Topic: Compound Interest

Suppose you wanted to save money for a down payment in your dream house and your target is to save P2 million so that you will be not be burdened by a large monthly mortgage after you purchased your dream house . Because you are a risk- averse investor, you are not considering investing in stocks and just choose one from the two scenarios below. Scenario 1: You decided to make a monthly deposits at the end of every month of P6,000.00 into a savings account that earns 3.5% per month. F"'""- L- I Scenario 2: You gure out that your monthly salary will at least increase by P501300 after your yearly performance evaluation at work. So you decided to start off by making monthly deposits of PjOPEat the eind of every month) into the savings account that earns 3. 5% interest .Yearly, you will increase the monthly deposit by P500.00 until you reach the P2 million targeted amount. Assuming that no withdrawals were made, make a computation for the two scenarios and explain to the class which scenarios will give you the best investment