1. A businessman charges his client 2,750 on a loan of 15,800 for 2 years and 3 months.

What
simple interest rate is he using?

I=P x r x t
2,750= 15,800 x r x 2.25
r= 7.74%

2. Aselo borrows 17,000 on April 21, 1992 and repays the loan on April 21, 1994 with interest at 5
1/8%. Find the amount repaid.
Given
P=17,000
r= 5 1/8%
t=2 years

I=P x r x t F=P + I
= 17,000 x 5 1/8% x 2 = 17,000 + 1,742.50
= 1,742.50 = 18,742.50

3. Find the ordinary interest on 2,100 for 65 days at 5 ¼% simple interest

Given
P=2,100
r= 5 ¼%
t=65 days

Io= P x r x t
= 2,100 x 5 ¼% x 65/360
=19.91

4. Find the exact interest on 4,210 for 200 days at 5 1/5% simple interest
Given
P= 4,210
r=5 1/5%
t=200
Ie= P x r x t
= 4,210 x 5 1/5% x 200/365
=119.96

5. Find the actual and approximate time from June 26 to December 6 of the same year
Actual
December 6 = 340
June 26 = 177
163

Approximate
June 4
July 30
August 30
September 30
October 30
November 30
December 6
160

6. Find the actual and approximate time from October 16, 1989 to March 23 1990

Actual
October 16, 1989 = 289
December 31, 1989 = 365
= 76
March 23, 1990 = 82
158 days

Approximate
October 14
November 30
December 30
January 30
February 30
March 23
157 days

7. Find the interest on 4,570 at 5 ¾% from January 17, 1991 to July 7, 1991 using the Ordinary
Interest Actual and Approximate

Actual
July 7 188
January 17 17
171 days
Approximate
January 13
February 30
March 30
April 30
May 30
June 30
July 7
170 days

Io-Actual I= P x r x t = 4,570 x 5.75% x 171/360=124.82

Io-Approximate I= P x r x t = 4,570 x 5.75% x 170/360= 124.09

8. A 90-day note promises to pay 6,500 plus simple interest of 6 3/4%. It is discounted at 5 4/5%
simple discount 20 days before maturity. Find the maturity value of the note and the proceeds of
the sale.
Given
FV= 6,500
r= 6 ¾%
d= 5 4/5%
tn= 90 days

I= FV x r x tn
= 6,500 x 6.75% x 90/360
= 109.69

MV= FV + I
= 6,500 + 109.69
= 6,609.69

Bd= MV x d x td
= 6,609.69 x 5 4/5% x 20/360
= 21.30

Proceeds= MV – Bd
= 6,609.69 – 21.30
= 6,588.39