Simple interest

1. Clarisse invest 25,000 in a saving account at an annual rate of 5% for 5 years.

a. How much money did she earned in interest? SIMPLE INTEREST: I = PRT
b. What is the total value in her saving account? COMPOUND INTEREST: A = P(1+i)
2. Sheila borrowed 150,000 from joy. If Sheila agreed to pay an annual interest rate of 6%, I = nominal rate/compounding period (j/m)
calculate the amount of simple interest he must pay if the period is 2 years. N = compounding period x time (mt)
3. Kris invest 12,000 into an account paying an annual interest rate of 9%. How many years will it *COMPOUNDING PERIOD*
take for her to earn 6,480? (Annually = 1) (Semi = 2) (Quarterly = 4) (Monthly = 12)
4. Kyla invested 7,500 in a savings account in 5 years, she earns a total of 1500 in interest. What COMPUND INTEREST FORMULA:
is the annual interest rate offered by this account? FV=P(1+i)
5. Roman borrowed 10,000 from Trish, if he agreed to pay 5% annually rate to Trish, calculate
the amount he must pay if the loan period is 9 months. 1. Larry invested 120,000 pesos in a savings account that pays an annual interest rate o 5%. The
ACTUAL NO. OF DAYS: savings account is set to compound quarterly (4 times per year). How much is in larry’s
JAN, MARCH, MAY, JULY, AUG, OCT, DEC. = 31 account after 5 years?
FEB = 28 2. Chris invests in an annuity with an annual fixed interest rate of 6.2%. The annuity compounds
APRIL, JUNE, SEPT, NOV = 30 monthly (12 times per year). If after 10 years, the account balance is 463,990.8104 how much
APPROXIMATE NO. OF DAYS: was the beginning investment?
30/MONTHLY 3. Julie invested 150,000 pesos in a savings account that pays an annual interest rate of 3%. The
EXACT INTEREST: I=Prt (365) savings account is set to compound semi-annually. How much is in larry’s account after 5
ORDINARY INTEREST: I=Prt (360) years and 3 years?
6. Manila company borrowed 148,500 on May 12,2018, with interest due on august 27, if the
BANK DISCOUNTS
interest rate is 10% find the interest on the loan using: Exact and ordinary interest using
actual no. of days and approximate no. of days. Bank discount or simple discount is the charge on business loans on the final amount rather than on the
1. Exact interest at actual no. of days present value. Discount like interest is also an amount paid for borrowing money. However, unlike
2. Exact interest at approximate no. of days. simple interest, discount is charged in advance.
3. Ordinary interest at actual no. of days (banker’s rule) ID = Fdt P = F(1-dt)
4. Ordinary interest at approximate no. of days. F – face value
7. Miko borrowed 150,000from Kyla. If Miko agreed to pay an annual interest rate of 6.25%, D – discount rate
calculate the amount of interest he must pay if the period is: T – time
a. 1 year
b. 9 months 1. A man borrows 8,000 due in 6 months from a lender who charge a discount rate of 8%. How
c. 18 months much was the:
d. 5 years a. The Discount
e. 250 days b. Proceeds
8. Find the rate of interest: 2. Discount 5,000 at 12% simple discount for 4 months.
a. Principal – 200,000 3. Find the amount due at the end of 18 months whose present value is 2,000 at 14% simple
T = 5 years discount.
R=? 4. How much discount rate was charged if the discount on 1,000 was 125 at the end of the one
I = 8,000 year?
b. Future Value = 24,293.125 5. Discount 10,900 for 9 months and find the discount at:
Principal = 23,500 a. 12% simple interest = P = F/1 + rt and then below I = F-P
T = 9 months b. 12% simple discount = ID = Fdt and then below P = F – Id
R=? SIMPLE INTEREST RATE
9. Find the actual and approximate no. of days. September 12, 20218 to January 2, 2019. R = D/1-DT
SIMPLE DISCOUNT RATE
COMPOUND INTEREST
D = R/1-RT
- Is the eight wonders of the world. He who understands it, earns it.
1. A bank discount of 190,000 loan due in 3 years at 10% simple discount. Find the equivalent
simple interest rate.
1. 1,000 is invested for 3 years at 12.5% interest compounded annualy. At simple interest, an
2. Find the simple discount rate equivalent to 14% simple interest for 240 days.
investment of 1,000 at 12.5% interest annually.
Simple Interest Formula:
Interest = PRT
Total Value of saving account = Interest + Principal
Calculate the amount of simple interest = PRT

Compound Interest
A = P(1+i)
FV = P(1+i)
J = nominal rate
m = compounding period
t = time
Calculate the beginning investment = (P(1+i) ) – P then PV = F(1+i)

Bank Discount
Id = FDT
How much was the DISCOUNT = Times fdt
The PROCEEDS = F – Id (total in fdt)
P = P(1-dt) or ID=fdt then F-ID
Find the amount due = F = P/1-dt
Find the discount at simple interest rate: P = F/1+RT then F-P
Find the discount at simple discount rate: Id = Fdt then F-Id
Find the equivalent simple interest rate: r= d/ 1-dt
Find the simple discount rate equivalent: d= r/1-rt