Simple Discount - Sharp EL-738 Notes

3.2. INTEREST RATES
• Determine the simple interest rate if R3 600 accumulates to R5 760 in five years' time.
The simple interest rate is 12%.
Key in as
( 5 760 ÷ 3 600 − 1 )
The answer is 0,12, that is, 12%.
3.2.2

Simple discount

• Determine the present value of a promissory note that is worth R2 500 15 months later,
and the applicable discount rate is 10,24% per year.
The present value is R2 180,00.
Key in as
2 500 ( 1 − 0.1024 × 15 ÷ 12 =
The answer is 2 180,00.
• Determine the time under consideration (in months) if a simple interest rate of 11,76%
is equivalent to a 10,25% simple discount rate.
S = P (1 + rt)
5 760 = 3 600 (1 + r × 5)
5 760
1 + 5r =
3 600
5 760
− 1
5r =
3 600
5 760
r =
3 600
= 0,12
÷ 5 =
P = S (1 − dt)
P = S (1 − dt)
P = 2 500 1 − 0,1024 ×
= 2 180,00
23
− 1 ÷ 5
15
12