Name: Salac, Ramon Kristian Section: A-112 Time: 7:00-8:00 am

SIMPLE INTEREST AND SIMPLE DISCOUNT

Answer the following questions. Please show your solutions (3 points each number)

1. Determine the principal that would have to be invested to provide P750 simple
interest at the end of 21 months if the interest rate is 8%

P=? I= P750 t= 21 Months or 1 year and 9 months r=8%

P=I/rt P=750/(.08 x 1year and 9/12 months) P=750/.08 x 1.75

P=750/.14 P=5,357.14

2. Shan deposits P50,000 in a savings account that pays interest at the rate of 10% per
year. How much is the interest and what will be the total amount after three years?

P=50,000 r=10% t= 3 years I=? F=?

I=Prt I=50,000x.10x3 I=15,000

F=P+I F=50,000+15,000 F=65,000

3. Block Company deposited P200,000 in a bank account on Oct 12 and withdraws a

total of P225,000 exactly on October 12 of the next year. What is the annual interest
rate at which the company was paid?

P=200,000 F=225,000 t=1 year r=?

I=F-P I=225,000-200,000 I=25,000

r=I/Pt r=25,000/200,000 x 1 r=.125 or 12.5%

4. At what annual interest rate is P600 one year ago equivalent to P800 today?

P=600 F=800 t=1 year r=?

I=F-P I=800-600 I=200

r=I/Pt r=200/600 x 1 r=.3333 or 33.33%

5. How long will it take for an investment of P5,000 to grow to P9,500 if it earns 12%
simple interest per year?

P=5,000 F=9,500 r=12% t=?

I=F-P I=9,500-5,000 I=4,500

t=I/Pr t=4,500/5000 x .12 t=7.5 years or 7 years and 6 months

6. Determine the simple interest earned if P4,500 is invested at 12% interest rate in
255 days, a) using exact interest b) using ordinary interest

P=4,500 r=12% t=255 days I=?

I=Prt

a) Ie=4,500 x .12 x 255/365 Ie= 377.26

b) Io=4,500 x .12 x 255/360 Io= 382.50

7. Find the exact interest on a 150-day loan of P50,000 if the interest rate is 10%?

P=50,000 r=10% t=150 days

Ie=Prt Ie=50,000 x .10 x 150/365 Ie= 2054.79

8. Determine the exact number of days from March 15, 2011 to December 20, 2012.

March 15, 2011 to March 15, 2012 = 366 days

March 2012 = 16 days

366+16+30+31+30+31+31+30+31+30+20
= 646 days
April 2012 = 30 days

May 2012 = 31 days

June 2012 = 30 days

July 2012 = 31 days

August 2012 = 31 days

September 2012 = 30 days

October 2012 = 31 days

November 2012 = 30 days

Dec 20, 2012 = 20 days

9. Find the ordinary interest on a 160-day loan of P500,000 if the interest rate is 8%?

P=500,000 r=8% t=160 days

Io=Prt Io=500,000 x .08 x 160/360 Io= 17777.78

10. Determine the approximate number of days from Dec. 15, 2018 to Oct. 10, 2019.

Dec 2018 = 15 days

Jan to Sept 2019 = 9 months x 30 = 270 days

Oct 2019 = 10

15+270+10 = Approx. 295 days

11. Discount P7,500 at 10% simple discount for 6 months.

F=7,500 d= 10% t=6 months

D=Fdt D=7,500 x .10 x 6/12 D=7,500 x .10 x .5 D=375

P=F-D P=7,500 – 375 P=7,125

12. How much interest will be deducted from a loan worth P30,000 after 2 years with a
discount rate of 5%? How much will the proceeds of the loan be?

F=30,000 t=2 years d=5% D=? P=?

D=Fdt D=30,000 x .05 x 2 D=3,000

P=F-D P=30,000 – 3000 P=27,000
 13. Discount P15,500 at a 12% simple discount for 9 months.

F=15,500 d= 12% t=9 months

D=Fdt D=15,500 x .12 x 9/12 D=15,500 x .12 x .75 D=1,395

P=F-D P=15,500-1,395 P=14,105

14. How much interest will be deducted from a loan worth P50,000 after 3 years with a
discount rate of 7.5%? How much will the proceeds of the loan be?

F=50,000 t= 3 years d= 7.5%

D=Fdt D=50,000 x .075 x 3 D=11,250

P=F-D P=50,000 – 11,250 P=38,750

15. Dominic wants to borrow P15,000 payable in two years at a 10% discount rate. How
much will Dominic receive on the origin date? How much will he pay on the maturity
date?

F=15,000 t=2 years d=10%

D=Fdt D=15,000 x .10 x 2 D=3,000

P=F-D P=15,000 – 3,000 P=12,000
He will receive 12,000 on the origin date and pay 15,000 on the maturity date.