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Module 2 Section 1 and 2

Answer to simple interest rate

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34 views4 pages

Module 2 Section 1 and 2

Answer to simple interest rate

Uploaded by

Erica Napigkit
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as XLSX, PDF, TXT or read online on Scribd
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P m j t i n

2 14,800.00 2 6% 4 0.03 8.00


3 28,000.00 4 10% 1 0.025 4.00
4 20,000.00 4 5% 0.75 0.0125 3.00

Using Table Factor


Table Factor
1 32,350.00 1 6% 4 1.26248
2 18,000.00 1 1% 10 1.10462
3 12,300.00 2 3% 4 1.12649
4 12,500.00 4 8% 5 1.48595

Principal Rate Years Simple Interest Table Factor Compound Interest


1 5,400.00 6% 4 1296 1.26248 1,417.38
2 9,200.00 5% 6 2760 1.34010 3,128.88
3 1,200.00 8% 15 1440 3.17217 2,606.60
4 4,625.00 4% 10 1850 1.48024 2,221.13

Problem Solving
P m j t i n
1 2,800.00 4 6% 5 0.015 20.00
2 6,000.00 2 5% 4 0.025 8.00
3 42,000.00 4 6% 1 0.015 4.00
4.a 18,000.00 4 8% 3 0.02 12.00
4.b 18,000.00 4 8% 6 0.02 24.00
4.c Additional Interest:
F Interest
18,748.20 3,948.20
30,906.76 2,906.76
20,759.41 759.41

F Interest
40,841.13 8,491.13
19,883.20 1,883.20
13,855.86 1,555.86
18,574.34 6,074.34

nd Interest Difference
121.38
368.88
1,166.60
371.13

F Interest
3,771.19 971.19
7,310.42 1,310.42
44,577.27 2,577.27
22,828.35 4,828.35
28,951.87 10,951.87
al Interest: 6,123.52
F t j m i n Table Factor
1 12300 3 6% 1 0.06 3 0.83962
2 14500 2.5 8% 4 0.02 10 0.82035
3 9350 4 5% 2 11 8 0.00000
4 850 10 9% 2 0.045 20 0.41464
5 18853 11 6% 4 0.015 44 0.51939

Problem Solving
PV j m i n excess F1
1 50,000.00 16% 2 0.08 1 1 54,000.00

Loan Date: 8/15/2010


7 months
Maturity Date: 3/15/2011

PV j m i n excess F1
2 200,000.00 25% 4 0.0625 22 1 759,043.47

𝒋=𝒎(√(𝒎&𝑬+𝟏)−𝟏)
E m j
3 0.09 4 0.0871

4 j m E
0.0915 3 0.0943
5 j m E PV FV=PV*E
0.06 4 0.0614 80,000 84,909.08

6 Original Investment Company


j m E PV FV=PV*E
0.12 12 0.1268 100,000 112,682.50

Newl Investment Company


j m E PV FV=PV*E
0.12 4 0.1255 100,000 112,550.88

None. The effective rate of the original company is higher than the new investment company, therefore the old com
Effective rate is higher if there are more comppounding periods per year (m)
Present Value using Table Factor Present Value using Formula
10327.32 10327.32
11895.05 11895.05
0.00 0.00
352.45 352.45
9792.07 9792.07

Final Future Value


54,720.00

Final Future Value


774,856.87

FV=P(1+i)n
84,909.08

FV=P(1+i)n
112,682.50

FV=P(1+i)n
112,550.88

ment company, therefore the old company provides a better return

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