SOLUTION: A man borrowed from a bank under a promissory note that he signed in the amount of P25,000 for a period of one year. He received only the amount of P21, 915 after the bank collecte
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Question 1204862: A man borrowed from a bank under a promissory note that he signed in the amount of P25,000 for a period of one year. He received only the amount of P21, 915 after the bank collected the advance interest and additional amount of P85 for notarial and inspection fees. What was the rate of interest that the bank collected in advance? Answer by ikleyn(52781) (Show Source):
You can put this solution on YOUR website! .
A man borrowed from a bank under a promissory note that he signed in the amount of P25,000
for a period of one year. He received only the amount of P21, 915 after the bank collected
the advance interest and additional amount of P85 for notarial and inspection fees.
What was the rate of interest that the bank collected in advance?
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It is VERY simple problem, as you will see after reading my solution.
The amount of P25000 - P21,915 = P3085 is the sum of the interest and "the notarial and inspection fees".
THEREFORE, the interest after one year is P3085 - P85 = P3000.
Now, the rate of interest is = = = 0.12 = 12%.
ANSWER. The rate of interest is 0.12, or 12%.
