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Genmath11 q2 Mod2 Interest Maturity Future Present Value
Genmath11 q2 Mod2 Interest Maturity Future Present Value
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General Mathematics
Quarter 2 – Module 2:
Interest, Maturity Value, Future Value, and
Present Value in Simple and Compound
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Republic Act 8293, section 176 states that: No copyright shall subsist in any work
of the Government of the Philippines. However, prior approval of the government agency or
office wherein the work is created shall be necessary for exploitation of such work for profit.
Such agency or office may, among other things, impose as a condition the payment of
royalties.
Borrowed materials (i.e., songs, stories, poems, pictures, photos, brand names,
trademarks, etc.) included in this module are owned by their respective copyright holders.
Every effort has been exerted to locate and seek permission to use these materials from
their respective copyright owners. The publisher and authors do not represent nor claim
ownership over them.
Team Leaders:
School Head : Omar G. Magcalas
LRMDS Coordinator : Cherryl D. Cordova
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General Mathematics
Quarter 2 – Module 2:
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Introductory Message
For the facilitator:
Welcome to the General Mathematics – Grade 11 Alternative Delivery Mode (ADM)
Module on Interest, Maturity Value, Future Value, and Present Value in Simple and
Compound Interest!
This module was collaboratively designed, developed, and reviewed by educators
both from public and private institutions to assist you, the teacher, or facilitator in
helping the learners meet the standards set by the K to 12 Curriculum while
overcoming their personal, social, and economic constraints in schooling.
This learning resource hopes to engage the learners in guided and independent
learning activities at their own pace and time. Furthermore, this also aims to help
learners acquire the needed 21st-century skills while taking into consideration
their needs and circumstances.
In addition to the material in the main text, you will also see this box in the body of
the module:
As a facilitator you are expected to orient the learners on how to use this module.
You also need to keep track of the learners' progress while allowing them to
manage their own learning. Furthermore, you are expected to encourage and assist
the learners as they do the tasks included in the module.
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What I Need to Know This will give you an idea of the skills or
competencies you are expected to learn in
the module.
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What I Know
Before dealing with the lessons of this module, try to measure your prior knowledge
about Interest.
Direction: Write the letter of the correct answer on the space provided before each
number.
1. Determine the simple interest that Pia Catriona needed to pay if she borrowed
Php2, 345 at 3 1/5 % for10 months.
A. Php26.35 B. Php67.25 C. Php62.53 D. 65.32
2. How much Cardo Dalisay borrowed if the interest he paid after 9 months at
12.25% simple interest is Php 2,468?
A. Php 28, 266.59 B. Php 26, 268.95
C. Php 22, 686.95 D. Php 26, 862.59
3. What is the interest rate did Ahmad receive, after investing the amount of Php
24, 500.00 which earned a simple interest of Php 4, 545.00 after 3.5 years?
A. 3.5% B. 4.5% C. 5.3% D. 5.5%
4. How long should it takes if Maria Linda invests the amount of Php 85, 430.00 to
earn an interest of Php 5, 555.00 at 3 1/4 % simple interest?
A. 1.5 years B. 2 years C. 2.5 years D. 3 years
5. How much is the total amount should Mrs. Soriano receives, if she will invest
Php 123,450.00 for 3.25 years at 2 3/4 % simple interest?
A. Php 134, 483.34 B. Php 143, 384.34
C. Php 144, 834.43 D. Php 148, 343.43
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Borrowing and lending are two sides of the same transaction. To the lender, the
loan represents an investment in a debt obligation. The interest charged provides
income form the investment. The rate of return on the investment is equal to the
rate of interest charged to the customer.
Since borrowing and lending are so central to our daily lives and in the economic
system, it is essential to familiarize with the definition of terms and learn the
computation of interest in borrowing/lending transactions.
What’s In
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What’s New
DIRECTION:
Solve the worded problem analytically. Match the appropriate letter that
corresponds to your answer in each item. Write it on the space provided
inside the box.
COLUMN A COLUMN B
1. Danica invested Php50, 000, and was offered an interest rate a. Php9, 800
of 3% a year. How much will she earn in a year?
2. Jeff was convinced by his friend to invest in his company. His b. Php12, 500
investment in his friend’s company will earn a simple interest
rate of 5% per year. If Jeff decided to invest Php250, 000 for
5 years, how much interest will he get?
3. Debbie invested Php100, 000, and earned an interest rate of c. Php2, 500
1% per annum. How much will she earn in 2 years?
4. Ronda invested Php50, 000 with an interest rate of 5% a year. d. Php62, 000
How much will he earn in a year?
5. Annaliza wants to put her savings in a trust fund with a e. Php1, 500
simple interest rate of 2% a year. If she decides to invest
Php500, 000 for 3 years, how much interest will she earn?
6.Francisca invested Php150, 000 with an interest rate of 10% a f. Php62, 500
year. How much will she earn in a year?
g. Php5, 000
h. Php30, 000
i. Php15, 000
j. Php2, 000
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What is It
Simple Interest (Is) is the amount paid for the borrowed money or the amount earned for the
deposited or invested money. It is calculated as a percentage of the original
amount borrowed or deposited over a period of time.
Where
I = interest
P = principal or the original amount borrowed or deposited
r = percentage rate of interest
t = term or period or length of borrowing time until payment
You may now work on the following examples to illustrate the application of the
above.
Example 1: Solution:
Mary Anthonette borrows Php 10, 000.00 a. P = Php10, 000.00
at 10.25% interest rate a year. b. r = 10.25% or 0.1025
a. What is the principal (P)? c. t = 1 year
b. What is the interest rate (r)? d. Substituting the values in the given
c. What is the time or borrowing period formula
(t)? I = Prt= (10, 000)(0.1025)(1)
d. What is the interest after a year? = Php 1, 025.00
Example 2: Solution:
Kara Mia deposits Php111, 110.00 in her bank I = Prt= (111, 110)(0.052)(5.25)
account at 5 1/5% interest rate. How much = (111, 110)(0.273)
interest will she earn in 5.25 years? = Php 30, 333.03
Given: P = 111,110
r = 5 1/5% = 5.2% or 0.052
t = 5.25 years
Find:I
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Example 3: Solution:
Find the interest paid by Kathryn Nadine I = Prt
on Php150, 150.00 that she borrowed for = (150,150) (0.0175)(3.75)
three years and 9 months at 1 3/4 % = (150,150) (0.065625)
simple interest. = Php9, 853.59
Given:
P = 150, 150
r = 1 3/4% or 1.75% or 0.0175
t = 3 years and 9 months = 3 9/12= 3.75
years
Find: I
Example 4: Solution:
If Sahaya borrowed Php125, 500.00 at an Prt= (125,500)(0.0775)(3.5)
annual simple interest rate of 7 3/4 % for = (125,500)(0.27125)
42 months, how much interest should she = Php 34,041.88
pay?
Given:
P = 125, 500
r = 7 3/4 % 7.75% or 0.0775
t = 42 months
= 3.5 years
Find: I
Note:
When the term is expressed in a month (m), convert in year(s) by t= m/12
ENHANCEMENT EXERCISE 1:
Answer each of the following worded problems. Compute for the
unknown then label your final answer properly.
1. Mrs. Batungbakal gave a Php100, 000.00 to Mrs. Macaspac at 18%. How much
was the interest after 45 days?
2. How much interest interest will be paid by Mr. Tom McKey, if he borrowed
Php515, 515 at 3.25% after 8 months?
3. Cory Kong deposited Php202, 020 at a rural bank in Tayug and she is paying
1.5%per annum simple interest. How much interest will she earn after 2 years
and 6 months?
When the time period of a loan reaches its maturity date, the loan is said to
mature. In that period, the borrower repays the principal and the interest. The total
repayment is known as the maturity value (or future value).
F=P+I
= P + Prt
= P (1+rt) < by factoring >
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Where
P = principal
r = interest rate (convert to decimal)
t = time (in years)
Note:
Although maturity value and future value mean the same thing, maturity
value is used for loans while future value is for invested or saved money.
While principal and present value mean the same thing also, principal is
usually used for loans while present value is for invested or saved money.
Example 1:
Find the maturity (future) value:
Principal (P) Rate (r) Time (t) Maturity Value (F)
Php12, 345 2.15% 1.25 years (a)
Solution:
a. F = P (1 + rt )
= 12, 345 [(1 + (0.0215) (1.25)]
= 12, 345 (1 + 0.026875)
= 12, 345 (1.026875)
= Php12, 676.77
b. F = P (1 + rt)
= 67, 890 [(1 + (0.001) (2.75)] 2 years and 9 mos. = 2 ¾ years
= 67, 890 (1 + 0.00275) = 2. 75
= 67, 890 (1.00275)
= Php68, 076.70
Example 2:
How much should Lizzy Mae pay for a Php10, 000.00 loan, if charged at 16.5% at the end of 1
year and 6 months?
Given: Solution:
P = 10, 000 F = P (1 + rt )
r = 16.5% = 0.165 = (10, 000) [1+ (0.165)(1.5)]
t = 1 year and 6 months = (10, 000)(1 + 0.2475)
= 1 6/12 = (10, 000)(1.2475)
= 1.5 years = Php12, 475.00
Find: F
Example 3:
Six years and nine months ago, Bianca borrowed Php25, 000 from Bernadette with
the promise that Bianca will pay Bernadette the principal amount plus
accumulated interest at 9 5/8% simple interest now. What amount is due?
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Given: Solution:
P = 25, 000 F = P (1 + rt)
r = 9 5/8% =9.625% = 0.09625 = (25, 000) [1+ (0.09625)(6.75)]
t = 6 years and 9 months = 6 9/12 = 6.75 years = (25, 000)(1 + 0.6496875)
Find: F = (25, 000)(1.6496875)
= Php41, 242.19
ENHANCEMENT EXERCISE 2:
Solve the following problems with complete solution.
2. Jamaica Rimorin invested the amount of Php100, 000 in a bank that offers 15
1/2% per annum simple interest. How much will she earned after 90 days?
3. Reuben’s mother borrowed Php35, 000 to fix their car. The bank charges 5%
interest for two years. What is the total amount that his mother will owe the
bank?
3.3 Finding the Present Value, Rate and Time in Simple Interest
From the formula F = P (1 + rt), we can also be derived other equations. Using the
Golden Rule of Equations, we will arrive with the following formulas:
P = F / (1 + rt)
Take the following examples for you to understand the application of the above
formulas.
Example 1:
Complete the table below by solving for the unknown.
F P r t
Php12, 345 (a) 1.05% 51 months
Php246, 810 Php151,515 (b) 9 years and 9 months
Php3, 691, 215 Php1,234,560 12 3/20% (c)
Solution:
a. P= F / (1+rt) = 12, 345 / [1 + .0105(4.25)]= 12, 345 / 1.004625
=Php11, 817.64
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Example 2:
Marvin and Alyssa Marie want to invest now in preparation for their daughter’s
debut. Hence, they want to have Php150, 000.00 after 10 years. How much should
they invest at an investment paying 15% for 5years?
Given: Solution:
F = 150, 000 P= F / (1+rt)
r = 15% = 0.15 =150, 000 / [1+(0.15)(5)]
t = 5 years = 150, 000/ (1+0.75)
Find: P = 150, 000 / 1.75
= Php85, 714.29
Example 3:
At what rate will the amount of Php20, 000 investment yields Php85, 000 in15
years at simple interest?
Given: Solution:
F = 85, 000 r = (F-P) / Pt
P = 20, 000 = (85,000-20, 000) / (20, 000)(15)
t = 15 years = 65, 000 / 300, 000
Find: r = 0.22 or 22%
Example 4:
How long will an investment of Php543, 200 yields Php876, 500 at simple interest
rate of 5% annually?
Given: Solution:
P= 543, 200 t = (F-P) / Pr
F= 876, 500 = (867, 500 – 543, 200) / (543, 200)(0.05)
r= 5% = 0.05 = 333, 300 / 27, 160
Find: t=? = 12.27 years
ENHANCEMENT EXERCISE 3:
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The time interval between succeeding interest calculations is called the conversion
period or compounding period. The interest earned during a period is “converted” to
principal at the end of the period because the principal and the interest are
combined and treated as the new principal for the succeeding period. The effect
of converting interest to principal is that the interest earned in a period will also earned
interest in all succeeding periods. The resulting value is called maturity (future) value and
is designated by F. The formula for maturity (future) value is–
F = P (1 + r) t
Where
F = maturity (future) value
P = principal or original amount of money
r = interest rate
t = term or number of years
Example 1:
Find the maturity value and compound interest on the principal Php30, 000 if
borrowed at 4.5% compounded annually for 3 years.
Given: Solution:
P = 30,000 F = P (1 + r)t
r = 4.5% = 0.045 = 30, 000 (1 + 0.045)3
t = 3 years = 30, 000 (1.045)3= 30, 000 (1.141166125)
Find: F and Ic Ic = Php 34, 234.98– 30, 000= Php 4, 234.98
Example 2:
How much money will you have in a bank after 5 years, when your mother
deposited Php15, 000 at an annual interest rate of 1 ¼ % compounded yearly?
Given: Solution:
P = 15, 000 F = P (1 + r)t
r = 1 ¼ % = 1.25% = 0.0125 = 15, 000 (1 + 0.0125)3
t = 5 years = 15, 000 (1.0125)3
Find: F = 15, 000 (1.037970703)
= Php15, 569.56
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Example 3.
Bryan Bagunas invested Php 123, 450.00 in a bank at 2 ¾ %compounded annually
for 69 months.
Find: Solution:
a. maturity (future) value F = P (1 + r)t
b. compound interest = 123, 450 (1 + 0.0275)5.75
= 123, 450 (1.0275)5.75
Given: = 123, 450 (1.168814325)
P = 123, 450 = Php 144, 290.13
r = 2 ¾ % = 2.75 % = 0.0275
t = 69 months = 69/12 = 5.75 years Ic= F–P= 144, 290.13 - 123, 450
Find: F and Ic = Php20, 840.13
ENHANCEMENT EXERCISE 4:
From the formula, F = P (1 + r) t, you can derive the formula in finding the present
value.
Take F = P (1 + r) t then
P = F / (1+r) t
Example 1:
Find the present value of Php34, 500.00 due in 3 years and 3months, if money is
worth 3.45% compounded annually?
Given: Solution:
F = 34, 500 P = F / (1+r) t
t = 3 years and 3 months 3 = 3 3/12 = 3.25 years = 34, 500 / (1 + 0.0345) 3.25
r = 3.45% or 0.0345 = 34, 500 / (1.0345) 3.25
Find: P = 34, 500 / 1.116539544
= Php30, 899.04
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Example 2:
How much Manilyn should put in a time deposit in a bank that pays 2.15% compounded
annually so that she will have Php876, 500 after 81months?
Given: Solution:
r = 2.15% or 0.0215 P = F / (1+r) t
F = 876, 500 = 876, 500 / (1+0.0215)6.75
t = 81 months = 81/12 = 6.75 years = 876, 500 / (1.0215)6.75
Find: P = 876, 500 / 1.15440714
= Php759, 264.19
ENHANCEMENT EXERCISE 5
Solve the following problems with complete solution.
1. How much money must be invested to obtain the amount of Php757, 575 in 7
years and 6 months if money earns 5.25% compounded annually?
2. Keifer Ravena wants his investment grows to Php696, 969 in 6 years and 9
months. How much should he invest in his account that pays 6.9%compounded
annually?
3. How much Ramil de Jesus must be deposited in a bank that offers 6 3/5 %
compounded annually so that after 69 months, he will have Php909, 090?
The formula for the total number of conversion periods for the whole term is–
n= mt
Where:
n = total number of conversion periods for the whole term
m = number of conversion periods per year
t = time period (term) of the loan or investment
The interest rate (im) is usually expressed as an annual or yearly rate, and must be
changed to the interest rate per conversion period or periodic rate (j). The formula
to be used is –
j= im / m
Where:
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The maturity (future) value, compounding m times a year can be computed using the
formula –
Where:
F= P (+j) n F = maturity (future) value
P = principal
F= P ( 1 + im/m) mt
im= nominal rate of interest (annual
rate)
m = frequency of conversion
t = term/time in years
Let us take the following examples for the application of the above formula.
Example 1:
Find the maturity value of Php565, 565 invested for 2 years and 6 months
at 5.25% compounded quarterly.
Given:
P = 565, 565
t = 2 years and 6 months= 2 6/12 = 2.5 years
m=4
im = i4 = 5.25% or 0.0525
Find: F
Solution:
Compute for the interest rate in a conversion period
j= im / m = i4 / 4 = 0.0525/4 = 0.013125
Example 3.
Find the compound amount and interest on Php175, 250 for 15years and 6 months
at 6 ¾ % compounded quarterly.
Given:
P = 175, 250
m=4
im = i4 = 6 ¾ % = 6.75 or 0.0675
t = 15 years and 6 months = 15 6/12 = 15.5 years
Find: F
Solution:
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n = mt = (4) (15.5) = 62
ENHANCEMENT EXERCISE 6
Take
F=P(1+j)n then
P= F / (1+j)n
Where
P = present value
F = maturity (future) value
j = im / m = rate of interest per conversion period
n = mt = total number of conversion period
Given:
P = 3, 691, 215
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t = 15 years
Solution:
a. When m =12 and im = i12 = 5% 0r 0.05
j = im / m = i4 / 4 = 0.05/4 = 0.0125
n = mt = (4) (15) = 60
j = im / m = i2 / 2 = 0.05/2 = 0.025
n = mt = (2) (15) = 30
Example 2:
A financial obligation of Php25, 500 is due on January 6, 2019. What is the value
of this obligation on July 6, 2013 at 9% compounded semi-annually?
Given:
F = 25, 500
im = i2 = 9% or 0.09
m=2
t = July 6, 2013 to January 6, 2019 (5 years and 6 months)= 5 6/12 = 5.5 years
Find: P
Solution:
When m = 2 and i2 = i2 = 9% or 0.09
j = im / m = i2 / 2 = 0.09/2 = 0.045
n = mt = (2) (5.5) = 11
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ENHANCEMENT EXERCISE 7
1. Find the present value of the following if the compounded amount is Php690,
690.00 at 6.09%;
a. compounded monthly for 6 years and 9 months.
b. compounded quarterly for 9 years and 6 months.
c. compounded semi-annually for 6 years and 6 months.
2. How much should Jeuz Batalla needs to invest today to buy his only son a
brand new Toyota car worth Php1, 234, 567 as a graduation gift 8.5 years from
now if money is worth 9 ¾ % compounded quarterly?
What’s More
Activity 3
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Finding the Present Value in Compound Formula in finding the present value.
Interest P= F / (1+j)n
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What I Can Do
Assessment
Direction: Write the letter of the correct answer on the space provided before each
number.
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3. At what rate of interest did Alari invest the amount of Php56, 780.00 for it to
earn a simple interest of Php5, 555 for 4.75 years?
A. 2.65% B. 6.25% C. 2.06% D. 6.02%
4. How long should Sisi Rondina invest the amount of Php65, 120 to earn an
interest of Php5, 225.00 at 4 3/5 % simple interest?
A. 1.47 years B. 1.74 years C. 4.17 years D. 7.41 years
5. How much is the total amount would Mrs. Supremido receive if she invests
Php12, 890 for 1.75 years at 3 ½ % simple interest?
A. Php13, 679.51 B. Php 16, 379.15 C. Php 17, 936.15 D. Php 19, 763.51
6. Which of the following are NOT true?
i. Principal is the money given or paid invested in the origin data.
ii. Origin date is a date on which money is paid by the borrower.
iii. Interest is an amount paid or earned for the use of money.
iv. Simple interest is an interest that is computed on the principal and then
added to it.
A. I and II B. II and III C. III and IV D. II and IV
7. Analyze the two statements below.
Statement 1:Equivalent rates refer to two annual rates with different conversion
periods that will earn the same maturity value for the same time/term.
Statement 2: An effective rate is a rate when compounded annually will give the
same compound each year with the nominal rate.
A. Both statements are true
B. Both statements are false
C. Statement 1 is true but statement 2 is false
D. Statement 2 is true but statement 1 is false
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14. How long will it takes the amount of Php3, 690 to Php8, 910, if it is invested in
a bank at 5% compounded monthly?
A. 17.67 years B. 16.77 years C. 15.62 years D. 14.76 years
15. At what interest rate will Php1, 010 grow to an amount of Php2, 020 in 3 years
and 3months, if interest is compounded semi-annually?
A. 25.12% B. 24.41% C. 23.31% D. 22.51%
16. If interest is compounded quarterly, find the nominal rate which will yield an
effective rate of 3 ½ %.
A. 1.54% B. 2.35% C. 3.45% D. 4.53%
17. When interest is compounded monthly, find the effective rate corresponding to
the nominal rate of 4 %.
A. 3.02% B. 4.07% C. 5.05% D. 6.09%
18. Alden Richards is investing Php100, 000 at 10 % converted semi-annually for
10 years. At what rate compounded monthly he could have in investing his
money?
A. 9.8% B. 8.7% C. 7.6% D. 6.5%
19. If you are to invest Php110, 110.00 at 15% converted monthly for 9 years and 9
months, what simple interest rate could have, as well as your invested principal
for the same period of time?
A. 2.36% B. 3.36% C. 4.63% D. 5.63%
20. June Mar Fajardo plans to invest Php500, 000.00 at 5% simple interest for 30
months. At what interest compounded quarterly he could have, as well as his
investment for the same period of time?
A. 2.47% B. 3.74% C. 4.74% D. 5.47%
Additional Activities
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