## Financial mathematics Simple Interest

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### Financial mathematics Simple Interest

IB Mathematical Studies, Simple Interest

How can we calculate the simple interest of a loan of \$8000 at a rate of 5% per annum over 16 months?

Thanks
William

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Joined: Mon Jan 28, 2013 8:07 pm

### Re: Financial mathematics Simple Interest

IB Maths Studies SL, Simple Interest

The simple interest is given by the following formula
$I=P \cdot r \cdot n$
Where I is the amount of interest, P is the principal, r is the simple interest rate per annum and n is the time in years.

Regarding your question about the calculation of the simple interest we have that
$I=8000 \cdot 0.05 \cdot \frac{16}{12}=533.33$

The guidelines for doing this exercise directly to GDC Casio FX-9860G is
TVM -> F1:Simple Interest -> n=(4/3)*365=486.67, I%=5, PV=-8000 and then press SI and get your result with a positive sign which is the simple interest.

Hope these help!
nicole

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Joined: Mon Jan 28, 2013 8:10 pm

### Re: Financial mathematics Simple Interest

Thanks Nicole!
William

Posts: 0
Joined: Mon Jan 28, 2013 8:07 pm