**Simple Interest and Simple Discount Chapter 1 Solutions Petr Zima**

Simple Interest and Simple Discount Chapter 1 by Petr Zima Solutions are available here section by section

Section 1.1 Simple Interest

Section 1.2 Discounted Value at Simple Interest

Section 1.3 Equations of Value

Section 1.4 Partial Payments

Section 1.5 Simple Discount at a Discount Rate

Section 1.6 Summary and Review Exercises

At **simple interest**, the interest is computed on the original principal during the whole time, or term of the loan, at the stated annual rate of interest.

**Simple interest** is calculated by means of the **formula**: **I=Prt**

Where**P **= the principal, or the present value of S, or the discounted value of S, or the proceeds.**I **= simple interest.**S** = the amount or the accumulated value of P, or the future value of P, or the maturity value of P.**r **= annual rate of simple interest.**t **= time in years.

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**Exercise 1.1** with **Solution**:

- Determine the maturity value of

a) a $2500 loan for 18 months at 12% simple interest,

b) a $1200 loan for 120 days at 8.5% ordinary simple interest, and

c) a $10 000 loan for 64 days at 7% exact simple interest,