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Bahan Ajar Matematika Bisnis
Bahan Ajar Matematika Bisnis
Find the principal, rate or time using the simple interest formula.
Key Terms
Simple interest: interest earned when a loan or investment is repaid in a lump sum.
Rate: the percent of the principal paid as interest per time period.
Time: the number of days, months or years that the money is borrowed or invested.
P=RxB
The interest is a percentage.
Principal is the amount borrowed or invested.
Rate of interest is a percent for a given time period, usually one year.
Time must be expressed in the same unit of time as the rate. (i.e. one year)
Find the interest paid on a loan
Principal = (P) $1,200
Interest rate = 8% (or 0.08)
Time = 1 year
Interest = P x R x T
Interest = 1,200 x 0.08 x 1
Interest = $96
The interest on the loan is $96.
Try these examples
Find the interest on a 2-year loan of $4,000 at a 6% rate.
$480
Find the interest earned on a 3-year investment of $5,000 at 4.5% interest.
$675
Marcus Logan can purchase furniture on a 2-year simple interest loan at 9% interest per year.
What is the maturity value for a $2,500 loan?
MV = $2,500 ( 1 + 0.09 x 2)
MV = $2,500 ( 1 + 0.09 x 2)
MV = $2,500 (1 + 0.18)
MV = $2,500 (1.18)
MV = $2,950
$4,900
Jim Sherman will invest $3,000 at 8% for 5 years. What is the maturity value of the
investment?
$4,200
P = I / RT
Judy paid $108 in interest on a loan that she had for 6 months. The interest rate was 12%. How
much was the principal?
P = $1,800
R = I / PT
Sam wants to borrow $1,500 for 15 months and will have to pay $225 in interest. What is the
rate he is being charged?
R = .12 or 12%
T = I / RP
Shelby borrowed $10,000 at 8% and paid $1,600 in interest. What was the length of the loan?
T = $1,600/0.08 x $10,000
T=2
Exact time: time that is based on counting the exact number of days in a time period.
Examples
To find the exact time from July 12 to September 12, add the following:
Days in August 31
Days in September 12 +
62 days
Find the exact time of a loan using the sequential numbers table.
If the beginning and due dates of the loan fall within the same year, subtract the beginning
date’s sequential number from the due date’s sequential number.
Add the due date’s sequential number to the result from the previous step.
If February 29 falls between the two dates, add 1. (Is it a leap year?)
Exact interest: a rate per day that assumes 365 days per year.
Banker’s rule: calculating interest on a loan based on ordinary interest and exact time which
yields a slightly higher amount of interest.
For ordinary interest rate per day, divide the annual interest rate by 360.
For exact interest rate per day, divide the annual interest rate by 365.
A loan of $500 at 7% annual interest rate. The loan was made on March 15 and due on May 15.
(Principal = $500) I = P x R x T
Interest = $5.83
Find the ordinary interest using exact time for the previous loan
A loan of $500 at 7% annual interest rate. The loan was made on March 15 and due on May 15.
(Principal = $500) I = P x R x T
Interest = $5.93
Find the exact interest using exact time for the previous loan
A loan of $500 at 7% annual interest rate. The loan was made on March 15 and due on May 15.
(Principal = $500) I = P x R x T
Interest = $5.93
Find the exact interest using exact time for the previous loan
A loan of $500 at 7% annual interest rate. The loan was made on March 15 and due on May 15.
(Principal = $500) I = P x R x T
Interest = $5.84
To find the adjusted principal and adjusted balance due at maturity for a partial payment made
before the maturity date:
1. Determine the exact time from the date of the loan to the first partial payment.
3. Subtract the amount of interest found in Step 2 from the partial payment.
4. Subtract the remainder of the partial payment (Step 3) from the original principal. This is the
adjusted principal.
6. At maturity, calculate interest from the last partial payment and add to adjusted principal. This is
the adjusted balance due at maturity.
$5,000(.1)(30/360) = $41.67
Find the bank discount and proceeds for a simple discount note.
Find the third-party discount and proceeds for a third-party discount note.
1.3.1 Find the Bank Discount and Proceeds for a Simple Discount Note
A promissory note
1.3.2 Find the True of Effective Interest Rate of a Simple Discount Note
3. Find the effective interest rate: R = I/PT using the proceeds as the principal
What is the effective interest rate of a $5,000 simple discount note, at an ordinary bank discount
rate of 12%, for 90 days?
I = PRT; I = $5,000(.12)(90/360)
R = I/PT; R = $150/$4,850(90/360)
R = .1237113402
1.3.3 Find the Third Party Discount and Proceeds for a Third Party Discount Note
Mihoc Trailer made a note of $10,000 with Darcy Mihoc, owner, at 9% simple interest based on
exact interest and exact time. The note is made on August 12 and due November 10. Since
Mihoc Trailer needs cash, the note is taken to a third party on September 5.
The third-party agrees to accept the note with a 13% annual discount using the banker’s rule.
To find the proceeds, we find the maturity value of the original note, then the third-party
discount.
Exact time is 90 days (314-224)
MV = P(1+ RT)
MV = $10.221.92
Proceeds = A = P – I