1. CHAPTER 2 Interest and Money-Time Relationship Solved Supplementary Problems Problem 2.1 What is the annual rate of interest if P265 is earned in four months on an investment of P15, 000? Solution: Let ‘n’ be the number of interest periods. Thus, on the basis of 1 year (12 mo.), the interest period will be, Hence, the rate of interest given by the formula, i = , is computed as i = ( )( ) = 0.053 or 5.3% Thus, the annual rate of interest is 5.3% 2-2.A loan of P2, 000 is made for a period of 13 months, from January 1 to January 31 the following year, at a simple interest of 20%. What is the future amount is due at the end of the loan period? Solution: ( ) ( ) ( ) Answer: 2-3.If you borrow money from your friend with simple interest of 12%, find the present worth of P20, 000, which is due at the end of nine months. Given: Future worth: F = P20, 000 Number of interest period: n = Simple interest i = 12% Solution