Question

a.) Determine the ordinary simple interest on PHP 75,000 for 5 months and 15 days if the rate of interest is 1.75%. Determine the value of your money at the end of 6 months.

b.) Determine the ordinary and exact simple interest on PHP 12,000 for the period from February 13 to November 2, 2017 if the interest is 10.5%.

Answer 1

a) Amount = 75,000

Duration = 5 months and 15 days which is 167 days (assuming 2 months out of 5 months have 31 days, you can also assume 3 months have 31 days which will increase number of days to 168)

Rate of Interest = 1.75%

Daily rate of interest = (1.75% / 365) = 0.0000479452

Interest earned in 167 days is 75,000 * 0.0000479452 * 167 =  600.51

Interest earned in 183 days or 6 months (assuminge three months have 31 days and 3 have 30 days) = 75,000 * 0.0000479452 * 183 = 658.04

b) Amount = 12,000

Period: Feb 13, 2017 to Nov 2, 2017 of same year which is 263 days

Interest rate = 10.5%

Daily rate of interest = (10.5% / 365) = 0.000287671

Interest earned in 263 days is 12,000 * 0.000287671 * 263 = 907.89