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DEFINITION
INTEREST
THE MATHEMATICS OF
SIMPLE,
SIMPLE
ORDINARY
& EXACT
FINANCE INTEREST
ORDINARY
& EXACT
TITLE
MANAGEMENT
FINANCE
DEFINITION
OF
MONEY
INTEREST
03
LENDING 05
SAVING
01
INVESTING
SIMPLE
ORDINARY
& EXACT
06
02 04 FORECASTING
BORROWING
BUDGETING
TITLE
INTEREST
SIMPLE
ORDINARY
EXACT
DEFINITION
PRINCIPAL, P
INTEREST
RATE, r
%
SIMPLE
TIME, t
ORDINARY
DEBTOR LENDER
& EXACT
INTEREST, I
TITLE
interest that is calculated only on
SIMPLE the amount of money invested or
borrowed and not on the interest that
DEFINITION
I = Prt
SIMPLE
%
ORDINARY
& EXACT
TITLE
MRS. SANCHEZ APPLIES FOR A HOUSING LOAN.
SIMPLE IF SHE LOANED ₱ 500,000 AT THE BANK AT
25%, HOW MUCH IS THE INTEREST IF SHE IS TO
DEFINITION
PRINCIPAL, P
₱ 500,000 ₱ 500,000 P
.25 r
2 t
INTEREST
RATE, r
25%
%
TIME, t 250,000
2 years
SIMPLE
INTEREST, I
MRS. SANCHEZ
ORDINARY
& EXACT
AND
ORDINARY
Ordinary interest is computed
based on the assumption that the
year contains 360 days and each
DEFINITION
days.
𝒏𝒖𝒎𝒃𝒆𝒓 𝒐𝒇 𝒅𝒂𝒚𝒔
Iₑ= Pr
𝟑𝟔𝟓
SIMPLE
ORDINARY
& EXACT
TITLE
ORDINARY
AND
MRS. SANCHEZ APPLIES FOR A HOUSING
LOAN. IF SHE LOANED ₱ 500,000 AT THE
BANK AT 25%, HOW MUCH IS THE
DEFINITION
ORDINARY
PRINCIPAL, P
₱ 500,000 Iₒ = ₱ 500, 000 x .25 x 425
INTEREST
360
RATE, r
Iₒ = ₱147,569.45
25%
% EXACT
SIMPLE
TIME, t
425 days Iₑ = ₱ 500, 000 x .25 x 425
365
INTEREST, I = ?
Iₑ = ₱145,547.95
ORDINARY
& EXACT
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