CASE

ANALYSIS

SUBMITTED BY:
SHANE NICOLE C. DELACRUZ
BSTM 1.1A

SUBMITTED TO:
ELGENT TANGGALANG
QUESTION NO.1

Case Analysis
ABC Corporation borrowed Php. 35,800 at XYZ Bank, the latter use 8.3% interest rate
for the loan; if today is Nov. 05, 2019 and the due date is May 05, 2020. Find the:
(Show complete process and computation. At the end of the computation explain each
process)

a. Simple Discount
b. Simple Interest
c. Ordinary interest / actual time; ordinary interest/ approximate time
d. Exact interest/actual time; exact interest/approximate time
Answer the following: Support your answer by giving evidence and complete thought.
Answer(s) must be in sentence form.

1. How much is the total amount if you will pay on May 05, 2020 using simple interest ?
Show evidence and explain your answer.

GIVEN: P = Php. 35,800 ; r = 8.3% or 0.083 ; t = 180 days or 6/12

FORMULA: Prt
I = Prt
I = (Php. 35,800)(0.083)(6/12)
I = 1,485.7

EXPLANATION:
In order for me to get the answer, I used I=Prt which is I= (Php. 35,800)(0.083)(6/12). I
used multiplication to multiply all the given in order for me to get the answer. The total
amount that I will pay on May 05,2020 is 1,485.7.
2. What is the new amount you will pay on May 05, 2020 if I give you discount? Show
evidence and explain your answer.

GIVEN: F = Php. 35,800 ; d = 8.3% or 0.083 ; t = 181 days or 6/12

FORMULA: D=Fdt
D=Fdt
D = (Php. 35,800)(0.083)(6/12)
D = 1,485.7

EXPLANATION:
In order for me to get the answer, I used D=Fdt which is F= (Php. 35,800)(0.083)(6/12).
I used multiplication to multiply all the given in order for me to get the answer. The total
amount that I will pay on May 05,2020 is 1,485.7.

3. What is the actual and approximate time? Show evidence and explain your answer.
Month Actual Time Approximate Time
November 05, 2019 30-5= 25 30-5=25
December 31 30
January 31 30
February 28 30
March 31 30
April 30 30
May 05,2020 5 5
Total 181 180

EXPLANATION:
In order for me to get the actual time, first the total days of Novermber minus five is
equals to 25 and then I used addition to add the next total days of the months after that I
add the five days of May and then I get the total of 181 for the actual time. To get the
approximate time, first the total days of Novermber minus five is equals to 25 and then I
used addition to add the next total days of the month that should be all 30 days after
that I add the five days of May and then I get the total of 180 for the approximate time.
QUESTION NO.2

Case Analysis
Make an interest rate (nominal rate) table using the given: Annually (3%); semi-annually
(13%); quarterly (5.2%) and monthly (1.3%)
Description Interest Frequency of Nominal Rate Interest Rate
Period conversion (j) per Period (i)
(m)
Annually 1 year 1 3% 3% or 0.03
Semiannually 6 month 2 13% 6.5% or 0.065
Quarterly 3 months 4 5.2% 1.3% or 0.013
Monthly 1 month 12 1.3% 0.001083

Answer the following: Analyse and explain your answer (in sentence form).
1. If you will invest Php.380,080.75 in a bank with a percentage in quarterly basis, and
compounded every four months, how much you will receive in 2 years

GIVEN: P= Php. 380,080.75 ; t= 2 years ; m=4 ; j= 0.052

I= j/m = 0.052/4 = 0.013
n=tm = 2(4) = 8
F= P(1+i)^m
F= 380,080.75 (1+0.013)^8
= Php. 421,455.22

EXPLANATION:
First I solve for the interest rate per period which is i=j/m next ,solve for the total of
conversion periods which is n=tm and then, I compute the compound amount which is
F= P(1+i)^8 and the total is Php. 421,455.22
2. How much is the interest you will get in your investment after 2 years ? show
evidence and explain your answer.
GIVEN: P= Php. 380,080.75 ; t= 2 years ; m=4 ; j= 0.052
I= j/m = 0.052/4 = 0.013
n=tm = 2(4) = 8
F= P(1+i)^m
F= 380,080.75 (1+0.013)^8
= Php. 421,455.22
Ic = F-P
Ic = 421,455.22 – 380,080.75
= 41,374.47

EXPLANATION:
First I solve for the interest rate per period which is i=j/m next ,solve for the total of
conversion periods which is n=tm next, I compute the compound amount which is F=
P(1+i)^8 and then lastly , I compute for the compound interest which is Ic= F-P and the
the answer is 41,374.47.