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Title: Simple Interest (Mathematics of Investment)
Description: A compilation of formula for simple interest in the subject mathematics of investment. Easy to understand with a few example problems and solutions.
Description: A compilation of formula for simple interest in the subject mathematics of investment. Easy to understand with a few example problems and solutions.
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Simple Interest Formula
r=
I = Interest
9
r=
...
Lina borrowed 10000 from a bank charging
12% simple interest with a promise that she
would pay the principal and interest at the
end of the agree term
...
22%
�
To find the time
t=
I=4500
r=
...
*rate must be converted to decimal number
...
75 or (3 years and 9 months)
Example:
1
...
5%
simple interest for 2 years
...
Rachel paid 7400 interest at 14
...
What was the original loan?
Solution:
I=7400
Solution:
P=5000
r=
...
r=
...
065x2
P=12758
...
2
...
Find the rate
...
125
30
30
12
12
Total days
t=5
30
July
Solution:
31
June
1
...
5% simple interest for 5 years
...
F=35000[1+(
...
625)
a
...
0
I=Prt
Time Between Dates
I=
Actual Time – 365 days or 366 days on leap years
I=1386
...
�
or{
�
� �
...
Approx
...
0
I=Prt
}
�
I=
I=1361
...
On March 23, 2007 Mary Anne applied for a
48000 loan at 9
...
She
promised to pay on July 12, 2007
...
Actual time, Exact Interest
b
...
time, Exact Interest
c
...
Approx
...
Actual Time, Ordinary Interest
000�
...
Approx
...
time
...
0
I=Prt
Actual
Approx
...
67
April
30
30
�
9
Simple Discount Formula
d=discount rate
Example:
1
...
Find the equivalent
simple interest rate
...
Discount 25000 for 3 years and 6 months at
10% simple discount
...
10x3
...
If 12300 is due at the end of 5 years at 8%
simple discount, find the proceeds and
simple discount
...
08x5)
P=7380
Proceeds
I=Fdt
I=12300x
...
Find the simple discount rate to 15% simple
interest for 240 days
...
−
...
29%
�
�
t=
r=
−
d=
�
+�
+
...
�
0
60
d=13
Title: Simple Interest (Mathematics of Investment)
Description: A compilation of formula for simple interest in the subject mathematics of investment. Easy to understand with a few example problems and solutions.
Description: A compilation of formula for simple interest in the subject mathematics of investment. Easy to understand with a few example problems and solutions.