1.

Find the ordinary and exact interests on a P230,000 loan at 16% from April 12, 2007 to
August 8, 2007. Use the following:

 Actual time, exact interest:

I e =230,000 (.16 ) ( 118

365 )
=P 11,896.99

Supporting Computation of days:

April 18 (30-12)
May 31 May has 31 days
June 30 June has 30 days
July 31 July has 31 days
August 8_
118 days

 Approximate time, exact interest:

I e =230,000 (.16 ) ( 116

365 )
=P 11,695.34

Supporting Computation of days:

April 18 (30-12)
May 30 All months have 30 days
June 30
July 30
August 8_
116 days

 Actual time, ordinary interest

I e =230,000 (.16 ) ( 118

360 )
=P 12,062.22

 Approximate time, ordinary interest

I e =230,000 (.16 ) ( 116

360 )
=P 11,857.78

Accumulating and Discounting

1. Mr. Rodriguez wishes to have P100,000 payable in 5 years. What sum should be
borrowed now if the discount rate is 18%?
 Solution:

Given: F = 100,000
d = 18%
t = 5 years
P=?

P = F (1 – dt)
= 100,000 [1 - .18 (5)]
= P10,000 (proceeds)

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