ILIGAN MEDICAL CENTER COLLEGE

Basic Education Department

Laya Extension, Pala-o, Iligan City

SUBJECT: Applied Economics

TEACHER: Ms. Kate D. Paglinawan
TOPIC: Investments, Interest Rates and Rental Concerns
MELCs: Analyze the effects of contemporary issues such as migration, fluctuation
in the exchange rate, INTEREST RATE, oil price increases,
unemployment, peace and order, etc. on the purchasing power of the
people

I. INTRODUCTION
If you have 1 million pesos to spend, what would you do? Would you consider
buying material things? Or would you want to invest the money?

In the Philippines, the primary investment types are:

 Securities
 Managed Funds
 Government savings programs

In the Philippines, the primary investment types are:

 Trading
 Small business
 Crowdsourcing
 Cooperatives
 Real estate

In the Philippines, the primary interest types that both public and private banks are:
 Simple (Regular) Interest
 Compound Interest
 Nominal/Accrued Interest

II. MOTIVATION

1. Why should we invest?

2. Why do banks have interest rate when you loan?

Warm Up: Kahoot.com/Quizziz.com

III. INSTRUCTION

 Investment is an asset or commodity obtained with the intention of

 producing sales or appreciation.
 Appreciation refers to an increase over time in the valuation of an object.

EXCHANGE RATE
 Investment may depend on the exchange rate of a country.

Exchange rate is the value of a currency for the purpose of conversion to another.

STAY AHEAD OF INFLATION

You'll eventually end up wasting money over time if you do not invest and build your
money.

Inflation is the general rise in prices that arises every year and the decrease in the
money's buying power.

Investment as a Form of Retirement

Any new way of making money encourages you to increase your net worth. You are
more prepared for any emergency and retirement.

Money Making Money

Investing for the long term provides more options for your income to grow—your
earnings compound with time. Your money works hard to save you from having to
work.

Meet Other Financial Goals

Getting other methods of earning allows you accumulate cash easier.

Interest Rate
 Interest rate is the amount a lender charges for the utilization of assets
expressed as a percentage of the principal.

The rate of interest is usually noted on an annual basis referred to as the annual
percentage rate (APR).
 Interest rate does not take account of the inflation rate because of the
Purchasing Power of Peso (PPP) or the value of money to buy a
product/service decreases.

Banks determine interest rates today by the interaction of the money market supply
and demand for funds.

Nominal Interest
Commonly known as fixed interest rate. This does not take the increase of commodity
into the computation. It’s used mostly by the commercial banks for their loans.
IV. PRACTICE

Allen borrowed from a bank with the amount of ₱100,000 and he needs to pay it for
twelve months with the interest rate of 10%. How much is the nominal interest and
how much does he need to pay monthly?

V. ENRICHMENT

A businessman decides to loan ₱50,000 from a bank with an interest rate of 2%

payable within three months. The CPI rates for the next months are as follows: 2%
for the first month, 2.5% for the second month, and 1.5% for the final month. Create
a sample interest rate computation based on this problem.

VI. EVALUATION

Direction: Write the solutions and answer in ½ sheet of paper

1. To start his ice cream business, Jake decided to loan ₱50,000 from the
bank with a nominal interest rate of 5%, payable in six months.
Solve for the interest and monthly payment with interest of Jake’s loan.

2. Maria wants to loan ₱80,000 from the bank with a nominal interest rate
of 3%, payable in six months.
Solve for the interest of Maria’s loan every month.

3. Suzy is thinking of investing in a bank for the amount of ₱100,000 with

an accrued interest rate of 5%.
Solve for the monthly accruals of Suzy’s investment.

4. Joe is planning to open a sari-sari store. He has a debt of ₱95,800 from

the bank with a nominal interest rate of 10%, payable in six months.
Solve for the interest and monthly payment with and without interest of
Joe’s loan.

5. Kylie planned to loan ₱30,000 from the bank with a nominal interest
rate of 3%, payable in six months.
Solve for the interest of Kylie’s loan every month.
Rubric: