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
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.
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,