11

GENERAL MATHEMATICS
Simple and Compound Interest
Quarter 2 Week 1 & 2
Name: ________________________Date: __________
Grade: ___________________ Section: ___________

Let’s Talk About Interests

Learning Competency (LCC):
Solves problems involving simple and compound interests.
(M11GM-IIb-2)

Behavioral Learning Objectives:

Cognitive: Identify the terms used involving simple and compound interest.
Psychomotor: Solve problems involving simple and compound interests.
Affective: Value the importance of learning the concept of simple and
compound interest in borrowing money.

What I Need to Do

Hello! Do you know "What are some strategies for managing your hard-earned
money?" You may purchase items you do not require, keep the money, put it in the
company, or consider the future. When money is set in a bank or saved in a savings
account, it is said to be invested. Interest is frequently charged; similarly, a borrower must
typically pay interest on borrowed money. You spend your money while paying interest
when you use or borrow other people's money. There are two fundamental methods for
determining the amount of interest paid on loan. Simple and compound interest on money
deposited
In this activity, you will learn about solving problems with simple and compound
interests, which will help you obtain better knowledge and create an inner appreciation of
the various ways of estimating the amount of interest.

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 Gearing Up
Activity 1: I’ll Recognize

Directions: Identify the word that corresponds to the statement below. Choose the word
as your answer from the choices in the box. Write your answers on the space provided
before the number. (10 points)

Borrower or Debtor Principal (P) Rate (r)

Origin or Loan Date Lender or Creditor

Time or Term (t) Simple Interest (Is) Maturity Date

Compound Interest (Ic) Maturity Value or Future Value (F)

_______________1. A person or an institution that owes the money or avails of the funds
from the lender.
____________2. An interest calculated on the sum of an original principal plus accrued
interest.
____________3. An amount after t years; balance at the end of t year; amount received
by the lender from the borrower on the maturity date.
____________4. A person or an institution who invests the money or makes funds
available.
____________5. The date on which money is received by the borrower during loan.
____________6. A date on which the money borrowed or loan is to be completely repaid.
____________7. An amount of money borrowed or invested on the origin date
____________8. An interest that is computed on the principal and then added to it.
____________9. An annual rate, usually in percent, charged by the lender, or rate of
increase of the investment.
___________10. Amount of time the money is borrowed or invested; length of time
between the origin and maturity dates.

Directions: Identify which formula below belongs to simple and compound interest. Write
your answers on the space provided before the number. (5 points)

____________1. Is = Prt
____________2. F = P + Is
____________3. F = P(1 + r)t
____________4. Ic = F – P
!
____________5. F = P(1 + ") nt

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 Getting Better
Activity 2: C.U.B.E.S

Directions: C.U.B.E.S - CIRCLE the question words, UNDERLINE the key words, BOX
the key numbers, ENUMERATE the steps, SOLVE and explain your thinking. Problem 1
serves as an example. You may use separate sheet of paper if needed.

Problem 1: Digos City market vendors can open a savings account with iCardBank,
Inc. for 4.5% of the yearly simple interest rate.
How much interest would be collected on a deposit of Php50,000 for two years?
Step 1: Identify the given in the problem.
Step 2: Identify whether the problem is simple or compound interest and use
appropriate formula.
Step 3: Analyze the given question carefully and solve for the missing value.
Solution:
Given: P = 50, 000 r = 4.5% t=2

𝐼 = 𝑃𝑟𝑡
𝐼 = (50000)(0.045)(2)
𝐼 = 4500
Thus, Digos City market vendors will gain an interest of Php4,500.00 if they deposit
Php50,000.00 in iCardBank, Inc. for 2 years.

Problem 2: ShopeepayLater provides a 6-month loan to its gold members at a 30%

annual simple interest rate. How much interest is charged on purchases costing
Php2,000.00? How much will the member pay per month if the maturity value is split
evenly?

Problem 3. Assume Mr. Dela Cruz put Php50,000 in Modified Pag-ibig II (MP2) Savings
with a 5-year compounded interest rate of 6% annually. Calculate the maturity value and
compound interest.

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 Gaining Mastery
Activity 3: Balance, Reason, and Effect

Directions: Solve problems 1 and 2. Fill out the comparison organizer with your response.
Consider carefully which side of the weighing scale you will write your answer on (Simple
or Compound Interest). You can integrate ICT skills in modifying or making a new
organizer.
Problem 1: Mr. Reyes borrowed Php100, 000.00 for 3 years at a simple interest rate of
5% per year. How much interest would be charged? How much will he pay in three years?
Problem 2: Assume that an online loan company offers Php100, 00.00 compounded
quarterly at a 5% rate of interest for 3 years. Calculate the maturity value and compound
interest.

Solution: Solution:

Maturity Value: __________ Maturity Value: ____________

Type of Inte Type of Interest:

re st:

Interest in 3 year
s: Compounding P
eriod:

Interest in 3 year
s:

Questions to ponder:
1. Which concept is the best for borrowing money? Why?
______________________________________________________________________
______________________________________________________________________
2. Which concept is better for investing money? Why?
______________________________________________________________________
______________________________________________________________________
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 Rubrics for Scoring

Your Balance, Reason, and Effect activity will be scored with this rubric. Read it carefully!

1 2 3 4 5

Unable to get Attempt, but Slight flaws Complete Excellent answer.

a good start. fail to finish but answer. Gives a complete
Words do not the task. adequate. Provides a response with a
accurately Explanation is Completes reasonably clear, coherent,
portray the not coherent; the task well, comprehensive concise, and simple
problem; graphic may but the answer with explanation;
illustrations be confusing; explanation reasonably involves
misrepresent demonstrates may be clear customized
the problem a lack of unclear; explanations; illustration; clearly
scenario; grasp of the reasoning may include an conveys to the
duplicates issue may be appropriate identified audience;
portions of the scenario; and insufficient; diagram; demonstrates
problem but may contain diagram may clearly conveys understanding of
does not seek serious be to the identified the open-ended
to solve it; and computational inadequate audience; problem's
fails to show mistakes. or unclear; demonstrates mathematical ideas
which understands understanding and processes;
information is the of the identifies all of the
relevant to the fundamental problem's problem's important
problem. mathematical mathematical elements; may
concepts; ideas and include examples
effectively processes; and
applies identifies the counterexamples;
mathematical most important and presents
ideas. elements of the strong supporting
problem; and arguments.
presents solid
supporting
arguments.

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 What I Need to Remember

• Borrower or Debtor – person or an institution that owes the money or avails the funds.
• Lender or Creditor – a paid premium for the capital
• Loan Date – the date on which money is received by the borrower during loan.
• Maturity Value or Future Value – amount after a number of years that the lender receives
from the borrower on the maturity date.
• Interest – is a fee a borrower pays to the lender for a loan. The most common forms of
interest are simple and compound interest.
• Simple Interest – is a fixed amount (percentage) of the loan amount paid over a certain
time. It is usually owed on mortgages, car loans and personal loans.
• Compound Interest – increases and accumulates with other interest amounts. Basically,
the borrower pays interest on interest along with the loan amount.
• Compounding Period – is the span of time between when interest was last compounded
and when it will be compounded again.
• Rate – annual rate usually in percent, a premium charged by the lender, or rate of increase
of the investment on loan.
• Principal – amount of money borrowed or invested on the origin date.
• Term or Time – amount of time in years the money is borrowed or invested length of time
between the origin and maturity date.

It is essential to understand why simple interest is beneficial to borrowers while

compound interest benefits investors. The method by which interest accumulates
differentiate simple interest from compound interest. Simple interest accumulates only on
the principal balance, whereas compound interest accumulates on both the principal
balance and the accumulated interest. When borrowing money, simple interest works in
your favor, whereas compound interest works far better for you as an investor. As a
borrower, simple interest is preferable because you are not paying interest on interest. It
is easier to service loans with simple interest. Compound interest can help you build
wealth over time because your earnings earn money as well.

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References

Indeed Editorial Team. 2020. February 26. Accessed October 01, 2022.
https://www.indeed.com/career-advice/career-development/simple-vs-compound-
interest.

Geronimo C. Sacal, General Mathematics – Grade 11 Quarter 2 Module 6: Simple and

Compound Interest, 1st ed. Cagayan De Oro City: Department of Education,
Region X, 2019

Writers: Honey Lyn C. Paras

School: Davao del Sur School of Fisheries
Division: Davao del Sur
Illustrator: Honey Lyn C. Paras
School: Davao del Sur School of Fisheries
Division: Davao del Sur
Content Editor: Catherine F. Necesario
School: Lower Bala National High School
Division: Davao del Sur
Language Editor: Ivy Jean L. Durangparang
School: Sibulan National High School
Division: Davao del Sur

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 Answer Key

Gearing Up Getting Better

Problem 3
A Problem 2
1. Borrower or Debtor Php50,000
2. Compound Interest 6 – month 5-year compounded
3. Maturity Value or 30% annual simple interest rate
Future Value (F) interest rate 6% annually.
4. Lender or Creditor P2,000.00?
5. Origin or Loan Date How much will the
6. Maturity Date member pay per month Steps may vary
7. Principal (P) if the maturity value is
8. Simple Interest (Is) split evenly? Given:
9. Rate (r) P = 50000
10. Time or Term (t) Steps may vary r = 6% or 0.06
B t=5
1. Simple Interest Given:
2. Simple Interest P = 2000 Solution:
3. Compound Interest r = 30% or 0.30 𝐹 = 𝑃 (1 + 𝑟 )6
4. Compound Interest / F = 50000(1+0.06)5
t = 01 F = 50000(1.06)5
5. Compound Interest
F = 66911.28
Solution:
𝐼 = 𝑃𝑟𝑡 Explanation: Answer
/
I = (2000)(0.30)( 01) may vary
I = 300
𝐹 = 𝑃+𝐼
F = 2000 + 300
F = 2300
Php383.33/month

Explanation: Answer
may vary

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 Answer Key

Gaining Mastery

Left Right Questions to Ponder:

Given: Given: Answer may vary
P = 100000 P = 10000
r = 5% or 0.05 r = 5% or 0.05
t=3 n=4
Solution: t=3
𝐼 = 𝑃𝑟𝑡 Solution:
I = (100000)(0.05)(3) 𝑟 "6
𝐹 = 𝑃 (1 + )
I = 15000 𝑛
8.89
𝐹 = 𝑃+𝐼 F = 100000(1+ : )(:)(;)
F = 100000 + 15000 F = 100000(1.0125)12
F = 115000 F = 116075.45
𝐼=𝐹−𝑃
Type of Interest: Simple I = 116075.45 – 100000
Interest I = 16075.45

Interest in 3 years: Type of Interest:

Php15000 Compound Interest

Compounding Period:
Quarterly or 4

Interest in 3 years:
Php16, 075.45

Writers: Honey Lyn C. Paras

School: Davao del Sur School of Fisheries
Division: Davao del Sur
Illustrator: Honey Lyn C. Paras
School: Davao del Sur School of Fisheries
Division: Davao del Sur
Content Editor: Catherine F. Necesario
School: Lower Bala National High School
Division: Davao del Sur
Language Editor: Ivy Jean L. Durangparang
School: Sibulan National High School
Division: Davao del Sur
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