Financial mathematics Simple Interest

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Financial mathematics Simple Interest

Postby William » Tue Apr 23, 2013 4:12 am

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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Re: Financial mathematics Simple Interest

Postby nicole » Tue Apr 23, 2013 4:20 am

IB Maths Studies SL, Simple Interest

The simple interest is given by the following formula

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


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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Re: Financial mathematics Simple Interest

Postby William » Tue Apr 23, 2013 4:29 am

Thanks Nicole!
William
 
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Joined: Mon Jan 28, 2013 8:07 pm


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