Nothing Special   »   [go: up one dir, main page]
Scribd Logo
Upload

Welcome to Scribd!

  • 3K views

    Simple Discount: Solution

    Uploaded by

    dreamfever0323
    A simple discount is interest deducted in advance from the final amount or maturity value of a loan. The document provides the formula for simple discount as D = Fdt, where D is the discount amount, F is the final value, d is the discount rate, and t is the time period. It also provides formulas to calculate the time period or discount rate given other known values. Several examples are provided to demonstrate calculating simple discounts, proceeds, maturity values, and time periods using the formulas.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    Simple Discount: Solution

    Uploaded by

    dreamfever0323
    3K views3 pages
    A simple discount is interest deducted in advance from the final amount or maturity value of a loan. The document provides the formula for simple discount as D = Fdt, where D is the discount amount, F is the final value, d is the discount rate, and t is the time period. It also provides formulas to calculate the time period or discount rate given other known values. Several examples are provided to demonstrate calculating simple discounts, proceeds, maturity values, and time periods using the formulas.

    Original Description:

    Mathematics

    Original Title

    Simple Discount

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    A simple discount is interest deducted in advance from the final amount or maturity value of a loan. The document provides the formula for simple discount as D = Fdt, where D is the discount amount, F is the final value, d is the discount rate, and t is the time period. It also provides formulas to calculate the time period or discount rate given other known values. Several examples are provided to demonstrate calculating simple discounts, proceeds, maturity values, and time periods using the formulas.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    3K views3 pages

    Simple Discount: Solution

    Uploaded by

    dreamfever0323
    A simple discount is interest deducted in advance from the final amount or maturity value of a loan. The document provides the formula for simple discount as D = Fdt, where D is the discount amount, F is the final value, d is the discount rate, and t is the time period. It also provides formulas to calculate the time period or discount rate given other known values. Several examples are provided to demonstrate calculating simple discounts, proceeds, maturity values, and time periods using the formulas.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 3

    SIMPLE DISCOUNT

    A simple discount (D) is an interest collected or deducted in advance from the final
    amount or maturity value.

    Formula: 𝑫 = 𝑭𝒅𝒕

    where: F = final amount or maturity value


    d = discount rate
    t = time/term

    The amount that is left after the interest is deducted is called proceeds.
    𝑃 =𝐹 −𝐷
    𝑃 = 𝐹 − 𝐹𝑑𝑡
    𝑷 = 𝑭(𝟏 − 𝒅𝒕)

    Other Formula:
    𝐷
    discount rate 𝑑= 𝐹𝑡

    𝐷
    time 𝑡= 𝐹𝑑

    Example:

    1. Determine the interest to be deducted in advance if ₱ 20 000 is due after 8


    months with a discount rate of 12%.
    Given: F = ₱ 20 000
    d = 12% = 0.12
    8
    t = 8 months = 12

    Solution: D = Fdt
    8
    D = ( ₱ 20 000 ) ( 0.12 ) ( 12 )
    𝐃 = ₱ 1 600
    2. Determine the interest in advance to be deducted for a loan worth ₱ 50 000
    due after 1 year and 3 months with a discount rate of 15%. How much will be
    the proceeds?

    Given: F = ₱ 50 000
    d = 15% = 0.15
    3 15
    t = 1 year & 3 months = 1 12 = 12

    Solution: D = Fdt
    15
    D = ( ₱ 50 000 ) ( 0.15 ) ( 12 )
    𝐃 = ₱ 9 375
    P=F −D
    P = ₱ 50 000 – 9 375
    𝐏 = ₱ 40 625
    Other solution:
    P = F (1 − dt)
    15
    P = ₱ 50 000 [ 1 – (0.15) (12) ]

    𝐏 = ₱ 40 625
    D =F −P
    D = ₱ 50 000 – 40 625
    𝐃 = ₱ 9 375

    3. What is the simple discount rate if the proceed is ₱ 85 000 from a loan of
    ₱ 100 000 payable in 3 years?
    Given: F = ₱ 100 000
    P = ₱ 85 000
    t = 3 years

    Solution: D = F − P
    D = ₱ 100 000 – ₱ 85 000
    𝐃 = ₱ 15 000
    D
    d= Ft

    ₱ 15 000
    d = ( ₱ 100 000 )( 3 )

    𝐝 = 0.05 = 5%

    4. How long will it take for ₱ 50 000 to amount to ₱ 72 500 if the discount rate is
    6%?
    Given: F = ₱ 72 500
    P = ₱ 50 000
    d = 6% = 0.06

    Solution: D = F − P
    D = ₱ 72 500 – ₱ 50 000
    𝐃 = ₱ 22 500
    D
    t= Fd

    ₱ 22 500
    t = ( ₱ 72 500 )( 0.06 )

    t = 5.17241… years
    𝐭 = 5 years, 2 months, 2 days

    5. The proceeds of a 2 year loan is ₱120 000. If the discount rate is 12%, how
    much is the maturity value?
    Given: P = ₱ 120 000
    d = 12% = 0.12
    t=2
    P
    Solution: F= 1 − dt

    ₱ 120 000
    F= 1−(0.12)(2)

    𝐅 = ₱ 157 894.74

    You might also like