BMAT2-X

Problem Set 2

Directions: Solve each of the following problems. Write your solutions neatly, and when applicable,
box your final answer.

1. A simple interest note for Php85,000 was signed on September 3, 2008. It was due on May 3
of the next year. Find the rate charged if the maturity value was Php87,250.

2. Jude has a Php3,500 note, at 12% simple interest, good for 150 days. It was drawn by Indeo
Corp. on March 16, 2009. If interest charged in advance is 14%, how much will he receive if
the note is encashed at a bank on June 29, 2009?

3. What is the proceeds for a Php720,000 bank discount note deducted 12.4% interest in
advance from January 27 to August 27, 2009?

4. Elmer owes Kenneth Php3,000 due now. In payment, Elmer draws a 75-day note to the order
of Kenneth with a face value not bearing interest. Kenneth intends to sell the note
immediately to a bank whose discount rate is 8%. What should be the value of the note in
order that Kenneth will obtain Php3,000 from its sale to the bank?

5. Consider a non-interest bearing note for Php15,000 dated November 12, 2009 and due in 3
months. If it is discounted on December 12, 2009 at a discount interest rate of 10.5%, find
the proceeds.

R. Nocon