1. A loan for $180,000 is obtained for 160 days at 15% simple annual interest.

How much must you pay when your debt is due?____________________________________

30 days = 1
Formula: M=C[1+ (0(0]) month
C= 180,000 160
- = 5.33 months
t= 160 days => 5.33 months
i= 15% per annum => 1.25% per month
 i=t M =C*1 (i)(t)
15% p.a. = months M = (180,000)[1+(0.0125)(5.33)
15% M = (180,000)(1 + 0.066625)
------ = months M = (180,000)(1.066625)
12 M = 191,992.5
1.25% per month

3. If a person deposits noy $50,000 in a time deposit with a 2.20% monthly interest
rate, and
does not withdraw the deposit and reinvest the interest. How much
M = C* will you have in
1 + (¿)(t)
Formula: M=C[1+ (0(0]) M = (50,000)[1+(0.02)(1)
M = (50,000)(1 + 0.02)
C= 50,000 M = (50,000)(1.02)
t= 1 month M = 50,800
i= 2%

5. Maria Eugenia wishes to purchase a property within 2 years. Assume that the down payment that
will have to pay on those dates will be $60,000. If you wish to have that amount within 2 years.
How much should you invest in your fixed income deposit that yields 0.8% simple monthly interest?

_M
Formula:
151+ (0()
0.8% monthly = years
M= 60,000 (0.8%)(12) = years
t= 2 years 9.6% p.a.
i= 0.8% per month => 9.6% per annum

60,000 60,000 60,000

C =---------------------=-------------=---------= 50,335.57047
1 + (0.096)(2) 1 + 0.192 1.192 '
7. What is the value of a promissory note for $5,000 that matures on September 15 if
considers a simple annual interest rate of 5% and today is July 11?

_M
Formula: 151+ (0)( t) *From July 11 to
September 15
M= 5,000 there are 66 days
t= Jul 11 - Sep 15 => Approx.66 days according to the
i= 5% per annum => 0.01369863% per day

5,000 5,000
C51+(0.000136986)(66) 1 + 0.009041095 4,955.199565
5,000
1.009041095

9. One month after taking out a loan, Jose Luis must pay exactly
$850. How much did you get in loan, if the payment to be made includes interest of 18%
per year?

_ M
Formula:
151+ (0( t)
M= 850 18% p.a. = months
t= 1 month 18%
------= months
i= 18% per annum => 1.5% per month 12
1.5% per month

850 850 850

C = 1 +(0.015X1) = 140.015 = 1015 = 837.4384236

11. A person who earns $5,000 a month is fired for

financial problems of the company.
Consequently, he is paid his severance pay, which includes 3 months' salary, seniority
days
and tax deductions, resulting in a net balance of $45,000. What fixed monthly
income
would it represent to the now unemployed person to deposit the amount of his
liquidation in an investment that pays 18% simple annual interest?

Formula: M = C[1 + (i )(-) ]

C= 45,000
t= 1 month
i= 18% per annum => 1.5% per
month
 M = C* 1 + (i)(t)
i=t M = (45,000)[1+(0.015)(1)
18% p.a. = months M = (45,00)(1 + 0.015)
18% M = (45,000)(1.015)
------ = months M = 45,675
12
1.5% per month
13. How much interest should a person who has a debt for
$22,000 pay if he pays it off 6 months later and is charged interest
at the rate of 16% per annum simple?

i=t
16% p.a. = months
16%
Formula: I=C*i*t = months
C= 22,000 12
t= 6 months 1.3333% per month
I = (22,000)(0.013333)(6)
i= 16% per annum => 1.3333% per month I = (22,000)
(0.0779998)
I = 1,759.956
I=C*i*t , 125,000 125,000 125,000
I =(80,000)(0.015)(6) C
= 1 + (0.01)(6) 1 + 0.06 1.06 117,924.5283

15. Salome has 2 debts: a) She owes $80,000 to a bank that charges 1.5% per month.
b) He buys a car on credit; he pays a certain down payment and has a balance of $125,000 that he will
begin to pay in 8 months; in the meantime, he must pay 12% simple annual interest during that
period. How much interest will you pay over the next six months?

Formula: I=c*i*t M
Formula: c-
C= 80,000 1 + (D)(6)
t= 6 months M= 125,000
i= 1.5% per month t= 6 months
i= 12% per annum => 1% per
month
I = (80,00)(0.09) 125,000.00
I = 7,200 - 117,924.5283
7,075.4717

Sum of interest
7,200
+ 7,075.4717
14,275.4717
16. The movements of a customer's credit account were:
Balance recorded on February 14 $ 450
Charge on February 27 $ 150
Credit memo on March 31 $ 400
Charge on April 15 $1000
Charge on April 30 $ 100
If the store charges 14% annual interest,
how much will the customer have to pay on May 15 to settle the account? R= 1, 325.390243
pesos

Formula: M=C[1+(i )(-) ] i= 0.14/365 = 0.000383561 per

C= 450 day
t= 13 days
i=14% p.a. = 0.000383561

Date from February 14 to February 27.

M = C * (1 + i * T)

M = 450 * (1 + [0.000383561 * 13])

M = 450 * 1+ 0.004986301
M=450 * 1.004986301
M = 452.2438355

Formula: M=C[1+(i )(-) ]

C= 602.2438355
t= 32 days
i=14% p.a. = 0.000383561

Date from February 27 to March 31.

M = C * (1 + i * T)

M = 602.2438355 * (1 + [0.000383561 * 32])

M = 602.2438355 * 1+ 0.012273952
M = 602.2438355 * 1.012273952
M = 609.6357474
609.6357474 - 400 (Credit memo) =
209.6357474

Formula: M=C[1+(i )(-) ]

C= 209.6357474
t= 15 days
i=14% p.a. = 0.000383561

Date from March 31 to April 15

 M = C * (1 + i * T)

M = 209.6357474 * (1 + [0.000383561 * 15])

M = 209.6357474 * 1+ 0.005753415
M = 209.6357474 * 1.005753415
M = 210.8418689

Formula: M=C[1+ (0(0])

C=
t= 15 days
i= 14% p.a. = 0.000383561

Date from April 15 to April 31

M = C * (1 + i * T)

M = 1, 210.841869 * (1 + [0.000383561 * 15])

M = 1, 210.841869 * 1+ 0.005753415
M = 1, 210.841869 * 1.005753415
M = 1, 217.808345
1, 217.808345 + 100 (Charge) = 1, 317.808345

Formula: M=C[1+ (0(0])

C= 1, 317.808345
t= 15 days
i= 14% p.a. = 0.000383561
18. Ten percent per annum is a reasonable rate of return on money. Therefore. Which
of the following three sales offers is most suitable for the purchase of land?
a) 90,000 cash.
b) 45,000 in cash and the balance in two promissory notes: one for $25,000 for 30
days, and another for the same amount for 60 days.
c) 30,000 in cash and a 30-day promissory note for $64,000.
25,000 25,000 25,000
-51+(0.0083333)(1) 1 + 0.0083333 = 24,793.38925
1.0083333

25,000 25,000
c
= 1+(0.0083333)(2) 1 + 0.016666

25,000 24,590.18006
1.016666

b)
Formula:
_ M ---------51+4 t)
M= 25,000
t= 30 days => 1 month / 60 days => 2 months
i= 10% p.a. => 0.8333% p.a. => 0.8333%
monthly
45,000.00
+24,793.38925
24,590.18006
94,383.56931

Formula: _ M
151+ (0( t)
M= 64,000
t= 30 days => 1 month
i= 10% p.a. => 0.8333% p.a. => 0.8333%
monthly

64,000
151+ (0.0083333)(1) ’
64,000 64,000
= = 63, 471.07648
1 + 0.0083333 = 1.0083333 = .

30,000.00
+
63,471.07648
93,471.07648
a) 90,000 b) 94,383.56931 c) 93,471.07648
20. At prevailing rates, what amount would be received at the end of the transaction for a
promissory note
with yield payable at maturity for $50,000 for a term of 3 months?

Formula: M=C[1+ COCO] i=t

10% p.a. = 3 months
C= 50, 000 10% p.a. = 0.00833333333%.
t= 3 months 12 months monthly
10% p.a. = 0.00833333333
M=C=C*1 (i)(t)
M = (50,000)[1+(0.008333333)(3)
M = (50,000)(1 + 0.025)
M = (50,000)(1.025)
M = 51,250
 22. Which way of calculating time, real or ordinary, produces a greater amount
of interest?

R= The Ordinary

24. According to the actual criteria, how much time elapses from May 14
to November 15?

Real time from May 14 to November 15

Month Dias
May 17
June 30
July 31
August 31
September 30
October 31
November 15
TOTAL DAY 185

26. At what simple interest rate does a principal double in 20 months?

Formula: M_1 {=C t

C= 1, 000
t= 20 months
M= 2, 000
 i=t
2,000 , annual = 20 months
-1 annual -20= 1.66666666667 "ños
1,000 12
1.666666667
2-1

1.666666667
1
1.666666667
í = 0.599999999 * 100
i = 59.9999999999%
per annum

28. A person lent $400 to a friend, and 4 months later charged him $410. What
annual interest rate did the friend pay?

Formula:
M_1 {=C,1 t
C= 400
t= 4 months
M= $410

410
400

annual = 4
0.333333333 months
. 1.025-1 per year 4 = 0.33333333333 years
i = ----------
0.333333333
. 0.025
i = ----------
0.333333333
í = 0.075 * 100
i = 7.5% p.a.
30. A bicycle costs $800. A buyer pays $500 cash and the remainder in 60 days, with a 5%
surcharge on the cash price at
. What simple annual interest rate was applied?

Formula: M_1 {=C, t

500 * 0.05= $25 surcharge
C= 800
t= 60 days = 2 months
M= $525
525 , i=t
—1 annual = 2 months
800 annual 2 = 0.16666666666
years
0.166666666 12
0.65625 —
1
0.166666666
0.34375
0.166666666
 32. What is the simple annual rate equivalent to a simple quarterly rate of 5%?

i equivalent = ?
quarters= 4 in a year
i= 5 % p.a.
proportional i = 5% * 4 = 20% per annum

34. A lady repays $205.08 for a promissory note of $185 signed on May 10
with 38% simple annual interest. When did you pay for it? R= November 14

Month Dias
205.08
-1 185 May 22
t= 0.38 June 30
1.108540541-1
July 31
t= 0.108540541
0.14
August 31
t = 0.38365 September 30
t = 0.1085 / 0.0010 October 31
t = 189 Days November 14
Total 189

Formula: M_1 {=C, t

C= 185
i= 38% p.a. = 0.38
M= $205
36. On February 15, a promissory note for $1500 with 22% simple annual interest
was signed.
On what date will the interest add up to $400?

Formula t C*i
c= 1,500
i= 22% per annum => 1.8333333333333% per
I= month
400
400
t = --=-------------- -
(1,500)(0.22)
400
t=- On May 7 of the following year,
330 will add $400 of interest.
t = 1.21212121
1.212121 (365) = 442.424165 days
442.424165
= 14.74747217 months
30
0.74747217 * 30 = 22 days
1 year 2 months 22 days
 2. What amount of simple monthly interest yields a principal of
$40,000 at 13% simple annual interest?

Formula: I=C*i*
t
C= 40,000
t= 1 month
i= 13% per year => 1.0833% per month
i=t
13% p.a. = months
13%
------ = months
12
1.0833% per month
I = (40,000)(0.010833)(1)
I = (40,000)(0.010833)
I = 433.32

4. A person purchases a car today that costs $220,000. If we assume that

the vehicle increases in value at a constant rate of 0.2% per month, what is the value
of the vehicle?

Formula: M=C[1+(i)(t)]
C= 220,000
t= 2 months
i= 0.20%
M=C*1 (i)(t)
M = (220,000)[1+(0.002)(2)
M = (220,000)(1 + 0.004)
M = (220,000)(1.004)
M = 220,880

6. How much should you invest today at 1.8% simple interest per month to have
$20,000 in two months?

Formula:
M 151+ (0( t)
M= 20,000
t= 2 months
i= 1.8% per month

20,000 20,000 20,000

C == --------------------=--------------=-----------=
= = =
19,305.01931
, .
1 + (0.018)(2) 1 + 0.036 1.036
 8. To pay off a debt, a person must pay $3,500 on July 15.
With what amount paid today, March 13, would you pay off your debt if you
consider a
interest rate of 6% per annum?
3,500 3,500
-51+(0.000164383)(120) 1 + 0.019726027 3,432.294467
3,500
1.019726027

Formula: c
_M
= 1 + (i)(t)
M= 3,500
t= March 13 - July 11 => Approx. 120 days
i= 6% p.a. => 0.016438356 per day

10. What is the present value of a $9,000 bill of exchange that matures in
60 days, if the interest rate is 17% per annum?

Formula: M = C[1 +(i)(t)]

C= 9,000 17% p.a. = months
t= 60 days => 2 months 17%
------= months
i= 17% per annum => 1.4166% per month 12
1.4166% per
month
30
days=1month
60 12. What amount of money placed in a fixed income investment that pays 10% of
=2months simple annual interest yields monthly interest of $450?

M = C*1+ (i)(t) 5,400

M = (9,000)[1+(0.014166)(2) C
=(0.10)(1)
Formula: I 450 ∗ 12=5,40
M = (9,000)(1 + 0.028332)
C =-------- (i)(t) M = (9,000)(1.028332)
i= 10% p.a. M = 9,254.988
t= 1 year 5,400
i= 450 monthly =>5400 0.10
annually C = 54,000
 14. How much interest would a person
who owes $7,500 have to pay monthly if he/she is charged a simple 8% semiannual
interest rate?

Formula: I=C*i*
C=
t
7,500
t= 1 semester
i= 8% semiannual
I = c * i *t
I = (7,500)(0.08)(1)
I = (7,500)(0.08)
I = 600
17. What is the balance at 1o. of June of a credit account which is charged monthly
18% simple interest per annum and has had the following movements? R=
745.3693118 pesos
March 1 balance $850
March 15 season ticket $150
March 31 charge $450
May 15 season ticket $200
May 31 season ticket $250

Formula: M=C[1+(i )(-) ] i= 0.18/365 = 0.00049315 per

C= 850 day
t= 14 days
i= 18% p.a. = 0.00049315
Date from March 1 to March 15.

M = C * (1 + i * T)

M = 850 * (1 + [0.00049315 * 14])

M = 850 * 1+ 0.0069041
M=850 * 1.0069041
M = 855.868485
855.868485 - 150 (Credit memo) = 705.868485

Formula: M=C[1+(i )(-) ]

C= 705.868485
t= 16 days
i= 18% p.a. = 0.00049315

Date from March 15 to March 31.

M = C * (1 + i * T)

M = 705.868485 * (1 + [0.00049315 * 16])

M = 705.868485 * 1+ 0.0078904
M = 705.868485 * 1.0078904
M = 711.4380697
711.4380697 + 450 (Charge) = 1, 161.43807

Formula: M=C[1+(i )(-) ]

C= 1, 161.43807
t= 45 days
i= 18% p.a. = 0.00049315
Date from March 31 to May 15.
 M = C * (1 + i * T)

M = 1, 161.43807 * (1 + [0.00049315 * 45])

M = 1, 161.43807 * 1+ 0.02219175
M = 1, 161.43807 * 1.02219175
M = 1, 187.212413

Formula: M=C[1+(i )(-) ]

C= 987.2124133
t= 16 days
i= 18% p.a. = 0.00049315

Date from May 15 to May 31.

M = C * (1 + i * T)

M = 987.2124133 * (1 + [0.00049315 * 16])

M = 987.2124133 * 1+ 0.0078904
M = 987.2124133* 1.0078904
M = 995.0019141

Formula: M=C[1+(i )(-) ]

C= 745.0019141
t= 1 day
i= 18% per annum =
0.00049315

Date from May 31 to June 1.

M = C * (1 + i * T)

M = 745.0019141 * (1 + [0.00049315 * 1])

M = 745.0019141 * 1+ 0.00049315
M = 745.0019141 * 1.00049315
M = 745.3693118 pesos
19. At current rates. What is the monthly interest yield of one million pesos in a
time deposit of:
a) 28 days?
b) 91 days?
c) 180 days?

i=t
Formula: M=C[1+ (0(0)] 10% per year =
daily
10% =
months
C= 1'000,000 365
1.25% per month
t= 28 days, 91 days and 180 days
i= 10% per annum => 0.02739726% per day
a) M = C * 1 + (¿)(t)

M = (1'000,000)[1+(0.002739726)(28)
M = (1'000,000)(1 + 0.007671233)
M = (1,000,000)(1.00767123)
M = 1'007671.23
M = C * 1 + (¿)(t)
M = (1'000,000)[1+(0.002739726)(91)
b) M = (1'000,000)(1 + 0.02493151)
M = (1'000,000)(1.02493151)
M = 1'024,931.51
c)
M=C*1+ (í)(t)
M = (1'000,000)[1+(0.002739726)(180)
M = (1'000,000)(1 + 0.04931507)
M = (1,000,000)(1.04931507)
M = 1'04,9,315.07
 21. Find the a) actual and b) approximate or ordinary simple interest on a loan of
$1500 for 60 days, with 15% simple interest.
A) Real
Formula: I=C-i*t i=t
15% p.a. = 60 days
C= 1, 500 15% p.a. = 0.000410958%.
t= 60 days 365 days diary

15% per annum =

i= 0.000410958% per day
I = C*i*t
I = (1,500)(0.000410958)(60)
I = (1,500)(0.02465748)
I = $36.98622
B) Approximate
Formula: I=C*i*t i=t
C= 1, 500 15% p.a. = 60 days
t= 60 days 15% p.a.
---------2--- = 0.000416
15% p.a. = 0.000416666%.
360
days 666% daily
i= diary
I = C*i*t
I = (1,500)(0.000416666)(60)
I = (1,500)(0.02499996)
I = $37.49994
 23. According to ordinary time, how many days elapse from March 15,
to December 18?

Ordinary Time from March 15 to December 18

Month Dias
March 15
April 30
May 30
June 30
July 30
August 30
September 30
October 30
November 30
December 18
TOTAL DAY 273

25. At what simple annual interest rate does $2 500 accrue interest on $250 in 6
months?

Formula:
M_1 {=C t
C= 2, 500
t= 6 months
M= $250
0.5
0.1-1 annual = 6
I =------ months
0.5 6 = 0.5years
0.9 annual -
I =-
0.5
i = 1.8 % p.a.

250

2500
-1

In what time does $2,000 become $2,500 at 14% simple interest per year?

Formula: M_1 {=C t

C= 2, 000
i= 14% p.a. = 0.14
M= 2, 500
 2,500
-1
2,000
0.14
1.25- 1
t=
0.14
0.25
0.14
t = 1.785714286 years
t = 1 year, 9 months, 23

29. Mr. Martinez obtains a loan for $2,000 and pays after 8 months
$2,200. What simple monthly interest rate were you charged?

2,200
-1
2,000
0.666666666 annual = 8
1.1-1 =
months
8 0.6666666666666ye
0.666666666 annual - ars
0.1 12

Formula: M_1 {=C t

C= 2, 000
t= 8 months
M= 2, 200
0.666666666
i = 0 .15 * 100
31. What is the bimonthly proportional simple interest rate equivalent to a rate
of 16% per annum?

i proportional = ? bimesters= 6 in one year i= 16 % per year

proportional i = 16% / 6 = 2.66666666667% = 2.666666667%.
 33. What is the maturity date of a promissory note signed on June 15 for a term
of 180 days?

Month Dias
June 15 to 30
July 15 to 30
August 15th 30
September 15 30
October 15th 30
November 15 30
TOTAL 180

35. A person purchases a blender costing $320 on August 14 and pays for it on November
26,

Formula: M_1 {=C, t

C= 320
t= 104 days
M= $350
350
320

with a credit memo of $350. What exact simple annual interest rate did you pay?
i=t
annual = 104 days
annual 104 = 0.284931506years
0.284931506 365
1.09375-1 0.284931506
I =----------- i = 0.329026443 * 100
0.284931506
0.09375 i = 32.90264433% per annum
 37. Find out what simple monthly interest rate is charged by a
department store on current credit accounts.

Santander:
- Fixed rate of 10%, 11%, 12% or 16% for the entire life of your loan if you contract
3 transactional products (POS, TDC, Payroll, Fundraising, Insurance or
Investment).