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Homework answers / question archive / The maturity value of a 15-month loan of PHP21, 000

The maturity value of a 15-month loan of PHP21, 000

Finance

The maturity value of a 15-month loan of PHP21, 000.00 is PHP22, 904.00. What is the simple interest rate? 
 

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Computation of Simple Interest Rate:

Interest = Maturity Value - Principal

= 22,904 - 21,000

Interest = 1,904

 

Interest = Principal*Rate*Time

1,904 = 21,000*Rate*15 / 12

1,904 = 26,250*Rate

Rate = 1,904/26,250

Rate = 7.25%

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