If you’re a dreamer like me, perhaps it also crossed your mind to dream big like earning 1,000,000 pesos using the Pag-IBIG MP2 Savings program.
The best way to earn this would be a one-time deposit in January and let the money sit for 5 years until maturity. But the big question is, how much initial capital do we need to earn that six figures after 5 years?
Using Mathematics, we can actually solve that problem.
For the last 5 years (2016-2020), the average dividend rate given for Pag-IBIG MP2 is 7.29%. We will use this average dividend rate to solve for the initial investment amount needed to earn 1M.
Using the compound interest formula, we can derive the formula to find how much do we need from the start.
From this calculation, we need to invest an initial amount of around Php 2.3M to become a millionaire after 5 years. That is around 43.48% of our initial investment.
Now the next step is to find a friend who can lend us 2.3M without interest so we can be millionaires after 5 years.
Pautang po ng 2.3M ibabalik lang after 5 years. 🙂
If you have no idea what this MP2 program, this article will be your guide.