Mr J Dela Cruz borrowed money from the bank He received from

Mr. J. Dela Cruz borrowed money from the bank. He received from thebank P1,342.00 and promised to pay P1,500.00 at the end of 9 months.

Determine the simple interest rate and the corresponding discount rate or often referred to as the \"Banker\'s discount.\" ANS 11.7 %, 10.53%

(Please show working equations, Thanks! :)

Solution

Simple interest rate = Interest/Principle*100 = (1500-1342)/1342*100 = 158/1342*100 = 11.77%

Banker\'s discount is the S.I. on the face value for the period from the date on which the bill was discounted and the legally due date.

It is = (1500-1342)/1500*100 = 158/1500*100 = 10.53%