Republic of the Philippines

Department of Education
Region I
SCHOOLS DIVISION OF ILOCOS NORTE

BUSINESS
MATHEMATICS 11
Quarter 2 – Week 2:
Interests and Commissions

MELC: Solve problems involving interests and

commissions (ABM_BM11BS-IIb-14)

Prepared by:

JEFFERSON V. BALOALOA
SHS Teacher I
Lanao National High School

1
Business Mathematic - Grade 11
Alternative Delivery Mode
Quarter 2 – Week 2: Interests and Commissions
First Edition, 2020

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Published by the Department of Education

Secretary: Leonor Magtolis Briones
Undersecretary: Diosdado M. San Antonio

Development Team of the Module

Author: Jefferson V. Baloaloa
Editor:
Reviewer:
Layout Artist/ Illustrator:
Management Team:
Joann A. Corpuz

Joye D. Madalipay

Arnel S. Bandiola

Jenetrix T. Tumaneng

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Name of PSDS In Charge

Printed in the Philippines by: _____________________________________________

Schools Division of Ilocos Norte

Office Address: Brgy. 7B, Giron Street, Laoag City, Ilocos Norte
Telefax: (077) 771-0960
E-mail Address: ilocos.norte@deped.gov.ph
 12
BUSINESS
MATHEMATICS 11
Quarter 2 – Week 2:
Interests and Commisions

3
Introductory Message
For the facilitator:

Welcome to the Business Mathematics 11 Alternative Delivery Mode (ADM)

Module on Interests and Commissions!

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 into 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:

Note to the Teacher

This contains helpful tips or strategies that
will help you in guiding the learners.

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.

For the learner:

Welcome to the Business Mathematics 11 Alternative Delivery Mode (ADM)

Module on Interests and Commissions!

The hand is one of the most symbolized parts of the human body. It is often
used to depict skill, action and purpose. Through our hands we may learn, create
and accomplish. Hence, the hand in this learning resource signifies that you as a
learner is capable and empowered to successfully achieve the relevant competencies
and skills at your own pace and time. Your academic success lies in your own hands!

This module was designed to provide you with fun and meaningful
opportunities for guided and independent learning at your own pace and time. You
will be enabled to process the contents of the learning resource while being an active
learner.

This module has the following parts with their corresponding icons:

1
What I Need to Know This will give you an idea of the skills or
competencies you are expected to learn in the
module.

What I Know This part includes an activity that aims to

check what you already know about the
lesson to take. If you get all the answers
correctly, you may decide to skip this module.

What’s In This is a brief drill or review to help you link

the current lesson with the previous one.

What’s New In this portion, the new lesson will be

introduced to you in various ways such as a
story, a song, a poem, a problem opener, an
activity or a situation.

What is It This section provides a brief discussion of the

lesson. This aims to help you discover and
understand new concepts and skills.

What’s More This comprises activities for independent

practice to strengthen your understanding
and skills of the topic. You may check the
answers in the exercises using the Answer
Key at the end of the module.

What I Have Learned This includes questions or open-ended

statements to be filled in to process what you
learned from the lesson.

What I Can Do This section provides an activity which will

help you transfer your new knowledge or skill
into real life situations.

Assessment This is a task which aims to evaluate your

level of mastery in achieving the learning
competency.

Additional Activities In this portion, another activity will be given

to you to enrich your knowledge or skill of the
lesson learned. This also develops retention
of learned concepts.

Answer Key This contains answers to all activities in the

module.

2
At the end of this module you will also find:

References This is a list of all sources used in developing

this module.

The following are some reminders in using this module:

1) Use the module with care. Do not put unnecessary mark/s on any part of the
module. Use a separate sheet of paper in answering the exercises.
2) Don’t forget to answer What I Know before moving on to the other activities
included in the module.
3) Read the instruction carefully before doing each task.
4) Observe honesty and integrity in doing the tasks and checking your answers.
5) Finish the task at hand before proceeding to the next.
6) Return this module to your teacher/facilitator once you are through with it.
If you encounter any difficulty in answering the tasks in this module, do not
hesitate to consult your teacher or facilitator. Always bear in mind that you are
not alone.
We hope that through this material, you will experience meaningful learning
and gain deep understanding of the relevant competencies. You can do it!

3
 What I Need to Know

This module was designed and written with you in mind. It was
specifically developed and designed to provide you fun and meaningful
learning experience, with your own time and pace. This module shall serve to
give you a more in-depth knowledge about solving problems involving
interests and commissions. The scope of this module permits it to be used in
many different learning situations. The lessons are arranged to follow the
standard sequence of the course.

The module is divided into two lessons, namely:

• Lesson 1 – Solving Problems Involving Interests
• Lesson 1 – Solving Problems Involving Commissions

After going through this module, you are expected to:

• Solve problems involving interests and commissions (ABM_BM11BS-
IIb-14)

4
 Lesson
Solving Problems
1 Involving Interests

What I Know

Direction: Solve the problems below. Write your solution and answer in a
separate sheet of paper.

1. Compute the interest on a credit purchase of P30,000 at 8% for 10 and

15 months.
2. Find the maturity value of a loan of P5,000 borrowed at an interest rate
of 15% if it has to be repaid for 18 months.
3. Danica bought perfume using a credit card at a price of P2,400 payable
in four months at 15% interest. The principal is also repaid equally each
month with four payments of P600 each. Compute for the total interest
when it is paid equally over four months.
4. Tessa borrowed P2,000 at 12% interest for 2 years. Find the interest
and the maturity value.
5. Eunice lent P3,000 at 14% for 6 months. How much will she get at the
end of the term? How much interest did she earn?

What’s In

In business, capital is very important. However, not all business owners

always have enough capital to sustain their business. More often than not,
they have to borrow money for use in the business. It is in this context that
interest plays an important role. Borrowers need to pay interest on the money
that they borrow.

If you borrow P1,000 at an interest rate of 1% per month for 1 month,

you will have to pay the amount that is equal to the principal (P1,000)
multiplied by the rate (1%) multiplied by the term (1 month):

P1,000 x 1% x 1 = P10

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 What’s New

Direction: Find the missing variable using the basic interest formula. Write
your answer in a sheet of paper.

A. Ordinary Interest Method

Principal Rate Time Interest

1 P6,000 6% 60 days
2 P1,500 90 days P30
3 P8,620 15% 1 month
4 P1,600 135 days P42
5 P7,200 10% P540

B. Exact Interest Method

Principal Rate Time Interest

1 P810 7.5% P14.98
2 6% 105 days P25.3
3 P11,400 5% 1 month
4 P875 120 days P17.26
5 P2,400 7% P23.01

What is It

Simple Interest and Maturity Value

Consider the problem:

October of last year, Jef borrowed an amount of P200,000 from JVB

Cooperative at an interest rate of 2% to finance his house renovation. How
much is the interest if his due date is October of this year.

6
 Most businesses and people acquire assets without paying its full cost
at the time of purchase. The seller may then charge the buyer for this
privilege. The amount of charge for such privilege is called interest. In the
loan made by Jef, the loan interest is computed as follows:

Given:

P : P200,000
R : 2%
T : 1 year

Solution:

I = PRT
= 200,000 (0.02) (1)
= P4,000

The amount of money, P200,000, which was borrowed from the

cooperative is called the principal, P, and the interest charged, I = P4,000, is
a percent of principal. The period of time where the lender or creditor will
charge the interest starting from loan date up to the loan repayment date is
called loan term or interest period, T, which is 1 year in the problem, and
quoted percent is the rate 2%, which is R.

Simple interest is interest paid only on the original amount of money

or principal. To compute simple interest, we use I = PRT, where P is the
principal, R is annual interest rate, and T, interest period (in years).

The maturity value M that the lender receives from the debtor on the
maturity date of the loan is equal to the sum of the principal P and the simple
interest I. That is, we have:

M=P+I
Since I = PRT, we get:

M = P + PRT = P(1 + RT)

Ordinary and Exact Interest

Suppose the term of the loan is stated as a certain number of days, we

may divide the number of days by 365 or 360. When the divisor is 360, we
are applying ordinary interest, which is still used by many businesses
nowadays. The banks and other credit unions use the exact interest, in
which 365 is used as a divisor.

We replace the formula in I = PRT, where T is expressed in days, as

follows:

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 𝑅
For Ordinary Interest : I=P. .T
360

𝑅
For Exact Interest : I=P. .T
365

Example:

Diego wants to know which credit company offers lower interest at the
same interest rate of 9% if he plans to borrow a quick cash of P30,000 for 90
days. Company A uses the ordinary interest method to compute for the
interest while, Company B applies the exact interest method. Which company
will he choose? What is the difference between the interests offered by the two
companies?

Solution:

0.09
In Ordinary Interest : I = 30,000 (90)
360
= P675
0.09
In Exact Interest : I = 30,000 (90)
365
= P665.75

Here, the advantage of 365-day year offered by Company B is more

realistic and financially better for the borrower since their interest is smaller
under the same interest rates. He could save an amount of 675 – 665.75 =
P9.25 if he borrowed the money from Company B instead of borrowing it from
Company A.

Finance Charges on Unpaid Balance

Many people use credit card to purchase goods or services for them to
attain quick possession or immediate service, but delay the payment. In credit
cards, an interest charge or finance charge is normally offered. The finance
charges on the unpaid balance each month is the general concept of charging
for credit-card purchases.

Example:

Betty wants to use her credit card to buy P10,000 worth of items
payable in 10 months at 15% per year. Find the interest on an annual and
monthly basis.

Solution:

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 Using I = PRT, the principal P can be treated as the unpaid balance, T
is expressed in months, and R is the month/annual rate.

The interest on an annual basis is computed as follows:

10
I = 10,000 (0.15) = P1250
12

On a monthly basis, the ineptest may be computed as:

0.15
I = 10,000 (10) = P1250
12

What’s More

Direction: Solve the problem below. Write your solution and answer in a sheet
of paper.

Pasita makes a P40,000 credit purchase and agrees to repay the credit
in four equal monthly payments of P10,000. For each month, she has to pay
12% annual rate on the unpaid balance. To summarize what she has to pay,
complete the table below.

Unpaid Monthly Principal Total New

Month
Balance Interest Payment Payment Balance

1st Month

2nd Month

3rd Month

4th Month

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 What I have learned

Direction: In a piece of paper, answer the following questions.

1. What is interest?
2. How does maturity value is computed?
3. What are the differences between ordinary and exact interest?
4. In what situation will you apply your knowledge about solving interest?

What I can do

Direction: In a sheet of paper, complete the table below showing the

equivalent monthly to yearly rates, and vice versa.

Monthly Rate Annual Rate

1 14%
2 0.75%
3 1
12%
4 18%
5 2
%
3
6 10%
7 13%
8 0.75%
9 13%
10 2%

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 Assessment

Direction: Solve the following problems below. Write your solution and
answer in a sheet of paper.

1. Jessica has a loan with an interest rate of 6%. The amount of interest
is P43.75 for a period of 75 days. How much is her loan using ordinary
interest method?
2. James repaid a total of P762.39 on due date of his loan. How much is
the rate that the lender charged James of he borrowed an amount of
P750 for 45 days using exact interest?
3. A commercial bank charges 9% interest for a 120-day loan. If the exact
interest amount is P264, how much is the principal amount?
4. The employee’s union charges 10% interest for short-term loan. If I
borrow P20,000 and must pay an amount of P2,000 monthly, what is
the length of my loan?
5. Daniela read an advertisement for a P50,000 loan. The aid informs the
borrower that the company only charges 18% annual interest. If she
plans to borrow that amount and repays it at the end of the year, how
much is the interest? What is the amount of interest each month?

Additional Activities

Direction: Solve the problem below. Write your solution and answer in a sheet
of paper.

Jayson is starting a small business, and he needs a capital of P50,000.

He already has P25,000, and is considering to loan the other P25,000 from
one of the following lending companies. Which will be the best company to
loan from if Jayson wants to pay the lowest interest possible? Assume that all
companies use ordinary interest. Explain.
a. Company A
Rate : 6%
Time : 120 days
b. Company B
Rate : 10%
Time : 60 days
c. Company C
Rate : 5%
Time : 150 days

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 Lesson
Solving Problems
2 Involving Commissions

What I Know

Direction: Choose the correct answer from the choices listed after each item.
Write the letter that corresponds to your answer in a separate sheet of paper.

1. A real estate agent sold a piece of property for P50,000. His commission is
7.5%. How much does he receive?
a. P3,000
b. P3,750
c. P2,000
d. P2,750

2. A salesman received P630 for selling a boat. His rate of commission was
5.25%. What was the selling price?
a. P13,000
b. P13,750
c. P12,000
d. P12,750

3. How much would you have to deposit at 4% in order to withdraw P819 at

the end of 1 year and 3 months?
a. P500
b. P650
c. P780
d. P700

4. Sarah earns a base salary of P350 every week with an additional 10%
commission on everything she sells. If Sarah sold P2,200 worth of items
last week, what was her total pay?
a. P570
b. P500
c. P430
d. P525

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5. Ken works at a store where he is paid a weekly salary of P125 plus a 5 ½%
commission on his total sales. On a particular week, Ken sold a total of
P985. How much did Ken earn that week?
a. P117.15
b. P108.40
c. P179.18
d. P150

What’s In

Salesmen, agents, and brokers are generally paid commissions as

incentives for increasing a firm’s sales. Salesmen are employees of the firm
either paid on a straight commission basis or on a salary plus commission
basis.
If a sales agent earns a basic monthly salary of P10,000 and is paid a
3% commission on all his or her sales for the month, he or she will have a
gross earnings of basic salary plus commission. If he or she sold P30,000 for
the month, his gross earnings and commission will be:
Gross Earnings = Basic Salary + Commission
= P10,000 + 3% x P30,000
= P10,000 + P900
= P10,900

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 What’s New

Direction: Complete the table below. Write your answer in a separate sheet
of paper.

Amount of
Total Sales Commission Rate
Commission
1 P40,000 3%
2 5% P2,500
3 P150,000 P1,000
4 3.5% P13,000
5 P1,300,000 2%
6 P35,000 P1,400
7 8.2% P1,394
8 P62,000 P6,875
9 5% P926.5
10 13%

What is It

In sales, the amount of money received by an employee or agent for

performing a business transaction or service is called commission. There are
three different types of commission. These are:

1. Straight Commission
2. Graduated Commission
3. Salary plus Commission

Straight Commission

Straight commission is when a sales agent is paid a percentage of sales

only.

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Example:

France works on a “commission only” basis and receives 3% on her

monthly sales without a base salary. What is her commission and total pay
during a month when she sells P120,000 worth of appliance, but her
customer cancelled an order for P12,000 and returned the appliance which
was already delivered.

Solution:

There are instances at which goods are returned and orders are
cancelled. If it happens, the sale is not eligible for a commission. With that,
we compute for the commission as follows:

P12,000 is subtracted from the total sales, P120,000 – 12,000 =

P108,000. So, from P108,000 sales, the commission is computed as:
P108,000 (0.03) = P3,240.

Graduated Commission

Some companies apply the graduated commission rates to encourage

their agents to sell more goods. Graduated commission may be increased if
the agents’ level of sales also increases.

Example:

India has a monthly commission plan where she received 2.5% on the
first P100,000 of sales during the month and 3.5% on sales above P100,000.
If her total sales during the month is P150,000, compute her commission.

Solution:

We compute for the commission as follows:

P150,000 – P100,000 = P50,000

Sales Amount Commission Rate Commission

P100,000 0.025 2,500
P50,000 0.035 1,750
Total Commission 4,250

Salary Plus Commission

A salary plus commission is when a person gets paid a salary and a

percentage of his/her sales. Let us take a look at this example.

14
Example:

Mr. Tarnate decides to work for Ilocos Norte Trading Company that will
pay him P3,500 per week and 6% of any sales above P3,000. If he sold goods
worth P5,000, what is his gross pay?

Solution:

P5,000 – P3,000 = P2,000

His commission is P2,000 (0.06) = P120
His gross pay is computed as P3,500 + P120 = P3,620 for that week.

What’s More

Direction: Below shows the sales and salary of 6 employees working at

Bangui Northern Company. In this corporation, all salespersons are paid
2.5% commission on sales up to P30,000, 4% commission on sales from
P30,000 to P60,000, and 5% on sales that exceed P60,000. Some employees
are paid monthly salaries in addition to commissions. Complete the table
below and answer the questions that follow.

Salesperson Sales Salary Gross Pay

Erwin P45,000 0
Bernard P30,000 P1,000
Karen P55,000 P2,000
Diego P75,000 P500
Editha P50,000 P1,500
Flora P80,000 0

1. How much is the total sales and gross pay?

2. Who has the highest gross pay?
3. Who has the lowest gross pay?

15
 What I have learned

Direction: In a piece of pad paper, write at least five (5) questions you have
in mind before that were all answered on this lesson.

1.
2.
3.
4.
5.

What I can do

Direction: Solve the problem below. Write your solution and answer in a
sheet of paper.

Aries had been offered two jobs from two different companies. Company
A offered him 5.25% commission on all his sales, while Company B offered a
4% commission with a monthly salary of P6,000 on his sales.

1. If his total sales is P80,000, how much is his gross pay in Company A?
Company B?
2. If you were Aries, which job will you accept? Explain.

Assessment

Direction: Solve the problem below. Write your solution and answer in a
sheet of paper.

Peter sells chargers at BJV Computer Retail Store. He receives a

graduated commission as shown:

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 Normal Commission

Product Commission
1 P9,855
2 P14,398
3 P14,091
4 P16,818

The company also gives bonus commission of 5% if the employee is able

to sell at least a total of P25,000 worth of products. The following table shows
Peter’s sales for the month of October.

Product Pieces Commission

A 3 P4,250
B 2 P5,100
C 6 P3,850
D 4 P11,200

1. How much is Peter’s commission for selling product D?

2. How much is his commission from selling products A and D combined?
3. How much is his total normal commission?
4. Did he qualify for the bonus commission? If yes, how much is the
commission?

Additional Activities

Direction: Solve the following problems below. Write your solution and
answer in a sheet of paper.

1. Myrna makes a base monthly salary of P9,000 and gets 10% of

everything she sells. If Myrna got a total salary of P12,000 for the
month, how much is the worth of items did she sell?
2. Rocky makes P9,000 a month plus some more money from commission.
He gets 10% of everything he sells. If Rocky sold P30,000 worth of items
this month, how much is his salary for the month?

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 Answer Key

LESSON 1

What I Know

1. 10 months: P2,000 15 months: P3,000

2. P6,125
3. P120
4. Interest: P480 Maturity Value: P2,480
5. Interest: P210 Maturity Value: P3,210

What’s New

C. Ordinary Interest Method

Principal Rate Time Interest

1 P6,000 6% 60 days P60
2 P1,500 8% 90 days P30
3 P8,620 15% 1 month P107.75
4 P1,600 7% 135 days P42
5 P7,200 10% 270 days P540

D. Exact Interest Method

Principal Rate Time Interest

1 P810 7.5% 90 days P14.98
2 P1,465.79 6% 105 days P25.3
3 P11,400 5% 1 month P46.85
4 P875 6% 120 days P17.26
5 P2,400 7% 50 days P23.01

What’s More

Unpaid Monthly Principal Total New

Month
Balance Interest Payment Payment Balance
1st Month 40,000 400 10,000 10,400 30,000

2nd Month 30,000 300 10,000 10,300 20,000

3rd Month 20,000 200 10,000 10,200 10,000

4th Month 10,000 100 10,000 10,100 0

What I have Learned

This vary. A point will be given for every correct answer.

17
What I Can Do

Monthly Rate Annual Rate

1 1.67% 14%
2 0.75% 9%
3 1
1 % 18%
2
4 1.5% 18%
5 2
% 8%
3
6 0.83% 10%
7 1.08% 13%
8 0.75% 1%
9 1.08% 13%
10 2% 24%
Assessment

1. P3,500
2. 13.4%
3. P8,922.22
4. 1 year
5. P9,000 : P750

Additional Activities

Company B offers the least interest through the time it takes to pay the loan is just
60 days.

LESSON 2

What I Know

1. B
2. C
3. D
4. A
5. C

What’s New

Amount of
Total Sales Commission Rate
Commission
1 P40,000 3% P1,200
2 P50,000 5% P2,500
3 P150,000 0.67% P1,000
4 P26,000 3.5% P13,000
5 P1,300,000 2% P17,000
6 P35,000 4% P1,400
7 P19,250 8.2% P1,394
8 P62,000 11.09% P6,875
9 P2,600 5% P926.5
10 0 13% 0

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What’s More

Salesperson Sales Salary Gross Pay

Erwin P45,000 0 P1,800
Bernard P30,000 P1,000 P1,750
Karen P55,000 P2,000 P4,200
Diego P75,000 P500 P4,250
Editha P50,000 P1,500 P3,500
Flora P80,000 0 P4,000

1. P335,000
2. Diego has the highest gross pay
3. Erwin has the lowest gross pay

What I have Learned

Answers may vary. It will be corrected but not recorded.

What I Can Do

1. Company A: P4,200 Company B: P9,200

2. Accept Company B’s offers since I will earn P9,200 higher than Company A.

Assessment

1. P1,250
2. P2,250
3. P2,900
4. P2,350
5. P25,150

Additional Activities

1. P30,000
2. P12,000

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References:
Books

1. Dagal, Keneth Adrian P., Lopez, Brian Roy C. & Lundag, Leah M. (2016).
Business Mathematics. Quezon City, Manila: Haus of Serah Printing
and Trading Corp.

2. Mariano, Norma D. (2016). Business Mathematics. Quezon City,

Manila: REX Printing Company Inc.

Other Sources:

1. K to 12 Senior High School ABM Specialized Subject – Business Math

December 2013
2. K to 12 Curriculum Implementation and Learning Management Matrix

20
For inquiries or feedback, please write or call:

Schools Division of Ilocos Norte – Curriculum Implementation Division

Learning Resource Management Section (SDOIN-CID LRMS)

Office Address: Brgy. 7B, Giron Street, Laoag City, Ilocos Norte
Telefax: (077) 771-0960
Telephone No.: (077) 770-5963, (077) 600-2605
E-mail Address: ilocos.norte@deped.gov.ph

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