Exact Simple Interest And Ordinary/Approximate Simple Interest

EXACT SIMPLE INTEREST AND ORDINARY/APPROXIMATE SIMPLE INTEREST

Exact simple interest                                   –              the correct number of days for each month is used.                                                    

                                                                                       Thus, each year has 365 days. If the year is a leap year, it has 366 days.

Ordinary/Approximate simple interest     –             we assume each month has 30 days. Thus, each year  has 360 days.

Example 9

Calculate the four types of interest and maturity value as above for a RM4500 loan at an interest of 8%. The duration of the loan is from 5 July 2007 to 16 November 2007.

Exact Time

Ordinary/Approximate Time

Exact Time with Exact Simple Interest	Exact Time with Ordinary/Approximate Simple Interest
Ordinary/Approximate Time with Exact Simple Interest	Ordinary/Approximate Time with Ordinary/Approximate Simple Interest