LESSON 1

Most of the people deposit money in the bank and other financial institutions so that there will be a growth in the deposit. On the other hand, when people need money, one of the ways they usually resort to is borrowing.

Celso deposited P13, 000 in a bank paying 12% simple interest for 2 years and 9 months. How much will he have in his account at the end of 2 years and 9 months? Assuming that no withdrawals were made? Given: P = P13, 000 r = 12% t = 2yrs & 9mos = 2.75

There are instances when the term for which a certain amount of money borrowed is given in number of days. In such case it is necessary to change the number of days to a fractional part of a year.

Find the interest on P15, 000 at 9 7/8% from November 20, 2007 to April 6, 2008. Given: P = P15, 000 r = 9 7/8% t = November 20, 2007 to April 6, 2008

Accumulate P11, 000 for 7 months at 101 4/5 % simple interest. Given: P = P11, 000 r = 10 4/5 % t = 7 months

In general, the present value corresponds to the face value or the principal. The current value of a future amount is the present value of a loan or investment. When computing the present value, we use the rate of interest currently paid on money invested by other financing institutions or banks

After 120 days, Lenie will pay Rona P16, 500 with interest rate at 14%. Seventy days after the date of the note. Nico discounted the note at 17%. How much money would Rona get from Nico? Given: P = P16, 500 r = 14% or .14 d= .17 t = 120 days

If P30, 000 is due on December 16, 2007, find the proceeds on April 16, 2007, if the discount interest rate is n11 ½ %/ Given: F = P30, 000 d = 11 ½ % t = April 16, 2007 to December 16, 2007 = 8 months

How much is to be repaid by King if he borrowed P22, 00 at 9 ½ % for 3 years and 4 months? Given: P = P22, 000 r = 9 ½ % t = 3 yrs. & 4 mos. = 3 4/12 or 3 1/3 yrs.