Answer

Key – 6
General Mathematics SIMPLE & COMPOUND INTEREST

Solve for the indicated missing variable(s) (indicated by blank boxes) of the given items
(boxes with dashes (−) indicate that particular variable is unnecessary for the solution):

𝑃 𝑟 𝑡 𝑛 𝐴 𝐼
1 300, 000 4% 2 years − 324, 000 24, 000
2 50, 000 8% 5 years − 70, 000 20, 000
3 304, 761.90 2.5% 24 months − 320, 000 15, 239.10
4 350, 000 − − − 500, 000 150, 000
5 450, 000 1% 3 years Annual 463, 635.45 −
6 200, 000 2% 11.19 years Quarterly 250, 000 −
7 600, 000 5% 5.83 years Semi-Annual 800, 000 200, 000
8 600, 000 10.56% 40 weeks Quarterly 650, 000 −

4) 𝐴 = 500, 000
𝐼 = 150, 000

𝐴 = 𝑃 + 𝐼
500, 000 = 𝑃 + 150, 000
500, 000 − 150, 000 = 𝑃
350, 000 = 𝑃

6) 𝑃 = 200, 000
𝑟 = 2% = 0.02
𝑛 = 4
𝐴 = 250, 000

9 :<
𝐴 = 𝑃 81 + :;
=.=> (?)(<)
250, 000 = 200, 00 81 + ? ;
250, 000 = 200, 000(1.005)?<
1.25 = (1.005)?<
logE.==F 1.25 = 4𝑡
44.74 = 4𝑡
11.19 = 𝑡








8) 𝑃 = 600,000
?= E=
𝑡 = 40 weeks = F> year = EG year
𝑛 = 4
𝐴 = 650, 000

9 :<
𝐴 = 𝑃 81 + :;
HI
9 ?8HJ;
650, 000 = 600, 000 81 + ?;
KI
9 HJ
650, 000 = 600, 000 81 + ?;
KI
EG 9 HJ
E>
= 81 + ?
;
KI
EG E 9 HJ
8E>; = 81 + ?
;
HJ KI HJ
EG E8KI; 9 HJ8KI;
8E>; = 81 + ?;
HJ
EG KI 9 E
8E>; = 81 + ?;
9
1.0264 = 1 + ?
9
1.0264 − 1 = ?
9
0.0264 = ?
0.1056 = 𝑟
𝑟 = 10.56%

_________________________________________________________________________________________________________

Solve the given problems:

1) You’d like to purchase a home theatre set from your friend a year from now. The set
costs Php 80, 000 right now, but your friend said you can get it for half its price next
year. In the year that you have to wait until you buy the set, you decide to invest in a
bank that offers a simple interest per annum with a rate of 3%. How much should
you invest in the bank right now to have enough money to purchase the home
theatre set next year?

𝐴 = 40, 000
𝑟 = 3% = 0.03
𝑡 = 1

40, 000 = 𝑃L1 + (0.03)(1)M You would need to invest Php 38, 834.95
40, 000 = 𝑃(1.03) now to get an approximate Php 40, 000
?=,===
E.=G
= 𝑃 in a year’s time.
38, 834.95 = 𝑃
2) You’re trying to borrow money from your parents for your trip abroad next year for
when you graduate from high school. The trip costs approximately Php 50, 000
inclusive of a round-trip ticket, lodging, and pocket money. Each of your parents
offers you a different deal as given below:

Mom: 2% per annum simple interest payable in 3 years
Dad: 3% per annum simple interest payable in 2 years

Who offers a better deal, and why?

Mom: 𝑃 = 50, 000 Both offers/deals are
𝑟 = 2% = 0.02 the same, choosing
𝑡 = 3 either would require the
same total payable.
𝐴 = 50, 000L1 + (0.02)(3)M
𝐴 = 53, 000

Dad: 𝑃 = 50, 000
𝑟 = 3% = 0.03
𝑡 = 2

𝐴 = 50, 000L1 + (0.03)(2)M
𝐴 = 53, 000




















3) Two local banks offer varying deals for your investments. Bank A offers a simple
interest per annum that can give you a good 5% off your money, on the other hand,
Bank B offers an interest rate of 3% compounded quarterly.

If you had Php 300, 000 as of now and would like to withdraw your money in 4
years, which bank would you choose? Why?

Bank A: Simple Interest 𝐴 = 𝑃(1 + 𝑟𝑡)
𝑃 = 300, 000
𝑟 = 5% = 0.05
𝑡 = 4

𝐴 = 300, 000L1 + (0.05)(4)M
𝐴 = 360, 000

9 :<
Bank B: Compound Interest 𝐴 = 𝑃 81 + :;
𝑃 = 300, 000
𝑟 = 3% = 0.03
𝑡 = 4
𝑛 = 4

=.=G (?)(?)
𝐴 = 300, 000 81 + ? ;
𝐴 = 300, 000(1.0075)EN
𝐴 = 300, 000(1.2699)
𝐴 = 380, 970

It seems that Bank B is much better with an advantage of approximately Php 20, 970
over the total amount you can get from Bank A.