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Business Mathematics (Chapter 1)
29 May 2019
nanteniganesan@gmail.com
By the end of this chapter, you should be able to:
• DEFINITON 2:
I = Prt
Where, I = simple interest
P = principal
r = rate of simple interest and
t = time or term in years
1) You want to buy this tractor. It costs RM 15,000. You decided
to get a five year loan with 6.5% interest rate. How much
interest will you pay?
2) The simple interest on RM 45,000 in 3 years is RM 13,500.
What is the rate of interest?
SIMPLE AMOUNT
FORMULA
S = P (1+ rt)
3) RM10, 000 is invested for 4 years 9 months in a bank earning a
simple interest rate of 10% per annum. Find the simple amount at
the end of the investment period.
4. Albert invests RM5,000 in an investment fund for three years. At
the end of the investment period, his investment will be worth
RM6,125. Find the simple interest rate that is offered.
PRACTICE 1
1. Mr Anu deposits RM6,000 in a bank and obtains RM120 simple
interest after three months. Find the simple interest rate offered.
3. Hafiz borrows RM7,000 for one hundred days at nine per cent
per annum simple interest. What is the amount at the end of one
hundred days? How much is the interest charged?
5. Twenty-four months ago, a sum of money was invested. Now the
investment is worth RM12,000. If the investment is extended for
another twenty-four months, it will become RM14,000. Find the
original principal and the simple interest rate that was offered.
TRY YOURSELF
Two years ago, Kim Ean invested RMp in her account which earns
r% simple interest. After eighteen months, she noticed that the
amount had become RM10,450 and today the amount is
RM10,600. Find the value of P and r.
Four basic concepts
1. EXACT TIME is the exact number of days between
two given dates
Solution:
Number of Days
Month Exact Time Approximate Time
March 16 15
April 30 30
May 31 30
June 30 30
July 31 30
August 29 29
Total 167 164
RM 1,000 is invested on 15 March 2015. If the simple interest rate
offered is ten per cent per annum, find the interest received on 29
August 2015 using the:
S = P (1+ rt)
Example:
Solution:
Try yourself
1. Find the present values at 2% simple interest of a debt
RM5,000 due in ten months.
Simple interest
Simple amount
Simple interest, Present value,
formula,
I = Prt P= S(1 + rt)-1
S = P(1+ rt)
Next week class begins with mini quiz covering Chapter 1
Make sure you bring your calculator and own text pad.
THANK YOU