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Simple Interests

The document provides information on simple interest, including definitions of key terms like principal, rate, and time. It presents the simple interest formula of I=Prt and the formula for calculating the maturity or future value. Examples are provided to demonstrate calculating simple interest for different time periods and rates.

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princessnylighte13
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41 views14 pages

Simple Interests

The document provides information on simple interest, including definitions of key terms like principal, rate, and time. It presents the simple interest formula of I=Prt and the formula for calculating the maturity or future value. Examples are provided to demonstrate calculating simple interest for different time periods and rates.

Uploaded by

princessnylighte13
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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Math of

Investment
Second Quarter
SIMPLE
INTERESTS
Second Quarter
Converting Percent to Decimal
A. Covert the following percentage B. Answer each of the following.
to decimal point.
1. What percent of 24 is 12?
1. 12%
2. 3% 2. What is 25% of 108?
3. 10% 3. 48 is what percent of 60? 30 is
4. 8.5% 40% of what number?
5. 200%
6. 0.75%

To convert a percent to decimal, drop the percent sign


and move the decimal point two places to the left.
Definition of Terms:
• SimpleInterest ( – interest that is computed on the principal. The interest
remains constant throughout the term.
• 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 loan is to be completely repaid.
Definition of Terms:
• 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 (P) – amount of money borrowed or invested on the origin date.
• 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 Values or Future Value (F) – amount after t years that the
lender receives from the borrower on the maturity date.
Simple Interest:

• Ischarged only on the loan called the principal.


Simple interest is calculated by multiplying the
principal by the rate (r) of the interest by the
number of payment periods in a year (t).
Simple Interest Formula:
1.) I = Prt

I
P r t (a)t

Where I = interest,
P = Principal,
r = rate of interest, and
t = time or term in years or fraction of a year
Formula for Maturity or Future Value of
Simple Interest
F=P+I
F = P + Prt
F = P ( I + rt)

Where F = Maturity or Future Value

P = Principal

I = Interest

r = rate

t = time
Example:

• Teresa borrowed ₱ 120,200.00 from her


uncle. If Teresa agreed to pay an 8%
annual interest rate, calculate the amount
of interest she must pay if the loan period
is (a) 1 year, (b) 9months, and (c)18
months.
• To buy the school supplies for the coming school
year, you get a summer job at a resort. Suppose
you save ₱4,200.00 of your salary and deposit it
into an account that earns simple interest. After 9
months, the balance is ₱4,263.00. What is the
annual interest rate?
•If Php. 10,000.00 is invested at
4.5% simple interest, how long will
it take to grow to Php. 11, 800.00?
When invested at an annual
interest rate of 7%, the amount
earned 11,200 of simple interest
in two years. How much money
was originally invested?
1.A bank offers 2% annual simple
interest rate for a particular deposit.
How much interest will be earned if
150,000 pesos is deposited in this
savings for 3 year?
Seatwork:
1. A bank offers 5% annual simple interest rate for a particular deposit.
How much interest will be earned if 150,000pesos is deposited in this
savings for 3 years?
2. How much interest is charged when 50,000 pesos is borrowed for
9months at an annual simple interest rate of 10%?
3. When invested at an annual interest rate of 8%, the amount earned
15,200 of simple interest in two years. How much money was
originally invested?
4. If an entrepreneur applies for a loan amounting to Php. 500,000 in a
bank, the simple interest of which is Php.157,500 for 3 years, what
interest rate is being charged?

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