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Idiomas disponibles
Idiomas disponibles
SIMPLE
INTEREST
Calculate the interest on a loan for a given number of days at specific annual interest
rate.
SGLUTION:
There are two methods which are used to calculate
Simple
Interest:
the ordinary
method, which
is based on a 360-day
year; or the exact method, which
is based on a 365-day year.
Our
example uses the ordinary 360-day method.
The 365-day calendar can
be used by substituting 365 for 360 in the formula below.
FORMULA:
1 = Principal x Rate x Time
360
Example:
lft
Principal
= $1,000
Interest rate
=
5%
Time
= 80 days
Then
1,000 x 5% x 80
360
= $11.11
tnterest
ot IC+
| 5/4
ENTRY NOTES
ENTER
DEPRESS
DISPLAY
Enter principal
1000
1,000.
Enter Rate
|
05
[x]
50.
Enter days
80
(=)
4,000.
Enter 360 from formula
360
11.11111111111111%
interest
COMPOUND
INTEREST
Calculate the new balance on a deposit which is compounded quarterly for 4 years at
a given annual interest rate.
SOLUTION:
1. Calculate the quateriy interest rate.
2 Calcul
am
tinerelalies
}
FORMULA:
New balance
= P (1 +i)"
Where
P = amount of deposit (principal)
i = interest rate per period
nm = number of years x 4
= $6,150
|
= 5% annum + 4 periods = 0.0125
= 16 {4 years x 4}
Then
6,150 (1.0125)'® = $7,502.32 (New Balance)
Example:
if
Sh art aay
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