1. What are the two most common methods businesses use in computing interest?

 Exact Interest Method and Ordinary Interest Method

2. What are the factors being considered in computing for the simple interest? State the
simple interest formula.
 There are only 3 common factors to be considered with regards to simple
interest: Principle, Rate and Time. Its formula is I=PxRxT
3. Enumerate the four-time combinations. Which among these is referred to as the Banker’s
rule?
 Exact interest using actual time
 Exact interest using approximate time
 Ordinary interest using actual time
 Ordinary interest using approximate time
 Ordinary interest using actual time is the banker’s rule because it has
highest interest.
4. Find the simple interest on P8,000 loaned at an annual interest rate of 12% for two years.
 8,000x12%x2= P1,920
5. What is the maturity value of the loan in the previous problem?
 P8,000+P1,920= P9,920
6. Find the time, in days, of each of the following notes using Actual time and Approximate
time: a. January 10, 2021, to May 18, 2021.

Actual Time Approximate Time

January (30-10) 20 January (30-10) 20
February 28 February 30
March 31 March 30
April 30 April 30
May 18 May 18
127 days 128 days
ays