Chapter 10 - Simple interest. The main contents of the dissertation consist of three main parts: Calculation of simple interest and maturity value, finding unknown in simple interest formula, . rule -- making partial note payments before due date. | Chapter 10 Simple Interest Calculate simple interest and maturity value for months and years Calculate simple interest and maturity value by (a) exact interest and (b) ordinary interest Simple Interest #10 Learning Unit Objectives Calculation of Simple Interest and Maturity Value Using the interest formula, calculate the unknown when the other two (principal, rate, or time) are given Simple Interest #10 Learning Unit Objectives Finding Unknown in Simple Interest Formula List the steps to complete the . Rule Complete the proper interest credits under the . Rule Simple Interest #10 Learning Unit Objectives . Rule -- Making Partial Note Payments before Due Date Maturity Value Maturity Value (MV) = Principal (P) + Interest (I) The amount of the loan (Face value) Cost of borrowing money Simple Interest Formula Simple Interest (I) = Principal (P) x Rate (R) x Time (T) Stated as a Percent Stated in years Jan Carley borrowed $30,000 for . | Chapter 10 Simple Interest Calculate simple interest and maturity value for months and years Calculate simple interest and maturity value by (a) exact interest and (b) ordinary interest Simple Interest #10 Learning Unit Objectives Calculation of Simple Interest and Maturity Value Using the interest formula, calculate the unknown when the other two (principal, rate, or time) are given Simple Interest #10 Learning Unit Objectives Finding Unknown in Simple Interest Formula List the steps to complete the . Rule Complete the proper interest credits under the . Rule Simple Interest #10 Learning Unit Objectives . Rule -- Making Partial Note Payments before Due Date Maturity Value Maturity Value (MV) = Principal (P) + Interest (I) The amount of the loan (Face value) Cost of borrowing money Simple Interest Formula Simple Interest (I) = Principal (P) x Rate (R) x Time (T) Stated as a Percent Stated in years Jan Carley borrowed $30,000 for office furniture. The loan was for 6 months at an annual interest rate of 8%. What are Jan’s interest and maturity value? SI = $30,000 x 6 = $1,200 12 MV = $30,000 + $1,200 = $31,200 Simple Interest Formula Simple Interest (I) = Principal (P) x Rate (R) x Time (T) Stated as a Percent Stated in years Jan borrowed $30,000. The loan was for 1 year at a rate of 8%. What is interest and maturity value? SI = $30,000 x 1 = $2,400 MV = $30,000 + $2,400 = $32,400 Two Methods of Calculating Simple Interest and Maturity Value Exact Interest (365 Days) Time = Exact number of days 365 Method 1 – Exact Interest Used by Federal Reserve banks and the federal government I = P X R X T $40,000 x .08 x 124 365 $1, MV = P + I $40,000 + $1, $41, Exact Interest (365 Days) On March 4, Peg Carry borrowed $40,000 at 8%. Interest and principal are due on July 6. Two Methods of Calculating Simple Interest and Maturity Value Ordinary Interest (360 Days) Bankers Rule Time = .
