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# MOI LESSON 1

## TIME BETWEEN TWO DATES

To find interest, whether it is on deposit or on loan, the time should always be expressed un years.
There will be no problem if time is expressed in years
However, there are some cases wherein we must be the ones to determine the time.
Therefore, we must have an agreement in finding the time to be considered in the transaction, especially
if the time to be determined is between two dates.
HOW TO FIND TIME BETWEEN TWO DATES
A. APPROXIMATE TIME
Uses 30 days in every month
Approximate no. of days in a year = 360 days
B.

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.

Month

Actual
time

Approximate
time

January (3110)
February
March
April
Total

21

20 (30-10)

29
31
24
105 days

30
30
24
104 days

## ENRICHMENT EXERCISE 1.3A (p.6)

1. Find the actual and approximate time from Sept.12, 2008 to April 17, 2009
2. Determine the actual and approximate time from August 8, 2005 to December 8, 2009
Solutions:
1. actual and approximate time from Sept.12, 2008 to April 17, 2009
Month/year
2008: Sept.
Oct
Nov
Dec
2009: Jan
Feb
March
April
Total
2.

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 and approximate time from August 8, 2005 to December 8, 2009

Month/year
2005: August
Sept.
Oct
Nov
Dec
2006: Jan-Dec
2007: Jan-Dec
2008: Jan-Dec
2009: Jan
Feb
March
April
May
June
July
August
Sept.
Oct
Nov
Dec
Total

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

## BANKERS RULE = or ordinary interest in exact time

Used if the type of interest is not specified
Formula: exact time / 360 days
ENRICHMENT EXERCISE 1.3B, p. 8
1. On August 6, Gabby went to the MSS Bank and took out a loan for P80,000 at 10% ordinary interest for 60
days. What is the maturity value and the maturity date of this loan?
(Note: Use Bankers rule: ordinary interest on actual time)
Given: P = P80,000
F =?
r = 10%
Maturity date = ?
October 5, same year
t = 60 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

## Exact interest, actual time. t = 166 days

I = Prt
= P14,000 (.13) (166/365)
= P14,000 (.13) (0.45479452)
I = P 827.73

Approx time
21
30
30
30
30
24
165

3.

b.

## Exact interest, approximate time; t = 165 days

I = Prt
= P14,000 (.13) (165/365)
= P14,000 (.13) (0.452054794)
I = P 822.74

c.

## Ordinary interest, actual time; t = 166 days

I = Prt
= P14,000 (.13) (166/360)
= P14,000 (.13) (0.461111111)
I = P 839.22

d.

## Ordinary interest, approximate time; t = 165 days

I = Prt
= P14,000 (.13) (165/360)
= P14,000 (.13) (0.458333333)
I = P 834.67

**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.

## Exact interest, actual time. t = 203 days

I = Prt
= P15,300 (.085) (203/365)
= P15,300 (.085) (0.556164383)
I = P 723.29

b.

## Exact interest, approximate time; t = 201 days

I = Prt
= P15,300 (.085) (201/365)
= P15,300 (.085) (0.550684931)
I = P 716.17

c.

## Ordinary interest, actual time; t = 203 days

I = Prt
== P15,300 (.085) (203/360)
= P15,300 (.085) (0.563888888)
I = P 733.34

**Bankers rule

d.

## Ordinary interest, approximate time; t = 201 days

I = Prt
== P15,300 (.085) (201/360)
= P15,300 (.085) (0.558333333)
I = P 726.11

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.

## Exact and Ordinary Interest

Determine the exact and ordinary interest on P9,250 at 19% from February 14, 2010 to May 17, of the
same year using actual and approximate time
How much exact and ordinary simple interest should Audrey pay for loan at P7,300 at 14% borrowed in
October 23, 2009 if she promised to pay everything on March 16, 2010 using actual and approximate
time?