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Exercises 8.

1
Exercise 8.1, Solution 1:
a. 0January 01, 2017: 1st day of the year (using the table)
February 19, 2017: 50th day of the year (using the table)
Difference = 50 − 1 = 49 days
49
Therefore, the number of days in the given time period = 49 days. In terms of years, t = = 0.13 years
365
b. February 26, 2018: 57th day of the year (using the table)
December 02, 2018: 336th day of the year (using the table)
Difference = 336 − 57 = 279 days
279
Therefore, the number of days in the given time period = 279 days. In terms of years, t = = 0.76 years
365
c. November 23, 2016: 327th day of the year (using the table)
December 31, 2016: 365th day of the year (end of the year)
In 2016 we have 365 − 327 = 38 days
April 04, 2017: 94th day of the year (using the table)
In 2017 we have 94 days
132
Therefore, the number of days in the given time period = 38 + 94 = 132 days. In terms of years, t = =
365
0.36 years
d. August 25, 2015: 237th day of the year (using the table)
December 31, 2015:365th day of the year (end of the year)
In 2015 we have 365 − 237 = 128 days
September 06, 2016: 249th day of the year (using the table)
But 2016 is a leap year, therefore September 06, 2016 will be 249 + 1 = 250th day of the year since
February 29 will be day 60.
In 2016 we have 250 days.

378
Therefore, the number of days in the given time period = 128 + 250 = 378 days. In terms of years, t =
365
=1.04 years
Exercise 8.1, Solution 3:

200
a. I = Prt = (200) (0.10) ( ) = $10.958904... = $10.96
365
Therefore, amount of interest earned on the given investment = $10.96.
b. From the days table,

Last updated: June 11, 2017


April 15: 105th day
November 1: 305th day
Difference = 305 − 105 = 200 days

t = 200 days = 200 years


365

I = Prt = (2200) (0.04) ( 200 ) = $48.219178... = $48.22


365
Therefore, amount of interest earned on the given investment = $48.22
c. From the days table,
January 24: 24th day of the year
December 31: 365 th day of the year
Difference = 365 − 24 = 341 days
In 2017 we have 341 days
February 15: 46th day of the year
In 2018 we have 46 days
Total days in the given time period = 341 + 46 = 387 days
387
t= × 12 months
365
387
I = Prt = (5605) (0.012) ( × 12) = $855.768328... = $855.77
365
Therefore, amount of interest earned in the given period = $855.77.
3 3
d. t = 1 year and 9 months 1 years = 1 years × 12 months = 21 months
4 4
I = Prt = (150) (0.008) (21) = $25.20
Therefore, the amount of interest earned in the given period = $25.20
Exercise 8.1, Solution 5:
From the days table,
January18: 18th day of the year
April 24: 114th day of the year
Difference = 114 - 18 = 96 days
Match the unit of ‘t’ to that of ‘r’
96
P= $12,500, r=0.0325% p.a. t=
365
Using the formula I = Pr t , we get:
96
I = (12,500)(0.0325)( )
365
= 106.849315...

Last updated: June 11, 2017


Therefore, the amount of interest charged in this period was $106.85.
Exercise 8.1, Solution 7:
From the days table,
November 18: 322th day of the year
December 31: 365th day of the year
Difference = 365 - 322 = 43 days
Therefore, in 2014 we have 43 days
February 23: 54th day of the year
Therefore, in 2015 we have 54 days
Total days in the given time period = 43 + 54 = 97
Match the unit of ‘t’ to that of ‘r’
97
P = $5000, r = 2.2% p.a. = 0.022 p.a., t = 97 days = years
365
Using the formula I = Pr t , we get:
97
I = (5000)(0.022)( )
365
= 29.2328...
Therefore, the amount of interest earned for this period was $29.23.
Exercise 8.1, Solution 9:
3 1 5
t = 1 year and 3 months = 1 + =1+ = years
12 4 4
5
I = Prt = (5000) (0.05) ( ) = $312.50
4
Therefore, he will receive an interest of $312.50 at the end of the time period.
Exercise 8.1, Solution 11:
11
t = 11 months = years, r = 5.5% = 0.055
12
11
I = Prt = (750) (0.055) ( ) = $37.8125 = $37.81
12
Therefore, Nathan would have to pay an interest of $37.81.
Exercise 8.1, Solution 13:
From the days-table
Jan 02: 2nd day in the year
December 31: 365 th day of the year
Difference = 365 − 2 = 363 days
Therefore, in 2015 we have 363 days

Last updated: June 11, 2017


Mar 15 = 74th day in the year
But 2016 is a leap year, therefore Mar 15, 2016 will be 74 + 1 = 75th day of the year since February 29 will
be day 60.
Therefore, in 2016 we have 75 days.
Total days in the given time period = 363 + 75 = 438 days
438
t in years = years
365
438
I = Prt = 8000 × 0.04 × = $384
365
Therefore, she would earn an interest of $384 by March 15, 2016.
Exercise 8.1, Solution 15:
20
t = 20 days = years
365
20
I = Prt = (2500) (0.125) ( ) = $17, 123288... = $17.12
365
Therefore, Benjamin would have to pay an interest of $17.12 to the lender.
Exercise 8.1, Solution 17:
æ 45 ö 540
r = 0.06, t = 45 days = ç ´12 ÷ months = months
è 365 ø 365

540
I = Prt = (5000) (0.015) ( ) = $110.958904... = $110.96
365
Therefore, Aidan would have to pay an interest of $110.96 at the end of the time period.
Exercise 8.1, Solution 19:
0.098
First rate: r = 9.8% per annum = 0.098 = = 0.008166… per month = 0.82% per month
12
Second rate: r = 0.85% per month
Therefore, the second rate is more attractive for a lender of a loan because it is higher and hence results in a
higher interest for a given amount of loan.
Exercise 8.1, Solution 21:
Rate of interest charged by the Angelo to Alisa r = 6% p.a = 0.06
18
t = 18 months = = 1.5 years
12
I = Prt = (2500) (0.06) (1.5) = $225.00
At the end of 18 months, Alisa should pay Angelo $225.00 in interest.
Rate of interest charged by the bank to Angelo = 4.6% per annum = 0.046
Interest charged by the bank = (2500) (0.046) (1.5) = $172.50

Last updated: June 11, 2017


Therefore, Angelo should pay an interest of $172.50 to the bank at the end of 18 months.

Exercise 8.1, Solution 23:


For Aba,

210
t = 210 days = ´12 months
365
r = 0.4% per month = 0.004
210
Therefore, we have interest earned I = Prt = (5200) (0.004) ( ×12 ) = $143.605479... = $143.61
365
For Tabita,
r = 4.3% per annum = 0.043
210
t = 210 days = years
365
210
Therefore, we have interest earned I = Prt = (5200) (0.043) ( ) = $128.646575... = $128.65
365
143.61 – 128.65 = $14.96
Therefore, Aba earned $14.96 more interest.
Exercise 8.1, Solution 25:
8 2
t = 8 months = = years
12 3
2
First interest I = Prt = (3500) (0.046) ( ) = $107.333333... = $107.33
3
Second interest I = Prt = (7500 − 3500) (0.004) (8) = $128.00
Therefore, total interest earned from both investments = 107.33 + 128.00 = $235.33
Exercise 8.1, Solution 27:
æ 180 ö 180
t = 180 days = ç ´12 ÷ months = years
è 365 ø 365

180
Interest at 11% per annum rate: I = Prt = (2600) (0.11) ( ) = $141.041096...
365
æ 180 ö
Interest at 1.2% per month rate: I = Prt = (2600) (0.012) ç ´12 ÷ = $184.635616...
è 365 ø
184.635616… – 141.041096… = $43.594520… = $43.59
Therefore, if the rate was 1.2% per month, $43.59 more interest would have to be paid.
Exercise 8.1, Solution 29:
P=$5,000 ; t = 0.5
Assuming the simple interest rate is 1% p.a., r = 0.01

Last updated: June 11, 2017


Interest at 1% p.a: I = Prt = (5,000) (0. 5) (0.01) = $25
When it is 2% higher, the interest will be:
Interest at 3% p.a: I = Prt = (5,000) (0. 5) (0.03) = $75
$75 - $25= $50
Therefore, he would have earned an additional $50 interest if the interest rate was 2% higher.

Last updated: June 11, 2017