Professional Documents
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ACTUAL TIME
Uses the exact number of days in every specific month (Table 1.1)
Steps in determining the actual time:
a. Identify the number of days remaining in the first month by subtracting the loan date
from the number of days in that month
b. Write the number of days in each month
c. Write the number of days in the last month
d. Add the days from the first month to the last month
Table 1.1. Number of Days in Each Month
Month
No. of Days
Month
No. of Days
January
31
July
31
February
28
August
31
March
31
September
30
April
30
October
31
May
31
November
30
June
30
December
31
Note: if it is a leap year, February will have 29 days
Actual no of days in a year = 365 days
Example:
1. Find the actual and approximate time between:
a. June 7, 2013 and October 27, 2013
b. January 10, 2012 and April 24, 2012
Solution:
a. June 7, 2013 and October 27, 2013
Month
Actual time
Approximate
time
June (30 7)
July
August
September
October
Total
23
31
31
30
27
142 days
23
30
30
30
27
140 days
b.
Actual
time
Approximate
time
January (3110)
February
March
April
Total
21
20 (30-10)
29
31
24
105 days
30
30
24
104 days
Actual time
18
31
30
31
31
28
31
17
217 days
Approx. time
18
30
30
30
30
30
30
17
215 days
Actual time
23
30
31
30
31
365
365
366
31
28
31
30
31
30
31
31
30
31
30
8
1583 days
Approx. time
22
30
30
30
30
360
360
360
30
30
30
30
30
30
30
30
30
30
30
8
1560 days
TYPES OF INTEREST
1. EXACT INTEREST
Computed in a 365 days in a year as the time factor denominator
Formula: Time = number of days of a loan/ 365 days
2.
ORDINARY INTEREST
Type of interest wherein the number of days is computed based on 360 days in a year
Formula: Time = number of days of a loan / 360 days
August ( 31 6)
September
October
Total days
Actual time
25
30
5
60 days
I = Prt
= P80,000 (.10) (60 /360)
= P80,000 (.10) (0.166666666)
I = P1,333.33
2.
Approx time
24
30
6
60 days
F=P+I
= P80,000 + P1,333.33
F = P81,333.33
Determine the exact and ordinary interest on P14,000 at 13% from January 9, 2009 to June 24 of the same
year using actual and approximate time.
Given: P = P14,000
r =13%
t = Jan. 9 June 24, 2009
Months
January
February
March
April
May
June
Total no of days
a.
Actual time
22
28
31
30
31
24
166
Approx time
21
30
30
30
30
24
165
3.
b.
c.
d.
**Bankers rule
Find the exact and ordinary interest on P15,300 at 8 % from December 3, 2008 to June 24, 2009 using
actual and approximate time.
Given: P = P15,300
t = Dec. 3, 2008 June 24, 2009
r = 8.5%
Months
2008: December
2009: January
February
March
April
May
June
Total no of days
Actual time
28
31
28
31
30
31
24
203
Approx time
27
30
30
30
30
30
24
201
a.
b.
c.
**Bankers rule
d.
ASSIGNMENT: ANSWER THE FOLLOWING: (WRITE ANSWERS AND SOLUTIONS IN A YELLOW PAPER)
A. Time between two dates
1. Find the time, in days of each of the following notes using actual time:
a. February 14, 2009 to July 7, 2009
b. December 25, 2009 to August 1, 2010
2. Find the time, in days of each of the following notes using approximate time:
a. January 1, 2009 to December 30, 2009
b. October 23, 2009 to May 25, 2010
3. Find the due dates of each of the following notes using actual time:
Date of Loan
Time
a. April 9, 2009
45 days
b. December 30, 2009
60 days
4. Find the due dates of each of the following notes using approximate time:
Date of Loan
Time
a. May 1, 2009
9 months
b. November 1, 2009
13 months
5. Find the actual and approximate time between the two dates:
a. January 20, 2009 to September 14, 2009
b. December 8, 2009 to July 7, 2010
B.
1.
2.