Situation: Mrs. Tuando received Php 1,500,000 from the government when she retired from service. She decided to deposit Php 1,000,000 in the bank. Which would make her money grow faster- simple or compound interest?
Answer:
-Differentiate simple interest from compound interest.
-Convince Mrs. Tuando of the better choice by showing the computations of the
interest earned in 5 and 10 years if one million were deposited at a simple interest
rate of 3% versus an interest rate of 3% compounded annually.
-How are integral components used in computing compound interest?