Computing the Time
The computation of the time in a simple discount rate transaction.
Sheila signs a P4,500 discount note. The bank charges 18% discount rate and the proceeds are
P3,487.50. Find the time of the note.
Solution:
Given: F=P4,500, P=P3,487.50, d=18% =0.18
t= D
Fd
= 896
16,000(0.08)
= 896
1,280
= 0.7 years
We can compute for its equivalent in term of number of days by
= 0.7 years x 360 days
1 year
= 252 days
Therefore, the note will end in 0.7 years or 252 days.
Computing the compound interest
Find the interest earned at the end of 4 years if P36,700 is invested at 12% compounded bimonthly.
Solution:
Given: P= P36,700, t= 4 years, m=6, i=12%, n=tm=4(6)=24
F=P(1+i)n
=36,700(1+0.02)24
=36,700(1.02)24
=36,700(1.608437249)
=59,029.65
=P59,029.65
I=F-P
=59,029.65-36,700
=22,329.65
The interest earned is 22,329.65
