GENERAL MATHEMATICS-11

SIMPLE INTEREST
GENERAL MATHEMATICS-11
Quarter 2-Week 6

SOLOMON D. NAGANAG
Content Standards: The learner demonstrates understanding of key concepts
of simple and compound interests, and simple and general annuities.

Performance Standards: The learner is able to investigate, analyze

and solve problems involving simple and compound interests and simple and
general annuities using appropriate business and financial instruments.

Learning Competency
The learner:
•define simple interest;
•compute simple interest, maturity value and present value; and,
•solve problems involving simple interest.
CLASSROOM RULES:
a.Ask questions
b.Respect and listen to your classmates
c.Respect and listen to the teacher
d.Raise your hand to speak
e.Maintain minimum health protocol to prevent the spread of Covid19 Virus.
f.Put your cellphone in a silent mode.
g.Participate
h.Be quiet when the teacher is talking
i.Be quiet when classmates are talking
j.Share new ideas
k.Keep your hands to yourself
l.Respect others’ property
m.Keep your workspace tidy
n.Be kind
o.Always do your best
 On the previous topics, the basic concepts on
functions were introduced. Functions were used
as mathematical models. These are abstract
models that use mathematical language to
describe relationships. With the notion of
mathematical modeling, mathematics is
concerned not only with the measures of the
physical world but it has also expanded its
applicability to sciences, both social and
biological, business, and finance. So with this,
lessons relating to business and finance will then
be introduced specifically on simple interest.
A debtor pays the bank an amount which
is more than the amount he borrowed. An
investor may withdraw from the bank
more than the amount deposited. This
additional
interest sum is called __________.
Definition of terms:
•Lender or creditor – person (or institution) who invests the money or makes
the funds available.
•Borrower or debtor – person (or institution) who owes the money or avails of
the funds from the lender.
•Origin or loan date – date on which money is received by the borrower.
•Repayment date or maturity date – date on which the money borrowed or
loaned is to be completely repaid.
•Time or term (t) – amount of time in years the money is borrowed or invested;
length of time between the origin and maturity dates.
•Principal or present value (P) – amount of money borrowed or invested on
the origin date.
•Rate of interest or simply rate (r) – annual rate, usually in percent, charged
by the lender, or rate of increase of the investment.
•Interest (I) – amount paid or earned for the use of money.
•Maturity Value or Future Value (F) – amount after t years that the lender
receives from the borrower on the maturity date; equal to the sum of principal and
the interest earned.
Simple Interest (Is)
For every financial transaction, whether you borrowed or invested a certain
amount P, a corresponding percentage of the principal called interest is being
paid. Simple Interest (Is) is the interest charged on the principal alone for
the entire duration or period t of the loan or investment, at a particular rate r.
After the term of the loan or investment, the maturity value or future value F
is computed by getting the sum of the principal and the interest due.

Relating the terms used from the definition of simple interest to

Entrepreneurship, we can see the similarities below

Simple Interest Entrepreneurship

Invested Asset

Deposit Debit

Borrowed Credit

Present Value Principal

Formulas:
1. 𝑰𝒔=𝑷𝒓𝒕
2. 𝑭=𝑷+𝑰𝒔 or 𝑭=𝑷+𝑷𝒓𝒕 or 𝑭=𝑷(𝟏+𝒓𝒕)
3. 𝑷=𝑰𝒔/𝒓𝒕 or 𝑷=𝑭−𝑰𝒔
4. 𝒕=𝑰𝒔/𝑷𝒓
5. 𝒓=𝑰𝒔/𝑷𝒕
 
• ***where 𝐼𝑠− simple interest
• 𝑃− principal
• 𝑟− rate of interest or simply rate
• 𝑡− time (in year)
• 𝐹− future value (or maturity value)
• Note: If the given time is in months, it can be
converted to year(s) by using the formula
𝑡= 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑚𝑜𝑛𝑡ℎs
12
Let us compute simple interest..

Directions: Complete the table below by solving the

unknown quantities in each row.

Simple Future
Principal(P) Rate(r) Time(t) 
Interest(Is) Value(F)

1.) ₱500,000.00 12.5% 10 years  

2.) 2.5% 4 years ₱1,500.00  

3.) ₱36,000.00   1.6 year ₱4,860.00  

 
4.) ₱250,000.00 0.5% ₱1,400.00
   
5.) ₱10,000.00 4% 5 months
 
Before we solve the unknown quantities, it is important for us to recall
your basic skill in evaluating algebraic expressions. Solving for the
unknown quantities in simple interest is a little similar to the steps in
evaluating algebraic expressions. To evaluate algebraic expression:
1. Replacing the variable by the given number value(Substitution
Property of Equality) and
2. Performing the indicated arithmetic following the order of
operations.

Ex: x=3, evaluate 8(2+5) – x

8(2+5) – x
8(2+5) – 3
8(7) -3
56 – 3
53
Solution:
1.) Given: P = ₱500,000.00 ; r = 12.5% or 0.125 ; t = 10 years

𝐼𝑠=𝑃𝑟𝑡 𝐹= 𝑃+ 𝐼𝑠
𝐼𝑠=₱500,000.00(0.125)(10) 𝐹=₱500,000.00 +₱625,000.00
𝑰𝒔=₱𝟔𝟐𝟓,𝟎𝟎𝟎.𝟎𝟎 𝑭=₱𝟏,𝟏𝟐𝟓,𝟎𝟎𝟎.𝟎𝟎
2.) Given: r = 2.5% or 0.025 ; t = 4 years ; 𝐼𝑠 = ₱1,500.00
 
𝑃= 𝐹=𝑃+𝐼𝑠
𝑃= 𝐹=₱15,000.00+₱1,500.00
𝑷=₱𝟏𝟓,𝟎𝟎𝟎.𝟎𝟎 𝑭=₱𝟏𝟔,𝟓𝟎𝟎.𝟎𝟎

3.) Given: P = ₱36,000.00 ; t = 1 years or 1.5 years ; 𝐼𝑠 = ₱4,860.00

 
𝑟= 𝐹=𝑃+𝐼𝑠
𝑟= 𝐹=₱36,000.00 +₱4,860.00
𝒓=𝟎.𝟎𝟗 or 9% 𝑭=₱𝟒𝟎,𝟖𝟔𝟎.𝟎𝟎
4.) Given: P = ₱250,000.00 ; r = 0.5% or 0.005 ;
𝐼𝑠 = ₱1,400.00
 
𝑡= 𝐹=𝑃+𝐼𝑠
𝑡= 𝐹=₱250,000.00 +₱1,400.00
𝒕=𝟏.𝟏𝟐 years 𝑭=₱𝟐𝟓𝟏,𝟒𝟎𝟎.𝟎𝟎

5.) Given: P = ₱10,000.00 ; r = 4% or 0.04 ; t =

 
𝐼𝑠=𝑃𝑟𝑡 𝐹=𝑃+𝐼𝑠
𝐼𝑠=₱10,000.00 (0.04)(512) 𝐹=₱10,000.00 +₱166.67
𝑰𝒔=₱𝟏𝟔𝟔.𝟔𝟕 𝑭=₱𝟏𝟎,𝟏𝟔𝟔.𝟔𝟕
 Simple
Principal(P) Rate(r) Future Value(F)
Time(t)  Interest(Is)

1.) ₱500,000.00 12.5% 10 years ₱𝟔𝟐𝟓,𝟎𝟎𝟎.𝟎𝟎   ₱𝟏,𝟏𝟐𝟓,𝟎𝟎𝟎.𝟎

2.) 𝟏𝟓,𝟎𝟎𝟎.𝟎𝟎 2.5% 4 years ₱1,500.00  ₱𝟏𝟔,𝟓𝟎𝟎.𝟎𝟎

3.) ₱36,000.00  9% 1.6 year ₱4,860.00  ₱𝟒𝟎,𝟖𝟔𝟎.𝟎𝟎

4.) ₱250,000.00 0.5% 𝟏.𝟏𝟐 years ₱1,400.00  ₱𝟐𝟓𝟏,𝟒𝟎𝟎.𝟎𝟎

5.) ₱10,000.00 4% 5 months  ₱𝟏𝟔𝟔.𝟔𝟕  ₱𝟏𝟎,𝟏𝟔𝟔.𝟔𝟕

 
 Problems Involving Simple Interest

1. A bank offers 1.5% annual simple interest rate for a particular

deposit. How much interest will be earned if 1 million pesos is
deposited in this savings account for 1 year?
Solution:

Given: r = 1.5% or 0.015 ; P = ₱1,000,000.00 ; t = 1 year

𝐼𝑠=𝑃𝑟𝑡
𝐼𝑠=₱1,000,000.00 (0.015)(1)
𝑰𝒔=₱𝟏𝟓,𝟎𝟎𝟎.00

Therefore, an interest amounting to ₱15,000.00 will be earned if 1

million pesos is deposited in a savings account for 1 year with 1.5%
annual simple interest rate. 7
2. When invested at an annual interest rate of 7%, the
amount earned ₱11,200.00 of simple interest in 2.5 years.
How much money was originally invested?
 
Solution:
Given: r = 7% or 0.07 ; 𝐼𝑠 = ₱11,200.00 ; t = 2.5 years
𝑃=
𝑃=
𝑷 = ₱64,000.00

Therefore, the amount of money originally invested was

₱64,000.00.
3. Ricky borrowed ₱25,000.00 and paid ₱1,250.00 interest for
6 months. What was the rate of interest?
 
Solution:
Given: P = ₱25,000.00 ; 𝐼𝑠 = ₱1,250.00 ; t = year or 0.5 year
𝑟=
𝑟=
𝒓= 0.1 or 10%
4.How long in years will it take for ₱17,300.00 to amount to
₱20,000.00 at 11.25% simple interest?

Solution:
Given: P = ₱17,300.00 ; F = ₱20,000.00 ; r = 11.25% or 0.1125
𝐼𝑠 = 𝐹−𝑃
𝐼𝑠 = ₱20,000.00−₱17,300.00
𝐼𝑠 = ₱2,700
 
𝑡=
𝑡=
𝒕=𝟏.𝟑𝟗 years
 Investing money with a certain
interest rate is a gain while availing
money with certain interest rate is a
loss.
How did the native farmers
of Kalinga used the basic
concepts of simple interest
in their source of living?
One of the native practices in some areas of our
Province is the “Pa-irikan” system of Farming.
How is “Pa-irikan System” related to our topic?
-Pa-irikan system is paying the interest of
certain amount of borrowed money with “irik”.
Irik in English is unhusked rice.
-According to some local farmers in our place,
the interest rate of ₱10,000.00 at present is 3
sacks of unhusked rice after every harvest.
Example:
1. Banna borrowed ₱30,000.00 from his friend
Lagunnawa to run 3 Banongs of rice field. Following
the present interest rate of “Pa-irikan” system, how
many sacks of unhusked rice is he going to give to
Lagunnawa after harvest?
Solution:
3 sacks every 10, 000 - rate
30,000 – Borrowed Money (Principal)
Is = (3)
=(3)
=3(3)
=9
Banna will be giving Lagunnawa 9 sacks of unhusked
rice after harvest.
“Two on Two”
Direction: I`m going to group you by twos. From the set of problems
below, choose two problems then solve on a 1/2 crosswise of pad
paper. Show your complete solution.

1. Find the simple interest on a loan of ₱65,000.00 if the loan is

given at a rate of 2% and is due in 5 years and 3 months?
2. How much money will you have after 4 years if you deposited
₱10,000.00 in a bank that pays 6% simple interest?  
3. How long will an amount of money triple at a simple interest
rate of 1% per annum?
4. At what simple interest rate per annum will ₱20, 000
accumulate to ₱25, 000 in 3 years?
5. How much should you invest at 6% annual interest rate to
obtain a simple interest of ₱72, 000 in 3 years?
Matching Type: At the back of your ½ c.w., match column A with column B.
Write the letter of your answer on the space before each item.

____1. Borrower a. Maturity Date

____2. Principal b. Term
____3. Maturity Value c. Debtor
____4. Repayment Date d. Future Value
____5. Time e. Present Value
ASSIGNMENT: Write 2 similarities and 2 differences
between Simple Interest and Compound Interest.