Part I. Matching Type.

Match the words inside the box with the corresponding statement that best
describe the term.

Exact In
Lender/Creditor Principal ter est
Maturity
Maturity V
a Discount
lue Debtor
Simple Interest
Banker’s Rule
Actual Time Ordinary Interest Approximate Time

1. ________________ is the person or institution that makes the funds available to those who need it
2. ______________ a method to calculate the amount of interest charged on a sum at a given rate and for a
given period of time.
3. In the absence of contrary statement, Simple Interest is computed using _______________ or Ordinary
Interest.
4. ______ is the method of computing time which uses 30 days in every month or 360 days in a year.
5. ___________ refers to the amount of initial capital or money being lent or invested.
6. The computed interest is added to the principal amount to get the ____________.
7. The reduction of either the monetary amount or a percentage of the normal selling price of a product
or service is called ___________.
8. _______________ is a method in computing simple interest that uses actual time.
9. Leap years will affect the interest when using _______ to compute the time.
10. ________ refers to the date on which the life of a transaction or financial instrument ends, after which to
must either be renewed, or it will cease to exist.
Part II. Multiple Choice: Choose the letter that best describes the question.
11. What is the interest of Php 5,500 at a simple interest rate of 15.5% for 9 months?
a. Php 639.38 b. Php 6,139.38 c. Php 7,672.50 d. Php 8,122.40
12. How much interest will be earned when Php 520,000 is invested at the rate of 5.75% per year for
90days? Assume that there are 360 days in a year.
a. Php 4,577 b. Php 7,745 c. Php 7,475 d. Php 5,774
13. At what rate did Simon invest his money amounting to Php 175,000 if he received Php 2,843.75 worth
of interest after 6 months?
a. 5% b. 4.5% c. 4% d. 3.25%
14. How long will it take for an investment of Php 250,000 to double itself if it is invested at the rate of
8%?
a. 14 years and b. 12 years and c. 10 years and d. 8 years and 6
6 months 6 months 6 months months
15. At what rate per annum should P2,400 be invested so that it will earn an interest of P800 in 8 years?
a. 7.8% b. 5.5% c. 4.17% d. 2.1%
16. Which months have 30 days?
a. August, June, September, November
b. May, April, June, November
c. April, June, September, November
d. February, June, September, November
17. What will be the ratio of simple interest earned by certain amount at the same rate of interest for 6
years and that for 9 years?
a. 1 : 3 b. 1 : 4 c. 2 : 3 d. Data inadequate
18. What is the effective interest rate of a simple discount note for ₱10,000 at an ordinary bank discount
rate of 9%, for 120 days? Round to the nearest tenth percent.
a. 9% b. 9.3% c. 1.3% d. 1.0%
19. The following elements in computing Simple Interest except
a. Principal b. Interest rate c. Time d. Discount rate
20. Mary Watts borrowed ₱562 on June 24 for sixty days with a 365-day year. What is the date of
repayment or the maturity date?
a. August 24 b. August 22 c. August 25 d. August 23
Part III. Problem Solving: Open ended. Provide the answer to the question asked. Show your solution.
16. Hailey wanted to invest an amount 𝑃ℎ𝑝 100,000.00 for 5 years at a financial institution that gives a
simple interest of 4% per year. The interest rate was given to Kiko by the financial institution on the
assumption that he cannot withdraw the investment within the 5-year period. How much is Hailey’s
earning on the investment after the 5-year period?

17. What is the effective interest rate of a discount note for ₱22,500, at a discount rate of 12% for 2
years? Prove your answer.

18. Find the proceeds on ₱9,200.00 due at the end of 3 years at 7%.

19-20. What amount should be paid on January 15, 2010 for a loan of ₱16,000.00 made on
July 7, 2009 at 8% simple interest using:
a. Ordinary Interest using actual time
b. Ordinary Interest using approximate time