14

Additional Examples

Loans

Simple Annual Interest

See appendix F for RPN keystrokes for this example.

Example: Simple Interest at an Annual Rate. Your good friend needs a loan to start her latest enterprise and has requested that you lend her $450 for 60 days. You lend her the money at 7% simple annual interest, to be calculated on a 365-day basis. How much interest will she owe you in 60 days, and what is the total amount owed?

60 days

The interest is: (7% of $450)

365 days

vKeys:

Display:

Description:

450 *7 %

 

Annual interest.

*60 /365

Actual interest for 60

+



days.

450 =



Add principal to get total

 

 

debt

A Solver Equation for Simple Annual Interest:



DEBT = the total owed at the end of the loan period.

LOAN = the original amount (principal) lent.

I% = the annual interest rate as a percent.

DAYS = the number of days in the loan.

190 14: Additional Examples

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