BUSINESS MATHEMATICS - MAT112

CHAPTER 1

SIMPLE INTEREST
 CONTENTS
➢ SUBTOPIC 1.1 - INTRODUCTION
SUBTOPIC 1.4
➢ SUBTOPIC 1.2 - SIMPLE INTEREST FORMULA
➢ SUBTOPIC 1.3 - SIMPLE AMOUNT FORMULA
LAWS OF SET THEORY
➢ SUBTOPIC 1.4 - PRESENT VALUE
➢ SUBTOPIC 1.5 - FOUR BASIC CONCEPTS
By the end of this chapter, you should be able to:

❑ Explain the concept of simple interest.

❑ Use the simple interest formula to calculate interest,

interest rate, time & dates with data provided.
❑ Use the simple amount formula to calculate the present
& future values of some investments.
❑ Identify 4 concepts: exact simple interest, ordinary
simple interest, exact time & approximate time.
❑ Apply the Banker’s Rule to some investment & loan
problems.
SUBTOPIC 1.1 INTRODUCTION
❑ Interest : Regarded as the payment of the use of service of capital.
(How much is paid for the use of money)

❑ Can be defined in 2 ways;

1) Interest is money earned 2) Interest is charge incurred

by investor (saver) when by the borrower when a
money is invested (saved). loan / credit is obtained.

❑ Interest is usually expressed as per cent per annum (%) – per year.
 INTEREST
SUBTOPIC 1.4
Interest is money earned when Interest is charge incurred when a
money is invested. loan or credit is obtained.

Example: Deposit RM1000 in a bank for Example: Borrowed RM1000 from bank

LAWS OF SET THEORY

a year, at the end of year 1, RM1000
become RM1050.The extra RM50 is the
interest you earned.
for a year, at the end of the year you
need to pay RM1080.The extra RM80 is
the charge or interest you need to pay.
 Amir wants to borrow RM1,000 from a bank.
The bank says, Amir needs to pay 10% interest after a year.

Lender Borrower

Principal

RM1,000

Today

Interest

RM1,000 + 10% x RM1,000 = RM100 (Interest)

Next year
SUBTOPIC 1.2 SIMPLE INTEREST FORMULA
❑ Simple interest is the interest calculated based on the original principal amount for
the entire period it is borrowed/invested.

❑ How simple interest works?

-Pay the same amount of interest every year.

❑ The formula is given by;

Simple interest
𝑰 = 𝑷𝒓𝒕 Time/term in
years (y)
amount (RM)

Original
Simple interest
principle
rate per annum
amount (RM)
(%)
 Amir wants to borrow RM1,000 from a bank.
The bank says, Amir needs to pay 10% interest after a year.

Principal

RM1,000

Today

Interest

Total
10% xinterest for=4RM100
years: (Interest)
RM1,000 + RM1,000
RM100 (Year 1) + RM100 (Year 2)
+ RM100 (Year 3) + RM100 (Year 4)
= RM400
Next year
Tips !
When using the formula :
❖ Rate (r) must be changed to decimal or fraction,
Example : 5.5 % 0.055
Rates (r)
8% 0.08

❖ Time (t) must first be converted to years,

Example :

12 months 1 year Time/duration (t)

4 years 9 months 4. 75 years
9Τ12
9
EXAMPLE 1
RM1,000 is invested for two years in a bank, earning a simple interest rate of 8%
per annum. Find the simple interest earned.

SOLUTION:

𝑃 = 𝑅𝑀1000 𝐼 = 𝑃𝑟𝑡

𝑟 = 8% 0.08 𝐼 = (1000)(0.08) 2

𝑡 = 2 𝑦𝑒𝑎𝑟𝑠 𝑰 = 𝑹𝑴𝟏𝟔𝟎

𝑰 =?
EXAMPLE 2
Hanna borrows RM7,000 for 3 years 3 months at 5% per annum simple interest.
How much is the interest charged?

SOLUTION:
𝑃 = 𝑅𝑀7000 𝐼 = 𝑃𝑟𝑡

𝑟 = 5% 0.05 𝐼 = (7000)(0.05) 3.25

3 𝑰 = 𝑹𝑴𝟏𝟏𝟑𝟕. 𝟓𝟎
𝑡=3 → 3.25 𝑦𝑒𝑎𝑟𝑠
12

𝑰 =?
EXAMPLE 3
Mr. Aru deposited RM6,000 in a bank and obtained RM120 simple interest after
three months. Find the simple interest rate offered.

SOLUTION: 𝐼 = 𝑃𝑟𝑡

𝑃 = 𝑅𝑀6000 120 = (6000)(𝑟) 0.25

𝑰 = 𝑹𝑴𝟏𝟐𝟎 120 = 1500 𝑟

3 120
𝑡 = 3 𝑚𝑜𝑛𝑡ℎ𝑠 = → 0.25 𝑦𝑒𝑎𝑟𝑠 = 𝑟
12 1500

𝒓=? 𝒓 = 𝟎. 𝟎𝟖 = 𝟖%
SUBTOPIC 1.3 SIMPLE AMOUNT (S)
FORMULA
❑
SUBTOPIC 1.4
Simple amount (S) is the sum of the original principal amount (present value) and
the interest earned. → S=P+I

❑ Also known as future value/ maturity value/ accumulated amount.

❑ The formula is given by;

𝑺 = 𝑷 𝟏 + 𝒓𝒕
LAWS OF SET THEORY
Time/term in
Simple amount years (y)
(RM)

Original
Simple interest
principal
rate per annum
amount (RM)
(%)
 SIMPLE AMOUNT FORMULA
SUBTOPIC
𝑰 = 𝑷𝒓𝒕 1.4
𝑺=𝑷+𝑰

𝑺 = 𝑷 + 𝑷𝒓𝒕

𝑺 = 𝑷 𝟏 + 𝒓𝒕
EXAMPLE 4
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.

SOLUTION:
𝑃 = 𝑅𝑀10,000 𝑆 = 𝑃 1 + 𝑟𝑡

𝑟 = 10% 0.10 S = 10,000 1 + 0.10 4.75

9
𝑡 = 4 12 𝑦𝑒𝑎𝑟𝑠 → 4.75 𝑦𝑒𝑎𝑟𝑠 𝑺 = 𝑹𝑴𝟏𝟒 𝟕𝟓𝟎

𝑺=?
EXAMPLE 5
Rahimi 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.

SOLUTION:

𝑃 = 𝑅𝑀5000 𝑆 = 𝑃 1 + 𝑟𝑡

𝑆 = 𝑅𝑀6125 6125 = 5000 1 + 𝑟 3

𝑡 = 3𝑦𝑒𝑎𝑟𝑠 6125 = 5000 + 15000𝑟

𝒓 =? % 𝒓 = 𝟕. 𝟓%
EXAMPLE 6

SOLUTION:
𝑃 = 𝑅𝑀2000 a) b)

𝑟 = 7.5% 0.075 𝐼 = 𝑃𝑟𝑡 𝑆 =𝑃+𝐼

𝑡 = 2𝑦𝑒𝑎𝑟𝑠 𝐼 = (2000)(0.075) 2 S = 2000 + 300

𝑰=? 𝑰 = 𝑹𝑴𝟑𝟎𝟎 𝑺 = 𝑹𝑴𝟐𝟑𝟎𝟎

𝐒=?
SUBTOPIC 1.4 PRESENT VALUE (P)
Amount that has to be invested now at a
given rate to accumulate to a given
amount at the end of a defined period

Similar Term
Present Value (P)
P = Principal = Original Amount

𝑃 = 𝑆 1 + 𝑟𝑡 −1
Formula
Use Simple Amount (S) formula as learned before,

S = P (1 + rt)
rearrange /factorize

𝑺
𝑷=
𝟏 + 𝒓𝒕

𝑷 = 𝑺 𝟏 + 𝒓𝒕 −𝟏
EXAMPLE 7
Find the present value at 8% simple interest of a debt RM3000 due in 10 months.

SOLUTION:

𝑃 = 𝑆 1 + 𝑟𝑡 −1
𝑆 = 𝑅𝑀3,000

𝑟 = 8% 0.08 −1
10
𝑃 = 3000 1 + 0.08
10 12
𝑡 = 10𝑚𝑜𝑛𝑡ℎ𝑠 = 𝑦𝑒𝑎𝑟𝑠
12
𝑷 = 𝑹𝑴𝟐𝟖𝟏𝟐. 𝟓𝟎
𝑷=?
EXAMPLE 8
A savings account was opened 2 years and 4 months ago. Now the account is worth
RM 6,400. Find the original investment if the account offers 12% per annum simple
interest.

SOLUTION:
4 7 𝑃 = 𝑆 1 + 𝑟𝑡 −1
𝑡 = 2 𝑦𝑒𝑎𝑟𝑠 4 𝑚𝑜𝑛𝑡ℎ𝑠 = 2 = 𝑦𝑒𝑎𝑟𝑠
12 3
−1
7
𝑆 = 𝑅𝑀 6400 𝑃 = 6400 1 + 0.12
3
𝑟 = 12% 0.12
𝑷 = 𝑹𝑴𝟓𝟎𝟎𝟎
𝑷 = 𝑹𝑴 ?
SUBTOPIC 1.5 4 BASIC CONCEPTS
▪ 4 basic concepts in simple interest is given by;

TERMS DEFINITION
Exact Time (ET) ❑ The exact number of days between 2
given dates.
Approximate Time (AT) ❑ Assume every month throughout a
year has 30 days.
Exact Simple Interest (ESI) ❑ Calculated using a 365/366-days in a
year.
Ordinary Simple Interest ❑ Calculated using 360-days in a year.
(OSI)
 Exact Time & Approximate Time &
Exact Simple Interest Exact Simple Interest
(ET & ESI) (AT & ESI)

!! BANKER’S
RULE !!
4 BASIC CONCEPTS
LAWS OF SET THEORY
Exact Time &
Approximate Time &
Ordinary Simple Interest
Ordinary Simple Interest
(AT & OSI)
(ET & OSI)
 CONVERSION METHODS
Time (t) Conversion into yearly basis

SUBTOPIC 1.4
𝒏𝒐. 𝒐𝒇 𝒅𝒂𝒚𝒔 (𝑬𝑻/𝑨𝑻)
Daily basis (d)
𝑬𝑺𝑰/𝑶𝑺𝑰
𝒏𝒐. 𝒐𝒇 𝒘𝒆𝒆𝒌𝒔
Weekly basis (w)
𝟓𝟐
𝒏𝒐. 𝒐𝒇 𝒎𝒐𝒏𝒕𝒉𝒔
Monthly basis (m)

LAWS OF SET THEORY

Yearly basis (y)
𝟏𝟐
-
𝒏𝒐. 𝒐𝒇 𝒎𝒐𝒏𝒕𝒉𝒔
Year + Months 𝒚𝒆𝒂𝒓 +
𝟏𝟐
𝒏𝒐. 𝒐𝒇 𝒘𝒆𝒆𝒌𝒔
Year + Weeks 𝒚𝒆𝒂𝒓 +
𝟓𝟐
Tips ! Carefully calculate time (t) !

1) Determine whether the given year is LEAP YEAR / NOT.

2) Recognize days of each month.

Leap Year February Month: 29 days

Days in a Year: 366 days
LAWS OF SET THEORY
None Leap Year February Month: 28 days
Days in a Year: 365 days
How to calculate Leap year /none leap year?

* If the year given can

SUBTOPIC 1.4 be divided by 4 without

having a decimals/have
remainder, so it is a leap
year !

Example: 2016, 2012

 Days of each month

SUBTOPIC 1.4

LAWS OF SET THEORY

EXAMPLE 9
Find the exact and approximate time from 3 May 2019 to 15 September 2019.

SOLUTION:
Exact Time Approximate Time 30-3=27
31-3=28

May 28 May 27
June 30 June 30
July 31 July 30
Aug 31 Aug 30
Sept 15 Sept 15
= 135 days = 132 days

General calculation-
Specific calculation assume every month
have 30 days
EXAMPLE 10
Find the exact number of days and approximate number of days from
5 February 2012 to 12 June 2012.

SOLUTION:
Number of days
Month Exact time Approximate time
Feb 29 - 5 = 24 30 - 5 = 25
Mar 31 30
Apr 30 30
May 31 30
June 12 12
Total 128 127
EXAMPLE 11
Exact time
March 31-15= 16
Find t from 15 March 2015 until 29 August 2015 using: April 30
May 31
a) Exact time and exact simple interest Jun 30
167
t= years July 31
365
August 29
b) Exact time and ordinary simple interest @ Banker’s Rule Total 167
167
t= years
360 Approximate time
March 30-15= 15
c) Approximate time and exact simple interest
164 April 30
t= years
365 May 30
Jun 30
d) Approximate time and ordinary simple interest
164 July 30
t= years
360 August 29
Total 164
 EXAMPLE 12

SOLUTION :
MONTH AT 196 98
𝑃 = 𝑅𝑀6000 ∴𝑡= = 𝑦𝑒𝑎𝑟𝑠
May’12 30-15=15 366 183

𝑡 = 15𝑡ℎ 𝑀𝑎𝑦 2012 − 1𝑠𝑡 𝐷𝑒𝑐 2012 June 30 𝑆 = 𝑃 1 + 𝑟𝑡

July 30
𝑡 =? 𝑑𝑎𝑦𝑠 (𝐴𝑇, 𝐸𝑆𝐼 (𝑙𝑒𝑎𝑝 𝑦𝑒𝑎𝑟)) 98
August 30 𝑆 = 6000 1 + 0.08
183
𝑟 = 8% 0.08 Sept 30
Oct 30 𝑺 = 𝑹𝑴𝟔𝟐𝟓𝟕. 𝟎𝟓
𝑺 = 𝑹𝑴 ?
Nov 30
Dec 1
TOTAL 196 days
 EXAMPLE 13

SOLUTION:
78 13
𝑃 = 𝑅𝑀3000 MONTH ET ∴𝑡= = 𝑦𝑒𝑎𝑟𝑠
360 60
Mar’15 31 – 20 = 11
𝒓 =? %
Apr 30 𝐼 = 𝑃𝑟𝑡
13
𝑡 = 20𝑡ℎ 𝑀𝑎𝑟 2015 − 6𝑡ℎ 𝐽𝑢𝑛𝑒 2015 May 31 50 = (3000)(𝑟)
60
June 6 50 = 650𝑟
𝑡 =? 𝑑𝑎𝑦𝑠 (𝑬𝑻, 𝑶𝑺𝑰 − 𝑩𝒂𝒏𝒌𝒆𝒓′ 𝒔 𝑹𝒖𝒍𝒆)
TOTAL 78 days
50 1
𝐼 = 𝑅𝑀50 𝑟= = × 100
650 13

𝒓 = 𝟕. 𝟔𝟗%
EXAMPLE 14
How long will it take for RM500 to accumulate to at least RM560 at 13.25%
ordinary simple interest?

𝑆 = 𝑃 1 + 𝑟𝑡
SOLUTION : 𝑥
560 = 500 1 + 0.1325
360
𝑃 = 𝑅𝑀500
560 𝑥
= 1 + 0.1325
𝑆 = 𝑅𝑀560 500 360
𝑥
𝑟 = 13.25% 0.1325 1.12 − 1 = 0.1325
360

𝒕 =? 𝒅𝒂𝒚𝒔 (𝑶𝑺𝑰) 0.12 𝑥

=
0.1325 360

0.12
x 360 = 𝑥
0.1325

𝒙 = 𝟑𝟐𝟔. 𝟎𝟑𝟕𝟕 ≈ 𝟑𝟐𝟕 𝒅𝒂𝒚𝒔

 SPECIAL CASE TYPE I
Amount of investment/loan is ADDED during the investment/borrowing period

𝒕𝟏 = 𝒕
𝑺𝟏 = 𝑷𝟏 𝟏 + 𝒓𝒕𝟏
𝒕𝟐 = 𝒕 − 𝒕𝟎
𝑺𝟐 = 𝑷𝟐 𝟏 + 𝒓𝒕𝟐

𝟎 𝒕𝟎 𝒕
𝑷𝟏 𝑺 = 𝑺𝟏 + 𝑺𝟐
𝑷𝟐
EXAMPLE 15
SOLUTION: i) The balance (accumulated amount) in the account after 10 years
from the first savings.
𝑃1 = 𝑅𝑀10000
𝑆 = 𝑃 1 + 𝑟𝑡
𝑡1 = 10 𝑦𝑒𝑎𝑟𝑠 𝑆2 = 𝑃2 1 + 𝑟𝑡2 𝑺 = 𝑺𝟏 + 𝑺𝟐
𝑆1 = 𝑃1 1 + 𝑟𝑡1
𝑃2 = 𝑅𝑀5500 𝑆2 = 5500 1 + 0.07 4 𝑆 = 17000 + 7040
𝑆1 = 10000 1 + 0.07 10
𝑡2 = 4 𝑦𝑒𝑎𝑟𝑠 𝑺𝟐 = 𝑹𝑴𝟕𝟎𝟒𝟎 𝑺 = 𝑹𝑴𝟐𝟒𝟎𝟒𝟎
𝑺𝟏 = 𝑹𝑴𝟏𝟕𝟎𝟎𝟎
𝑟 = 7% 0.07

𝑺 = 𝑺𝟏 + 𝑺𝟐 ii) The interest earned after 10 years from the first savings.

𝑰=𝑺−𝑷 𝐼 =𝑆−𝑃
𝐼 = 24040 − 10000 − 5500
𝐼 = 𝑆 − 𝑃1 + 𝑃2
𝑰 = 𝑹𝑴𝟖𝟓𝟒𝟎
𝐼 = 𝑆 − 𝑃1 − 𝑃2
 SPECIAL CASE TYPE II
Changes in INTEREST RATE during the investment/borrowing period

𝒓 𝟏 , 𝒕𝟏 = 𝒕𝟎 𝒓 𝟐 , 𝒕𝟐 = 𝒕 − 𝒕𝟎
𝑰𝟏 = 𝑷𝒓𝟏 𝒕𝟏 𝑰𝟐 = 𝑷𝒓𝟐 𝒕𝟐

𝟎 𝒕𝟎 𝒕
𝑷 𝑺 = 𝑷 + 𝑰𝟏 + 𝑰𝟐
EXAMPLE 16

iii) Find the accumulated amount at the end of the year?

 i) Find the amount in the account at the end of the first six months.
SOLUTION: 𝑺 = 𝑷 𝟏 + 𝒓𝒕

𝑆 = 𝑃 1 + 𝑟1 𝑡1
𝑃 = 𝑅𝑀1000
𝑆 = 1000 1 + 0.085 0.5
6
𝑡1 = 6 𝑚 = = 0.5 𝑦 𝑺 = 𝑹𝑴𝟏𝟎𝟒𝟐. 𝟓𝟎
12

𝑟1 = 8.5% 0.085 ii) What is the total interest earned at the end of the year?
𝑰 = 𝑷𝒓𝒕
6 𝐼2 = 𝑃𝑟2 𝑡2 𝑰 = 𝑰𝟏 + 𝑰𝟐
𝑡2 = 6 𝑚 = = 0.5 𝑦 𝐼1 = 𝑃𝑟1 𝑡1
12
𝐼2 = 1000 0.07 0.5 𝐼 = 42.50 + 35
𝐼1 = 1000 0.085 0.5
𝑟2 = 7% 0.07 𝑰𝟐 = 𝑹𝑴𝟑𝟓 𝑰 = 𝑹𝑴𝟕𝟕. 𝟓𝟎
𝑰𝟏 = 𝑹𝑴𝟒𝟐. 𝟓𝟎

ii) Find the accumulated amount at the end of the year?

𝑺=𝑷+𝑰
𝑺 = 𝑷 + (𝑰𝟏 + 𝑰𝟐 )

𝑆 = 1000 + 77.50

𝑺 = 𝑹𝑴𝟏𝟎𝟕𝟕. 𝟓𝟎
TUTORIAL
TUTORIAL 1
SOLUTION:

𝑃 = 𝑅𝑀300 𝑆 = 𝑃 1 + 𝑟𝑡
9
= 0.075𝑡
𝑆 = 𝑅𝑀333.75 333.75 = 300 1 + 0.075 𝑡 80

𝑟 = 7.5% 0.075 333.75 9

= 1 + 0.075𝑡 80
300 𝑡=
𝒕 =? 𝒅𝒂𝒚𝒔 (BR) 0.075
89
= 1 + 0.075𝑡 3
80 𝑡 = × 360 (𝐵𝑅)
2
89
− 1 = 0.075𝑡 𝒕 = 𝟓𝟒𝟎 𝒅𝒂𝒚𝒔
80
TUTORIAL 2

𝑷 = 𝑹𝑴𝑿 𝑆 = 𝑃 1 + 𝑟𝑡

𝑆 = 𝑅𝑀2540 + 𝑅𝑀2600 = 𝑅𝑀5140 5140 = 𝑋 1 + 0.05 4

𝑟 = 5% 0.05 6
5140 = 𝑋
5
𝑡 = 4𝑦
5140
𝑋=
6
5

𝑿 = 𝑹𝑴𝟒𝟐𝟖𝟑. 𝟑𝟑
TUTORIAL 3

𝑃 = 𝑅𝑀3750 𝑆 = 𝑃 1 + 𝑟𝑡

𝑡 = 3 𝑦𝑒𝑎𝑟𝑠 𝑆 = 3750 1 + 0.075 3

𝑟 = 7.5% 0.075 𝑆 = 𝑅𝑀4593.75

𝑩𝒂𝒍𝒂𝒏𝒄𝒆 = 𝑺 − 𝑹𝑴𝟏𝟎𝟎𝟎 ? 𝐵𝑎𝑙𝑎𝑛𝑐𝑒 = 𝑅𝑀4593.75 − 𝑅𝑀1000

𝑩𝒂𝒍𝒂𝒏𝒄𝒆 = 𝑹𝑴𝟑𝟓𝟗𝟑. 𝟕𝟓
TUTORIAL 4
A man obtained a personal loan on April 10, 2015. He repaid RM3,952 on October 7,
2015 thereby settling the loan in full. If the interest charged was 8%, how much did he
borrow?
* Since question does not mentioned to

SOLUTION:
use which concept/rule, thus assume
using BANKER’S RULE (ET, OSI).
𝑃 = 𝑆 1 + 𝑟𝑡 −1
MONTH ET −1
S = 𝑅𝑀3,952 180
Apr’15 30 – 10 = 20 𝑃 = 𝑅𝑀3952 1 + 0.08
𝑟 = 8% (0.08) May 31
360
June 30 −1
𝑡 = 10 𝐴𝑝𝑟𝑖𝑙 15 − 7 𝑂𝑐𝑡 15 𝑃 = 𝑅𝑀3952 1.04
July 31
P=? Aug 31
𝑷 = 𝑹𝑴 𝟑, 𝟖𝟎𝟎
Sept 30
Oct 7
TOTAL 180 days
TUTORIAL 5
ANSWER: TUTORIAL 5 Question (ii)

𝑺 = 𝑷 𝟏 + 𝒓𝒕

Question (i) 1
3900 = 3500 1 + 𝑟
𝑃 = 𝑅𝑀3500 MONTH ET 3
May 31-23=8
𝑆 = 𝑅𝑀3900 3900 1
June 30 =1+ 𝑟
3500 3
𝒓 = 𝒓% July 31
39 1
August 31 −1= 𝑟
𝑡 = 23 𝑀𝑎𝑦 2009 − ? 35 3
Sept 20
𝑡 = 120 𝑑𝑎𝑦𝑠 (𝑩𝑹 − 𝑬𝑻, 𝑶𝑺𝑰) 4 1
TOTAL 120 days = 𝑟
35 3
120 1
𝑡= = 𝑦 4
360 3 ∴ 𝟐𝟎 𝒔𝒆𝒑𝒕𝒆𝒎𝒃𝒆𝒓 𝟐𝟎𝟎𝟗
35
𝑟= = 0.3429 × 100 = 𝟑𝟒. 𝟐𝟗 %
1
3
TUTORIAL 6

1 Question (ii)
= 0.05𝑡
𝑆 = 𝑅𝑀8200 Question (i) 40 MONTH ET
1 Jan’ 08 31 – 2 = 29
𝑃 = 𝑅𝑀8000 𝑆 = 𝑃 1 + 𝑟𝑡 = 0.05𝑡
40 Feb 29
𝑟 = 5 % (0.05) 8200 = 8000 1 + 0.05 𝑡 March 31
1
40 April 30
𝑡 = ? −30 𝐽𝑢𝑛𝑒 2008 8200 𝑡=
= 1 + 0.05𝑡 0.05 May 31
8000
𝒕 =? (𝑩𝑹 − 𝑬𝑻, 𝑶𝑺𝑰) 𝟏 June 30
41 𝒕 = 𝒚 × 𝟑𝟔𝟎
− 1 = 0.05𝑡 𝟐 TOTAL 180 days
40 𝒕 = 𝟏𝟖𝟎 𝒅𝒂𝒚𝒔
∴ 𝟐𝒏𝒅 𝑱𝒂𝒏𝒖𝒂𝒓𝒊 𝟐𝟎𝟎𝟖
TUTORIAL 7
On 10 March 2011 Emmy deposited RMX in an account that paid 8% per annum simple
interest. On 28 August 2011, she withdrew RM8,000 from the account and the balance in
the account was RM4,000. Find the initial deposit RMX using the Banker’s Rule.
SOLUTION :
MONTH AT 𝑆 = 𝑃 1 + 𝑟𝑡
𝑷 = 𝑹𝑴 𝑿
March’11 31-10=21
171
𝑡 = 10 𝑀𝑎𝑟𝑐ℎ 2011 − 28 𝐴𝑢𝑔 2011 April 30 12000 = 𝑋 1 + 0.08
360
May 31
𝑡 =? 𝑑𝑎𝑦𝑠 (𝐵𝑅 − 𝐸𝑇, 𝑂𝑆𝐼)
June 30 12000 = 𝑋 1.038
𝑟 = 8% 0.08 July 31
𝐗 = 𝐑𝐌𝟏𝟏𝟓𝟔𝟎. 𝟔𝟗
Aug 28
𝑺 = 𝑹𝑴𝟖𝟎𝟎𝟎 + 𝑹𝑴𝟒𝟎𝟎𝟎
𝑺 = 𝑹𝑴𝟏𝟐𝟎𝟎𝟎 TOTAL 171 days