Lhaurelyn Sombrio

GE 4 / 4:30-5:30 pm

Simple Interest
1. Jason takes a loan of $8,000 to buy a used truck at the rate of 9 % simple Interest. Calculate
the annual interest to be paid for the loan amount.
Solution:
P = $8,000
R = 9% or 0.09 expressed as a decimal.
T= 1
I=PxTxR
= 8,000 x 1 x 0.09
= 720.00
Annual Interest to be paid = $720
2. Logan invested Php.10,000 in a savings bank account that earned 2% simple interest. Find the
interest earned if the amount was kept in the bank for 4 years.
Solution:
Principle P = Php.10,000
T =4 years
Rate of Interest = 2% = 0.02
I = PX T X R
= 10,000 X 4 x 0.02
= Php. 800.00

Interest earned for the investment = Php800.00

3. Tiffany bought Php.15,000 from a bank to buy a car at 10% simple Interest. If she paid
Php9,000 as interest while clearing the loan, find the time for which the loan was given.
Solution:
Principle = Php.15,000
R = 10% = 0.10
Interest paid = I = Php 9,000
T is to be found.
T = I/(PR)
= 9000/(15,000 x 0.10)
= 6 years
The loan was given for 6 years

Compound Interest
1. Johnny deposit Php.4,000 with 6% of interest compounded quarterly, how much money will
be in the account after 5 years?

Solution:
P = 4000
r = 0.06
n=4
t=5
0.06
=4000 ⟦1 + ⟧ 4 (5)
4
20
= 4000(1.015)
= 4000(1.346855007)
Answer
= 5387.42
2. A deposit of Php.495.00 earns 3% interest compounded annually. How much money is in the
bank after for 3 years?

Solution:
= P( 1 + r)n
P = Php 495.00
r = 3%
n = 1 times 3 = 3

= 495( 1 + 3%)3 = 495(1 + 0.03)3 = 495(1.03)3

= 495(1.092727)
= 540.89
3. What is the value of an investment of Php.3,500 after 2 years if it earns 1.5% compounded
quarterly?
Solution:
t=2
r=0.015
m=4
P=3500
P(1+rm)mt
= 3500(1+0.015/4) 4×2
Answer ≈3606.39
The value after 2 years will be Php.3,606.39.