Good Afternoon!!!

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ARET
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EM I T
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SINEETR
T
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C PAI R N I
LP
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WRBORORE
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DERNLE
Scenario: You want to invest Php 50,000
in the Bank.

If Bank A will offers 3% simple interest

rate for 5 years while Bank B offers 5%
simple interest rate for 3 years, which
bank would you invest?
SIMPLE INTEREST
At the end of the lesson the students are
expected to:

1. Defined and illustrated simple in-

terests.
M11GM-IIa-1;
 Definition of terms
Interest - is a paid premium for
the use of capital

Simple Interest - interest

calculated on principal
 Definition of terms
Borrower or Debtor – person or an institution that owes the
money or avails of the funds from the lender.
Lender or Creditor – person (or institution) who invests the
money or makes funds available.
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
Time – amount of time in years the money is borrowed.
Activity 1 : Who am i?
1. A cooperative Bank offers 0.50% of
annual simple interest rate for a savings
account. How much interest will be earned
if Php 500,000 pesos is deposited for 2
years ?
ANS : INTEREST
Activity 1 : Who am i?

2. How much money will be invested

by Mrs. King if she earned an amount
of Php 15,500 at an annual simple
interest of 5% in two years

ANS : PRINCIPAL
Activity 1 : Who am i?
3. What interest rate is being charged to a
businessman that applies for a loan with an
amount of Php 250,000 in a bank with a
simple interest of Php 75,000 for 3 years?

ANS : RATE
Activity 1 : Who am i?
4. If Mr. Miguel is planning to lend money
from a lending institution with an amount
of Php 500,00 at a simple interest of 5%
that charges 125,000. How long will Mr.
Miguel pay the said loan in years?
ANS : TIME
Answer Me:
1. A cooperative Bank offers 0.50% of
annual simple interest rate for a savings
account. How much interest will be earned
if Php 500,000 pesos is deposited for 2
years ?
Answer Me:

2. How much money will be invested

by Mrs. King if she earned an amount
of Php 15,500 at an annual simple
interest of 5% in two years
Answer Me:
3. What interest rate is being charged to a
businessman that applies for a loan with an
amount of Php 250,000 in a bank with a
simple interest of Php 75,000 for 3 years?
Answer Me:
4. If Mr. Miguel is planning to lend money
from a lending institution with an amount
of Php 500,00 at a simple interest of 5%
that charges 125,000. How long will Mr.
Miguel pay the said loan in years?
HAVE A GOOD DAY
AND
GOD BLESS!!!
Maturity value / future value (F)
Maturity value or future value F is the total
amount of money in a savings account after
number of years t at an interest rate r , in
which many lending institutions are willing
to know that a lender or creditor will give to
the borrower or debtor on the maturity date/
future value
Maturity value / future value (F)
F = P (1 + r t) F = P + Is

Where F = Maturity (future) Where

value
P = Principal F = Maturity value
r = Annual simple interest rate P = Principal
t = Term / Time in years Is = Simple interest
Solve the ff:
1.) If Php 1.5 M is deposited by Mr. Dela
Cruz in a bank. Find the maturity value with
an annual simple interest rate of 0.20%
after 4 years?
Solution:
Given: P = 1.5 M r = 0.20% = 0.002
t = 4 years Find: F
Solution 1:
F = P (1+ r t)
= (1,500,000) {1 +(0.002)(4)}
= (1,500,000)(1.008)
= 1,512,000
Solution 2:
Is = P r t
= (1,500,000) (0.002) (4)
= 12,000

then, F = P + IS
= (1,500,000) (12,000)
= 1,512,000
Solve the ff:
a.) Find the interest and
maturity value of a loan for
120,000 at 4.5% simple interest
for 2 years.
Compound Interest
Compound Interest – interest
calculated on the sum of an
original principal plus accrued
interest
Conversion or Interest Period – successive
conversions of interest between time

Frequency of Conversion – refers to the

number of conversion periods in a year
Maturity date – a date on which the money
borrowed or loan is to be completely repaid
Nominal rate – interest rate annually
1. Suppose Php 25,000 is compounded an-
nually at an interest rate of 4% in 4 years-
Find the maturity value and the compound
interest.
Given : P = 25,000 r = 4% = 0.04 t = 4 years
a.) Maturity value F
b.) Compound Interest IC
2. If Mr. Perez deposited in his bank ac-
count an amount of Php 50,000 at an an-
nual interest rate of 0.4% compounded
yearly.
How much amount of money will Mr.Perez
have in his bank account after 15 years?

Given : P = 50,000 r = 0.4% = 0.004

t = 15 years
PRESENT VALUE
1. Find the present value of Php 70,000 at
6% compounded annually that will due for
10 years?

Given : P = 70,000 r = 6% = 0.06

t = 10 years

Find : P
2. Suppose a businessman place his money
in a time deposit in a bank compounded
annually that pays 0.8%. How much money
should the businessman deposit so that he
will have Php 250,000 after 5 years?

Given: F = 250,000 r = 0.8% = 0.008

t = 5 years
Find : P
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PT # 1 – ONE WHOLE
a.) How much should Mr. and Mrs. Reyes deposit
if they want to have Php 800,000 that will be used
for their son’s college education after graduating
senior high school at age 17 years old. If Mr. and
Mrs. Reyes will deposit the said amount in a bank
that pays 1.2% interest compounded annually at
the time when their son’s age is 5 years old?
PT # 1 – ONE WHOLE
b.) If Mrs. Cruz invested Php 120,000 in a
time deposit that pays 0.7% compounded
interest in a year
a.)How much interest will Mrs. Cruz gain

b. how much will be her money after 15

years?