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- CDO BANK
- Hmm...I want to make an investment where I could earn big in the future. Perhaps this bank could help me. I'll try.
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- I've been thinking of investing my money, that's why I would like to know what is your interest rate and to hear what are the best methods where I can earn big from it in the future.
- How much would I earn after 5 years if I invest ₱350,000 today?
- Our interest rate is 7%, and regarding the methods, you can earn differently if you choose for it to be simple or compounded.
- Welcome to CDO Bank, how may I help you today, Sir Montefalcon?
- In simple interest, it is calculated only just on the principle amount of a loan or deposit in the given period. Where in compound interest is you add the money you've earned back into your principle balance, which earns you even more interest, compounding your earnings throughout the period.
- So if we are to use simple interest, we are to multiply your principal amount to our interest rate and to your given period (I=Prt), which is:I = (₱350,000)(7%)(5 years)Your final amount would be ₱122,500
- On the other hand, in compound interest(A=P(1+r/m)˄mt), for example you would like to compound it, let say annually (per year),A= ₱350,000(1+ 7% / 1)˄(1)(5)it will give you an earning of an estimated amount of ₱490,893.11 in a span of 5 years.
- Wow, that is big enough!
- Wow, I guess there have been a huge amount differences, so I 've decided to invest my money here, and for it to be compounded annually for 5 years.
- Great! We're going to process your account right away. Thank You for trusting CDO Bank. Have a great day ahead!
- CDO BANK
- Hmm.. Investing now will benefit myself in the future. I can't wait to see myself grow more.
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- THE END.
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