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Calculating Simple, Exact, and Ordinary Interest: Formulas and Examples, Study notes of Accounting

Marion Community Schools Tucker Career & TechnologyAccounting

Formulas and examples for calculating simple, exact, and ordinary interest. It includes step-by-step calculations for various principal amounts, interest rates, and time periods. Useful for students and professionals in finance and accounting.

Typology: Study notes

2021/2022

Uploaded on 09/12/2022

ekansh
ekansh 🇺🇸

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Formula: Interest = Principal * Rate * Time
1) Calculate simple interest.
Principal = $10,000
Rate = 8%
Time = 6 months
2) Calculate exact interest.
Principal = $15,000
Rate = 6%
Time = 280 days
3) Calculate ordinary interest.
Principal = $15,000
Rate = 6%
Time = 280 days
4) Calculate simple interest.
Principal = $8,700
Rate = 12%
Time = 2 years
5) Calculate the principal.
Simple interest = $50
Rate = 5%
Time = 1 month
6) Calculate the interest rate.
Principal = $10,000
Time = 18 months
Interest = $1,050
7) Calculate the time.
Principal = $7,500
Rate = 10%
Interest = $125
8)
Calculate final payoff.
Principal = $6,400
Rate = 6%
Time = 1 year
On the 30th day, $400 was paid, and on
the 70th day, $350 was paid. On the due
date of the loan, what was the payoff?
SUCCESS CENTER PRACTICE SHEET
Calculating Simple, Exact, and Ordinary Interest
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Download Calculating Simple, Exact, and Ordinary Interest: Formulas and Examples and more Study notes Accounting in PDF only on Docsity!

Formula: Interest = Principal * Rate * Time

  1. Calculate simple interest. Principal = $10, Rate = 8% Time = 6 months
  2. Calculate exact interest. Principal = $15, Rate = 6% Time = 280 days
  3. Calculate ordinary interest. Principal = $15, Rate = 6% Time = 280 days
  4. Calculate simple interest. Principal = $8, Rate = 12% Time = 2 years
  5. Calculate the principal. Simple interest = $ Rate = 5% Time = 1 month
  6. Calculate the interest rate. Principal = $10, Time = 18 months Interest = $1,
  7. Calculate the time. Principal = $7, Rate = 10% Interest = $
  8. Calculate final payoff. Principal = $6, Rate = 6% Time = 1 year On the 30th day, $400 was paid, and on the 70th day, $350 was paid. On the due date of the loan, what was the payoff?

SUCCESS CENTER PRACTICE SHEET

Calculating Simple, Exact, and Ordinary Interest

  1. Calculate simple interest. I = PRT Principal = $10,000 I = ($10,000)(.08)(6/ 12) Rate = 8% I = $ Time = 6 months
  2. Calculate exact interest. I = PRT Principal = $15,000 I = ($15,000)(.06)(280/ 365 ) Rate = 6% I = $690. Time = 280 days
  3. Calculate ordinary interest. I = PRT Principal = $15,000 I = ($15,000)(.06)(280/ 360 ) Rate = 6% I = $ Time = 280 days
  4. Calculate simple interest. I = PRT Principal = $8,700 I = ($8,700)(.12)(2) Rate = 12% I = $2, Time = 2 years
  5. Calculate the principal. I = PRT Simple interest = $50 $50 = P(.05)(1/12) Rate = 5% P = $12, Time = 1 month
  6. Calculate the interest rate. I = PRT Principal = $10,000 $1,050 = (10,000)R(18/12) Time = 18 months R =. Simple interest = $1,050 R = 7%
  7. Calculate the time. I = PRT Principal = $7,500 $125 = ($7,500)(.10)T Rate = 10% Simple interest = $ I = PRT
  8. Calculate the final payoff. I = ($6,400)(.06)(30/360) Principal = $6,400 I = $ Rate = 6% 1st payment $400 - 32 = $ Time = 1 year Principal $6,400 - 368 = $6, On the 30th day, $400 was paid, and on I = ($6,032)(.06)(40/360) the 70th day, $350 was paid. On the due I = $40. date of the loan, what was the payoff? 2nd payment $350 - 40.21 = $309. Principal $6,032 - 309.79 = $5,722. 360 - 70 = 290 I = ($5,722.21)(.06)(290/360) I = $276. Payoff $5,722.21 + 276.57 = $5,998.