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Marvin M. de La Cruz Bsoa 2B Math of Investment
Marvin M. de La Cruz Bsoa 2B Math of Investment
Ie= P 3, 896.507
P 3, 896.507 is the simple interest earned using exact interest and actual
number of days.
B. Ordinary interest, actual number of days
Formula: Io= Prt
= P 90,000 (0.1075) (147/360)
= 90,000 (0.1075) (0.40833333333)
Io= P 3, 950.625
P 3,950.625 is the simple interest earned using ordinary interest and actual
number of days.
Ie= P 3, 843.493
P 3,843.493 is the simple interest earned using exact interest and approximate
number of days.
P 3,896.875is the simple interest earned using ordinary interest and approximate
number of days.
2. How long will it take for P15,000 to accumulate to P18,500 if the interest rate
is 14.5%?
GIVEN:
P= P 15,000
I= 3,500
R= 14.5 % or 0.145
T=?
Formula: t=I/Pr
= P 3,500/ 15,000 (0.145)
= 3,500/ 2,175
1.61 or 1 year and 7 months is the time for 15,000 to accumulate to 18,500.
3. Mary David has P1,000,000 in the money market. If the present interest rate
1
is 18%, how much will she earn after 2 2 years?
GIVEN:
P= P 1,000,000
R= 18 % or .18
T= 2 ½ years or 2.5
I=?
Formula: F=P(1+rt)
= P 1,000,000 (1+ (0.18) (2.5))
= 1,000,000 (1+ (0.45)
F= P 1,450,000
GIVEN:
F= P 5,000
D= 7.25 % or 0.0725
T= 8 months
P=?
Formula: P=F(1-dt)
= P 5,000 (1- (0.0725) (8/12))
= 5,000 (1- (0.0725) (0.66666666666))
=5,000 (0.95166666667)
P= P 4,758.333
P 4,758.333 will be the proceeds of the loan borrowed in the given period.
5. Find the discount of a P90,000 loan if the discount rate is 10.5% for 2 years
and 240 days.
GIVEN:
F= P 90,000
D= 10.5% or 0.105
T= 2 years and 240 days or 2 years and 8 months or 2.6666666667
Formula: I=Fdt
= P 90,000 (0.105) (2.6666666667)
=90,000 (0.27999999999)
P= P 25,200
GIVEN:
P= P 40,000
I= 5,000
T= 240 days 0r 8 months 0.6666666667
Formula: r=I/Pt
= P 5,000/ 40,000 (0.6666666667)
= 5,000/ 26,666.666668
r= 0.1875 or 18.75%
GIVEN:
F= P 45,000
I= 5,000
T= 240 days 0r 8 months 0.6666666667
Formula: d=I/ft
= P 5,000/ 45,000 (0.6666666667)
= 5,000/ 30,000.000001
d= 0.1666666667 or 16.67%
GIVEN:
F= P90,000
r= 16.5% or 0.165
t= 5 years and 4 months or 5.3333333333
Formula: P=F/1+rt
= P90,000/ 1+ (0.165) (5.3333333333)
= 90,000/ 1+ 0.87999999999
= 90,000/ 1.87999999999
P= P47,872.340
GIVEN:
F= P47,872.340
r= 16.5% or 0.165
t= 5 years and 4 months or 5.3333333333
Formula: F=P/1-rt
= P47,872.340/ 1- (0.165) (5.3333333333)
= 47,872.340/ 1- 0.87999999999
= 47,872.340/ 0.12000000001
P= P398,936.167
GIVEN:
P= P500,000
r= 0.14 d=0.17
t= 4 t= 2
F=P(1+rt)
= 500,000 (1+(0.14) (4))
= 500,000 (1.56)
F= P 780,000 (maturity value)
Formula: P= F (1-dt)
= P 780,000 (1- (0.17) (2)
= 780,000 (1-0.34)
=780,000 (0.66)
P= P514,800
GIVEN:
P= P450,000
d= 0.16
t= 5 years
Formula: F=P/1-dt
= P 450,000/ 1- (0.16) (5)
= 450,000/ 1-0.8
=450,000/ 0.2
F= P2,250,000
P2,250,000 is the maturity value of the note if the proceeds were
P450,000.
10. A 120-day note promises to pay P125,000 and simple interest at 8.5%. It is
discounted at 10% bank discount rate, 45 days before the maturity date. Find
the maturity value of the note and the proceeds of the sale.
GIVEN:
P=P125,000
R=8.5% d=10%
T= 120 days t=45 days
Formula: F=P(1+rt)
= P 125,000 (1+ (0.085) (120/360))
= 125,000 (1+ (0.085) (0.33333333333))
=125,000 (1+ 0.02833333333)
= 125,000 (1.0283333333)
F= P 128,541.667 (maturity value)
P=F(1-dt)
=P 128,541.667 (1- (0.10) (75/360))
=128,541.667 (1- (0.10) (0.208333333333)
= 128,541.667 (1- 0.0208333333333)
= 128,541.667 (0.97916666667)
GIVEN:
P=P79,500
R=0.085 d=0.105
T= 9 months t=30 days
Formula: F=P(1+rt)
= P 79,500 (1+ (0.085) (9/12))
= 79,500(1+ (0.085) (0.75
=79,500 (1+ 0.06375)
= 79,500 (1. 0.06375)
F= P 84,568.125(maturity value)
P=F(1-dt)
=P 84,568.125(1- (0.105) (240/360))
=84,568.125 (1- (0.105) (0.66666666666)
= 84,568.125 (1- 0.06999999999)
= 84,568.125 (0.93000000001)
P = P78,648.356 (proceeds)
GIVEN:
P=P30,000
R=0.14 d=0.18
T= 6 months t= 3 months
Formula: F=P(1+rt)
= P 30,000 (1+ (0.14) (6/12))
= 30,000(1+ (0.14) (0.5)
=30,000 (1+ 0.07)
= 30,000 (1. 07)
F= P 32,100(maturity value)
P=F(1-dt)
=P 32,100(1- (0.18) (3/12))
=32,100 (1- (0.18) (0.25)
= 32,100 (1- 0.045)
= 32,100 (0.955)
P = P30,655.5 (proceeds)
P30, 655.5 is the total amount that Mrs. Garcia will receive from
the bank.
13. What is the compound amount if P38,000 is invested for 4 years at 11.5%
compounded semi-annually?
Given:
P= P38,000 I= j/m N=tm
T= 4 =0.115/2 =4 (2)
J= 0.115
I=0.0575 N=8
M=2
Formula: F=P(1+i) ^n
= P 38,000 (1+ 0.057) ^8
= 38,000(1.5640225427)
F= P 59,432.857
14. Homer borrowed P10,000 from a bank charging 16% compounded monthly.
How much would he pay at the end of five years?
Given:
P= P10,000 I= j/m N=tm
T= 5 =0.16/12 =5(12)
J= 0.16
I=0.01333 N=60
M=12
333333
Formula: F=P(1+i) ^n
= P 10,000 (1+ 0.01333333333) ^60
= 10,000(2.2138068823)
F= P 22,138.069
P22,138.069 is the amount that Homer should pay at the end of five years.
15. On January 5, Crisel borrowed P28,000 from Philip at 8% compounded
quarterly for 6 years and 4 months. How much would she pay then?
Given:
P= P28,000 I= j/m N=tm
T= 6 years and 4 months =0.08/4 = (6 4/12) (4)
J= 0.08 I=0.02 N= 25.3333333333
M=4
Formula: F=P(1+i) ^n
= P 28,000 (1+0.02) ^25.3333333333
= 28,000(1.6514712515)
F= P 46,241.195
P46, 241.195 is the amount that Crisel should pay.
16. If P400,000 is invested today in a universal bank, how much will Bob have after
7 years and 2 months if interest is at 16% converted annually?
Given:
P= P400,000 I= j/m N=tm
T= 7 years and 2 months =0.16/1 = (7 2/12) (1)
J= 0.16 I=0.16 N= 7.16666666666
M=1
Formula: F=P(1+i) ^n
= P 400,000 (1+0.16) ^7.16666666666
= 400,000(2.8970028523)
F= P 1,158,801.141
P1, 158,801.141is the total amount that Bob will have after 7 years and 2
months.
17. How much should a farmer deposit today for his son’s college education 8 years
and 11 months from today if his deposit P 650,000 earning at 9.5%
compounded annually?
Given:
F= P650,000 I= j/m N=tm
T= 8 years and 11 months =0.095/1 = (8 11/12) (1)
J= 0.095 I=0.095 N=8.91666666666
M=1
18. Find the compound amount if P90,000 is invested for 8 years at 8.5%
compounded continuously.
GIVEN:
P=P90,000
j=0.085
T= 8 years
F=?
Formula: f=Pe^jt
=90,000 (2.71828) ^0.085 (8)
=90,000 (2.71828) ^0.68
f = P177,648.915
P 177,648.915 is the compound amount.
19. To provide for his son’s education, Mr. Lopez deposited P45,000 in a
cooperative. It was invested at 7% compounded daily for the first five years,
8% compounded quarterly for the remaining years. How much will he have for
his son’s tuition fees if the money was invested for 10 years?
Given:
F= P45,000
T1= 5 t2= 5
J1= 0.07 j2= 0.08
M1=365 m2= 4
P 94,886.503 is the total amount that Mr. Lopez should invest for 10 years for his
son’s tuition fees.
20. How long will it take for P74,500 to accumulate to P101,000 if the interest rate
is 10.5% compounded quarterly?
Given:
F= P101,000
P= 74,500
J= 0.105
M=4
t = 2.936
2.936 is the time that it will take for P74,500 to accumulate to P101,000
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