal amount (P): P45,000.
- Identify the annual interest rate (r): 0.06 (6%).
- Since the interest is compounded annually, n (the number of times the interest is compounded per year) equals 1.
- Identify the number of years (t): 2 years.
- Plug the values into the formula: A = 45000(1 + 0.06/1)¹ˣ².
- Calculate the compound interest: A = 45000(1.06)²
- Compute the future value: A = 45000 * 1.1236 = P50,562
Therefore, the future value of the investment after 2 years would be P50,562.
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