## Monday, May 25, 2009

### [Mathematic Form 1] Simple Interest & Dividend

Simple interest is an additional amount of money given
• by the bank when you save money
• to the bank when you borrow money
Simple Interest = Interest Rate x Principal x Time

Eg:
1. Ahmad deposited RM3,000 in a bank for 3 years at an interest rate of 3.5% per annum. How much interest will Ahmad receive at the end of the period?

Simple Interest = Interest Rate x Principal x Time
= 3.5% x RM3,000 x 3
= (3.5/100) x RM3,000 x 3
= RM315

Hence, Ahmad will receive RM315 as interest at the end of the period.

2. Mak Limah borrowed RM50,000 from a bank. She has paid RM3,000 as simple interest for 3 years. Calculate the interest rate per annum paid by Mak Limah.

Interest Rate = [ Simple Interest / (Principal x Time) ] x 100%
= [ RM3,000 / (RM50,000 x 3) ] x 100%
= 2%

Hence, the interest rate paid by Mak Limah is at 2% per annum.

Dividend

Dividend: profit that is paid to a company's shareholders for their investment in the company.

Dividend = Rate of Dividend x Investment

Eg:
1. Danial bought RM28,000 worth of shares in a company and was given a dividend of 13%. Calculate the amount of dividend received by Danial.

Dividend = Rate of Dividend x Investment
= 13% x RM28,000
= (13/100) x RM28,000
= RM3,640

Danial will receive RM3,640 as dividend.

2. Anita bought 8,000 units of share at RM0.50 per unit. At the end of the year, she was paid a dividend of RM220. What is the rate of dividend given to her?

Investment = 8,000 x RM0.50 = RM4,000
Rate of Dividend = (RM220/RM4,000) x 100% = 5.5%

The rate of dividend given to Anita is 5.5%.