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MOI-Ass1

# MOI-Ass1

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Mathematics of Investment Assignment.> interest, ordinary interest, exact interest, actual and approx time, and the 4 methods of interest between dates. Examples are also given...
Mathematics of Investment Assignment.> interest, ordinary interest, exact interest, actual and approx time, and the 4 methods of interest between dates. Examples are also given...

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10/23/2012

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Ma. Elissa A. Pagulayan Dr. BuencaminoLomboyOFA31 Professor
ASSIGNMENT IN MATHEMATHICS OF INVESTMENT
1)
What are
Interest Rate
,
Debtor
and
Time
? Give Examples.
INTEREST RATE – the functional part of the principal that is paidon the loan and investment, which is usually expressed aspercent. This is denoted by .Interest- the payment for the user of borrowed money or theamount earned on invested money denoted by .
Example 1Find the interest paid by Ms. Rose on
P
15,000 thatshe borrowed for three years at 6٪ simple interest.
Solution
Given:Required:Formula:Computation:
Example 2: Determine the simples interest paid by Ana if sheborrowed P1,600 at 6 ¼ for 4 months?
Solution
Given:Required:Formula:Computation:
1

2)
Differentiate
Ordinary Interest
from
Exact Interest
. Give Examples.
ORDINARY INTEREST- denoted by , is computed using theapproximate number of days in a year, which is 360 days.
EXACT INTEREST- denoted by , is computed using the exactnumber of days in a year, which is 365 days.
Example 1Maris plans to deposit an amount of P60,000 for 385days at 4 ¼ ٪simple interest. How much would the interest be if she opts to deposit it at a.) ordinary simple interest ? b.)exact simple interest ?
Solution
Given:Required:Formulas:Computations:
3)
Differentiate
Actual from Approximate Time
. Give Examples.
ACTUAL TIME- refers to the true or existing number of days in agiven month.
APPROXIMATE TIME- is simply assuming that each month has 30days.
2

Example 1Find the actual and approximate time from January23, 2003 to October 5, 2003
Solution
ActualTimeMonthAppproximateTime
828313031303131305 January (23)FebruaryMarchAprilMay June JulyAugustSeptemberOctober (5)730303030303030305
255Total No. oDays252
4)
What are the
4 methods of interest between dates
? Give examples of each.
FOUR METHODS USED TO DETERMINE THE INTEREST BETWEENDATESOrdinary Interest using actual time (Banker’s Rule)Ordinary Interest using approximate timeExact Interest using actual timeExact Interest using approximate time
3