PeTa in Business Math

Presented by: Group 1

Cuatico, Benedict Andrei
Dolo, Seth Emmanuele
Edep, Jocelyn
Hermilla, Shaira
Malagkit, Aaron

VIII – Blsd. Frederic Ozanam

This lady likes However she
shopping. does not
always have
the money to
buy what she
wants.
 SOLUTION TO HER PROBLEM ????
So she applies to a
bank or credit institution
for a credit card.
Depending on her
credit history
the bank will decide,
to give her the card
or refuse her.
Different banks or credit institutions will have different
conditions, so like any other form of credit it is important to shop
around.
SO CAN SHE NOW BUY AND BUY?
Afraid not!!
She will have a
credit limit, which
means she can only This amount will
spend up to a certain be different for
amount. different people,
as it will depend
on their financial
circumstances.

Also she will have to pay

for everything she buys.
 CREDIT CARD
 Also known as PLASTIC MONEY, it is a means of
DEFERRED PAYMENT.

 A credit card is a payment card issued

to users as a system of payment. It
allows the cardholder to pay for goods
and services based on the holder's
promise to pay for them.
 BRIEF HISTORY

 Franz Nesbitum McNamara, as American

businessman founded Diner’s Card in 1950.
Barclays Bank in UK introduced in 1966.
 Central Bank of India introduced in 1980.
Now many banks issued credit cards.
OFFERS OF CREDIT CARDS
ADVANTAGES OF CREDIT CARDS
For card holders :
 Purchase without immediate payment
 Overdraft/ credit facility
 Security as less cash carried
 Freebies and discount facility
 Status symbol
ADVANTAGES OF CREDIT CARDS
For member establishments :
Payments guaranteed, when charge slip sent to
member establishment.
 Speedy settlement of bills by banks
 Burden of credit facility taken by bank.
 Increase in volume of business transactions.
DISADVANTAGES OF CREDIT CARDS
 INTEREST
 The money earned when
money is invested.
 The CHARGED INCURRED
when a loan or credit is
obtained.
 INTEREST
 Formula: 𝐼=𝑃𝑥𝑅𝑥𝑇

where: I – simple interest

P – principal
R – rate per annum
T – time in years
 EXAMPLE 1:

A 2-year loan of 5,000.00 Php is

made with 4% simple interest.
Find the interest earned.
 EXAMPLE 1:
Always take a moment to identify the values given in the problem.

Given: 2 years – time

5,000.00 Php – Principal
4% or 0.04 – Rate of interest
Required: Interest
Equation/Formula: 𝐼 = 𝑃 𝑥 𝑅 𝑥 𝑇
Solution:
𝐼=𝑃𝑥𝑅𝑥𝑇
𝐼 = 5,000.00 𝑥 0.04 𝑥 2
𝐼 = 400.00 𝑃ℎ𝑝

Answer: The interest earned is 400.00 Php

 EXAMPLE 2:

A business takes out a simple

interest loan of 30,000.00 Php at
a rate of 10%. What is the total
amount the business will repay if
the loan is for 8 years?
 EXAMPLE 2:
Given: 8 years – time
30,000.00 Php – Principal
10 % or 0.10 – Rate of interest
Required: total amount the business will repay if the loan is for 8 years
or simple amount at the end of the loan period.
Equation/Formula: s = 𝑃 (1 + 𝑅 𝑥 𝑇)
Solution:
S = 𝑃 (1 + 𝑅 𝑥 𝑇)
S = 30,000.00 (1 + 0.10 𝑥 8)
𝑆 = 54,000.00 𝑃ℎ𝑝

Answer: The business will pay a total amount of 54,000.00 Php

 EXAMPLE 3:

Kyle deposits P 15,000 at a bank

at an interest rate of 5% per year.
How much interest will she earn
at the end of 3 years?
 EXAMPLE 3:
Given: 3 years – time
15,000.00 Php – Principal
5 % or 0.05 – Rate of interest
Required: Interest Kyle will earn after 3 years
Equation/Formula: 𝐼 = 𝑃 𝑥 𝑅 𝑥 𝑇
Solution:
𝐼=𝑃𝑥𝑅𝑥𝑇
𝐼 = 15,000.00 𝑥 0.05 𝑥 3
𝐼 = 2,500.00 𝑃ℎ𝑝
Answer: Kyle earns P 2,250.00 at the end of 3 years.
 EXAMPLE 4:
A person borrows 4,000.00 Php
for a period of 6 years at 20 %
simple interest per annum.
Calculate:
1. The amount of interest payable
on the loan.
2. The total amount to be repaid.
 EXAMPLE 4:
1. Given: 6 years – time
4 ,000.00 Php – Principal
20 % or 0.20 – Rate of interest
Required: The amount of interest payable on the loan
Equation/Formula: 𝐼 = 𝑃 𝑥 𝑅 𝑥 𝑇
Solution:
𝐼=𝑃𝑥𝑅𝑥𝑇
𝐼 = 4,000.00 𝑥 0.20 𝑥 6
𝐼 = 4,800.00 𝑃ℎ𝑝
Answer: Interest payable is 4,800.00 Php
 EXAMPLE 4:
2. Given: 4 years – time
4,000.00 Php – Principal
20 % or 0.20 – Rate of interest
Required: The total amount to be repaid
Equation/Formula: s = 𝑃 (1 + 𝑅 𝑥 𝑇)
Solution:
S = 𝑃 (1 + 𝑅 𝑥 𝑇)
S = 4,000.00 (1 + 0.20 𝑥 6)
𝑆 = 8,800.00 𝑃ℎ𝑝

Answer: The person will pay a total amount of 8, 800.00 Php

 EXAMPLE 5:

An amount of 700.00 Php is

invested for 5 years. At the end of
this time the simple interest
amounts to 420.00 Php.Work out
the rate of simple interest.
 EXAMPLE 5:
Given: 5 years – time
700.00 Php – Principal
420.00 Php - Interest
Required: Rate of Interest
Equation/Formula: 𝐼 = 𝑃 𝑥 𝑅 𝑥 𝑇
Solution:
𝐼
since: 𝐼 = 𝑃 𝑥 𝑅 𝑥 𝑇 to find R: 𝑅 =
𝑃𝑥𝑇

420.00
𝑅= = 0.12
700.00 𝑥 5

Answer: Rate of interest is 12% or 0.12

 YOUR TURN:
1. Charlie invested an amount of 500.00 Php at
12 % per annum. Calculate:
a. The interest at the end of a year.
b. The interest earned at the end of 5 years.
2. Coraline invests 5,000.00 Php in an investment
fund for 3 years. At the end of the investment
period, her investment will be worth 6,125.00
Php. Determine the simple interest rate that
is offered.
 YOUR TURN:
1. a. Given: 1 year – time
500.00 Php – Principal
12 % or 0.12 – Rate of interest
Required: The amount of interest payable on the loan
Equation/Formula: 𝐼 = 𝑃 𝑥 𝑅 𝑥 𝑇
Solution:
𝐼=𝑃𝑥𝑅𝑥𝑇
𝐼 = 500.00 𝑥 0.12 𝑥 1
𝐼 = 60.00 𝑃ℎ𝑝
Answer: Interest payable is 60.00 Php

1.b
60.00 Php x 5 years = 300.00 Php (Interest earned after 5 years)
 YOUR TURN:
2.
Given: 3 years – time
5,000.00 Php – Principal
6,125.00 Php - Interest
Required: Rate of Interest
Equation/Formula: 𝐼 = 𝑃 𝑥 𝑅 𝑥 𝑇
Solution:
𝐼
since: 𝐼 = 𝑃 𝑥 𝑅 𝑥 𝑇 to find R: 𝑅 =
𝑃𝑥𝑇

5,000.00
𝑅= = 0.27 𝑥 100 = 27 %
6,125.00 𝑥 3

Answer: Rate of interest is 27 % or 0.27