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Basic Business Mathematics: Simple Nterest

The document discusses the concept of simple interest in business mathematics. Simple interest is interest that is computed only on the principal amount and is calculated by multiplying the principal, interest rate, and time. Examples are provided to demonstrate how to calculate interest, maturity value, present value, and solve other problems involving simple interest.

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Jennifer Magango
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92 views12 pages

Basic Business Mathematics: Simple Nterest

The document discusses the concept of simple interest in business mathematics. Simple interest is interest that is computed only on the principal amount and is calculated by multiplying the principal, interest rate, and time. Examples are provided to demonstrate how to calculate interest, maturity value, present value, and solve other problems involving simple interest.

Uploaded by

Jennifer Magango
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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BASIC

BUSINESS
MATHEMATICS
SIMPLE NTEREST
OBJECTIVES
• Illustrate simple interest.
• Compute interest, maturity value and
present value in simple interest.
• Solve problems involving simple
interest
LET’s PRACTICE
• Change the following numbers to the indicated
form.
Percent Decimal Fraction
45%
0.034
0.25%
3
8
6.2
One of the useful applications of
mathematics in real-life is in
business.

Money is valued, invested or


borrowed and in turn gains interest .
INTEREST
The concept of computing interest was
already being practiced since the
ancient Babylonian mathematicians
created tables of numbers.
They used the tables to determine how
long it would take to double one’s
money at a particular interest rate.
INTEREST
The sum of money paid for the use of
money.
The interest earned on a deposit or loan
depends on three (3) factors.
P (principal), r (rate of interest), t (time).

𝑰𝒔 = 𝑷𝒓𝒕
INTEREST
When money is deposited or
borrowed, the total amount of
money at the end of the transaction
period is called the FINAL AMOUNT.
𝑭 = 𝑷+ 𝑰𝒔
The final amount is equal to the sum of the
principal and the interest.
INTEREST
When interest on a deposit or loan is
computed once for the full term of
the loan, it is called
SIMPLE INTEREST.

The time of deposit or loan or investment


must always be expressed in years.
EXAMPLE
• Yuan deposited 5, 000 pesos in a
bank paying 9% simple interest for
3 years. How much would he have
on his account at the end of 3 years,
assuming that no withdrawal has
been made?
EXAMPLE
• Brando borrowed 15, 000 pesos from a
bank charging 7% simple interest with
an agreement that he would pay the
principal and the interest at the end of
the term. How long did he use the
money if he paid 17, 000 pesos?
ACTIVITY
1. Julius paid an interest of 5,000 pesos on a 3-
year loan at 8% simple interest.
a) What was the original loan?
b) How much did he pay at the end of 3 years?
2. How long in years will it take for 40, 000 pesos to
amount to 75,000 pesos at 6.5% simple interest.
3. A man borrowed 25, 000 pesos from a credit
union. If the interest is 920 pesos for 9 months,
what is the rate of interest?
Add a Slide Title -
5

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