Lesson Plan in General Mathematics 11

October 8-12 2018

I. Content/Topic: Basic Business Mathematics

a. Simple Interest

II. Content Standard: The Learners demonstrate understanding of key concepts of simple and
compound interests, and simple and general annuities.

III. Performance Standard: The learners should be able to investigate, analyze and solve
problems involving simple and compound interests and simple and general annuities using
appropriate business and financial instruments.

IV. Learning Competencies/ Objectives:

1. Illustrates simple interest
2. Computes interest, maturity value, future value and present value in simple interest
3. Solves problems involving simple interest

V. Learning Resources:
 Senior High School Teaching Guide
file:///H:/Exam%20and%20Lp%20for%20August/SHS%20TG%20-
%20General%20Mathematics.pdf
 Senior High School General Mathematics
Instructional Materials:
 Charts
 Printed papers

VI. Procedure
A. Introduction:

What are some ways to take care of hard-earned money?

B. Motivation:

Explore!
Suppose you won ₱10, 000 and you plan to invest it for 5 years. A
cooperative group offers 2% simple interest rate per year. What will be your money
after 5 years?
C. Presentation:
Depositing money in a bank in return they pay interest. By contrast, borrowing money
from banks or lending institutions requires payment of interest. Hence, money has present and
future values.
D. During the Lesson
Definition of Terms
 Lender or creditor – person (or institution) who invests the money or makes the funds
available.
 Borrower or debtor – person (or institution) who owes the money or avails of the funds
from the lender
 Origin or loan date – date on which money is received by the borrower
 Repayment date or maturity date – date on which the money borrowed or loan is to be
completely repaid
 Time or term (t) – amount of time in years the money is borrowed or invested; length of
time between the origin and maturity dates
 Principal (P) – amount of money borrowed or invested on the origin date
 Rate (r) – annual rate, usually in percent, charged by the lender, or rate of increase of the
investment
 Interest (I) – amount paid or earned for the use of money
 Simple Interest (𝐼𝑠 ) – interest that is computed on the principal and then added to it
Annual Simple Interest
𝐼𝑠 = 𝑃𝑟𝑡

where 𝐼𝑠 = 𝑠𝑖𝑚𝑝𝑙𝑒 𝑖𝑛𝑡𝑒𝑟𝑒𝑠𝑡

𝑃 = 𝑝𝑟𝑖𝑛𝑐𝑖𝑝𝑎𝑙
𝑟 = 𝑟𝑎𝑡𝑒
𝑡 = 𝑡𝑒𝑟𝑚 𝑜𝑟 𝑡𝑖𝑚𝑒 𝑖𝑛 𝑦𝑒𝑎𝑟𝑠
The maturity value is given by the formula
𝐹 =𝑃+𝐼

and since I =Prt,

𝐹 =𝑃+𝐼
= 𝑃 + 𝑃𝑟𝑡
= 𝑃(1 + 𝑟𝑡)
We also refer to F as a future value, received at the end of the term. In this context, we
say that the principal P is the present value of F.
Derived Formulas: These formulas were all derived from 𝐼 = 𝑃𝑟𝑡 and 𝐹 = 𝑃(1 + 𝑟𝑡).

𝐼 𝐼 𝐼 𝐹
𝑃= 𝑡= 𝑟= 𝑃=
𝑟𝑡 𝑃𝑟 𝑃𝑡 1+𝑟𝑡

All about Time!

Keep in mind that the term t is expressed in years in the formulas. If the given term is in
months, days, or even between two dates, you need to do some conversions.
𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑚𝑜𝑛𝑡ℎ𝑠
1. If t given in months, then 𝑡 = 12
𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑑𝑎𝑦𝑠
2. If t is given in days, then 𝑡 = 365 𝑜𝑟 360
3. If the time is given between two dates, we count each day, excluding the origin date within the
term.
𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑚𝑜𝑛𝑡ℎ𝑠
4. If the dates coincide, we count by months. Hence, in this case, 𝑡 =
12
E. Deepening Session:

Example 1: A bank offers 0.25% annual simple interest rate for a particular deposit. How
much interest will be earned if 1 million pesos is deposited in this average account for 1 year?

Solution:
Given: P = 1, 000, 000
r =0.25% = 0.0025
t = 1 year
𝐼𝑠 = 𝑃𝑟𝑡
𝐼𝑠 = (1, 000, 000)(0.0025)(1)
𝐼𝑠 = 2, 500
Example 2: What is the maturity value of a 400, 000-peso debt payable in 2 years at
1
8 4 %?
1
Solution: The maturity value is F. ₱400, 000 is P, 2 years is t, and 8 4 % or 0.0825 is r.
substituting these values in 𝐹 = 𝑃(1 + 𝑟𝑡) gives
𝐹 = 𝑃(1 + 𝑟𝑡)
𝐹 = 400, 000(1 + (0.0825 )(2)).
= ₱466, 000

Example 3: a 3-year investment had a maturity value of ₱642, 500. If simple interest was
applied at a rate of 9.5%, what was the principal?

Solution: You are being asked to determine the principal P which corresponds to F =
642, 000. With t = 3 and r = 0.095, we have
𝐼
𝑃=
𝑟𝑡
642, 000
𝑃=
1 + (0.095)(3)
𝑃 = ₱500, 000
Example 4: At what simple interest rate was ₱312, 000 invested if it earned an interest of
₱24, 102 just after 1.5 years?

Solution: We are looking for the simple interest rate r. The problem gives us P = 312,
000, I = 24, 102 and t = 1.5.
We now have
𝐼
𝑟=
𝑃𝑡
24, 102
𝑟=
(312, 000)(1.5)
𝑟 = 5.15%

Example 5: How long will it take a ₱400, 000 debts to earn an interest of ₱25, 000 if the
simple interest being charged is 8%?
 Solution: We are looking for the length of the term t given P=400, 000, I=25, 000 and
r=0.08.
𝐼
𝑡=
𝑃𝑟
25,000
𝑡=
(400,000)(0.08)
𝑡 = 0.78 𝑦𝑒𝑎𝑟
Example 6: How much is the maturity value if ₱100, 000 is placed in an account earning
9.25% simple interest for 18 months?

Solution: It is F that you need to calculate. The given values are P=100, 000, r=0.0925
18
and t=12. Substituting in the formula for F, we have 𝐹 = 𝑃(1 + 𝑟𝑡)
18
𝐹 = 100, 000 [1 + (0.0925)(12)]
𝐹 = ₱113, 875

F. Generalization

G. Application:
Direction: Find the unknown principal P, rate r, time t, and interest I by completing the
table.
Principal (P) Rate (r) Time (t) Interest (I)
10, 000 8% 15 (1)
(2) 2% 5 10, 000
360, 000 (3) 2 3, 600
500, 000 10.5% (4) 175, 500
880, 000 9.25% 2.5 (5)

H. Enrichment:

Direction: Solve the following problems on simple interest.

1. What are the amounts of interest and maturity value of a loan for ₱150, 000 at 6 ½ %
simple interest for 3 years?
2. At what simple interest rates per annum will ₱25, 000 accumulate to ₱33, 000 in 5 years?
3. How long will ₱40,000 amount to ₱51, 200 if the simple interest rate is at 12% per
annum?
4. In order to have ₱200,000 in 3 years, how should you invest if the simple interest is
5.5%?
5. Angel deposited ₱20,000 in a bank that pays 0.5% simple interest. How much will be her
money after 6 years?
I. Evaluation:
A. Direction: Match the terms in column A with the correct definitions in Column B. You
may choose more than one answer from Column B.
Column A Column B
1. Principal A. Time money is borrowed
2. Term B. Amount paid or earned for the use of
money
3. Interest C. Percentage of increase of investment
4. Maturity Value D. Amount of money borrowed or
invested
5. Interest rate E. Amount added by the lender, to be
received on repayment date
F. Amount received on repayment date

B. Direction: Solve the given problem.

1. Ria lends ₱50,000 to Kim on October 1, 2015. She expects Kim to pay the principal and
simple interest at 9% to fully settle the debt on March 28, 2016. What amount does Ria
receive?

IV. Assignment/Agreement:
Direction: Research and do an advance reading about Compound Interest. Get 2
examples about it and put it in your notebook.