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SIMPLE
TOPIC: INTEREST

Prepared by:
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Angana, Kissy Lovell Mae

CLASS MASTER 11/23/21
 TEAM TEAM TEAM TEAM
1 2 3 4

TEAM
5
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QUESTION 1:
TRUE/FALSE. When the time given in a simple
THEORY interest problem is between two dates, there are two
PROBLEM
methods to compute the days for the numerator and
the denominator; these are Approximate interest
method and Exact or actual time method.
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ANSWER:
FALSE. When the time given in a simple interest
THEORY problem is between two dates, there are two methods
PROBLEM
to compute the days for the numerator and the
denominator; these are Approximate interest method
and Exact or actual time method.
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QUESTION 2:
THEORY
PROBLEM
In measuring time, when do we use 360 days and
365 days in one year?
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ANSWER:
THEORY
- The ordinary method of computing interest uses 360
PROBLEM days in a year.
- The exact interest method adopts 365 days in a year.
But in a leap year, it uses 366 days.
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QUESTION 3:
THEORY
PROBLEM
TRUE/FALSE. If a known amount in the past is
subject to the time value of money, the maturity
value is to be calculated.
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ANSWER:
THEORY
PROBLEM
TRUE. If a known amount in the past is subject to
the time value of money, the maturity value is to be
calculated.
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QUESTION 4:
On April 15, 2021, Jakie borrowed P100,000 from ASPAC Bank at
10% interest rate. The loan is payable on September 10, 2021. Compute
the simple interest using ordinary interest method using exact or actual
PRACTICAL
time.
PROBLEM

Exact time: Approximate time:

April (31-15) = 16 days April (30-15) = 15 days
May = 31 days May = 30 days
June = 30 days June = 30 days
July = 31 days July = 30 days
August = 31 days August = 30 days
September = 10 days September = 10 days
Exact time = 149 days Approximate time = 145 days
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ANSWER:
PRACTICAL
PROBLEM
Ordinary interest method using exact or actual time:
I = 100,000 x 10% x 149/360
I =P 4,138.89
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QUESTION 5:
Find the sum of money that amounts to P992 in 4
PRACTICAL
years at 5% per annum.
PROBLEM GIVEN:
M=P992
R=5% or 0.05
T=4 years
P=?
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ANSWER:
M = P(1+ RT)
PRACTICAL
PROBLEM 992 = P (1 + (0.05)(4)
992 = P (1.2)
992/1.2 = P826.67
P = P826.67
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QUESTION 6:
Thano's father had borrowed 1,000 from the bank
PRACTICAL
and the rate of interest was 5%. What would the
PROBLEM simple interest be if the amount is borrowed for 1
year? Similarly, calculate the simple interest if the
amount is borrowed for 2 years, 3 years, and 10
years?
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ANSWER:
PRACTICAL • 1 Year S.I = PxRxT • 3 Year S.I = PxRxT
PROBLEM =1,000 ×5% × 1 =1,000 ×5 %× 3
= P 50.00 = P 150.00

• 2 Year S.I = PxRxT • 10 Year S.I = PxRxT

=1,000 × 5 %× 2 =1,000 × 5% × 10
= P 100.00 = P 500.00
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QUESTION 7:
THEORY
PROBLEM TRUE/FALSE. Before you can calculate interest,
your time must be in months.
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ANSWER:
THEORY
TRUE. Before you can calculate interest, your
PROBLEM time must be in months.
-In computing the interest, you can use the time
either 1 year or 12 months.
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QUESTION 8:
THEORY
PROBLEM Define interest rate.
NOTE: Use a maximum of two sentences for your
answer.
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ANSWER:
THEORY
Definition of Interest:
PROBLEM Interest refers to the money individuals and
businesses are charged for borrowing a given
amount of money. It appears as an additional
amount of the money loaned.
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QUESTION 9:
THEORY TRUE/FALSE. The time element in simple
PROBLEM
interest is computed by dividing the interest with
the product of the principal and the rate.
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ANSWER:
THEORY
TRUE. The time element in simple interest is
PROBLEM computed by dividing the interest with the product
of the principal and the rate.
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QUESTION 10:
PRACTICAL
On January 1, 2012 Monica borrowed 500,000
PROBLEM from Bogo SVF Lending at 7% interest, payable 1
year.
Question: Is the problem a simple interest?
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ANSWER:
PRACTICAL Yes, since it can be observed that 7% interest is
PROBLEM
payable only once from the time of borrowing up
to maturity date.
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QUESTION 11:
PRACTICAL
On January 1, 2012 Monica borrowed 500,000
PROBLEM from Bogo SVF Lending at 7% interest, payable 1
year.
Find the simple interest.
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ANSWER:
PRACTICAL I=P x R x T
PROBLEM
= (500,000 x 0.07 x 1)
I= 35,000
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QUESTION 12:
A sum of money triples itself in 12 years at simple
PRACTICAL
PROBLEM interest. Find the rate of interest?
A. 12 1/2%
B. 14 4/7%
C. 15 2/3%
D. 16 2/3%
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ANSWER:
Let the Principal be Rs. x, then amount = 3x
PRACTICAL
(where R = rate of interest)
PROBLEM

Solution:
Interest = 3x - x = Rs. 2x
R = (100 * 2x) / (x * 12)
= 50/3 %
= 16 2/3% D. 16 2/3%
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QUESTION 13:
THEORY
PROBLEM
IDENTIFICATION. It is considered economic or
financial in character if there is a monetary value
involved in the exchange.
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ANSWER:
THEORY
PROBLEM
Transaction - It is considered economic or
financial in character if there is a monetary value
involved in the exchange.
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QUESTION 14:
THEORY
PROBLEM
What are the difference between Ordinary and
Exact Interest methods?
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ANSWER:
The difference between Ordinary Interest and
THEORY
PROBLEM Exact Interest Method is the denominator used in
the same element of the interest formula. Another
salient difference is that the amount of simple
interest using the ordinary interest method is
higher compared to exact interest method.
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QUESTION 15:
THEORY
PROBLEM
When the time given in the problem is expressed
in number of days but the interest rate is expressed
in percent per year. What methods should be used
to determine the interest?
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ANSWER:
Ordinary and Exact Interest Methods -methods
THEORY
PROBLEM should be used to determine the interest when the
time given in the problem is expressed in number
of days but the interest rate is expressed in percent
per year
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QUESTION 16:
On January 1, 2021, Morris borrowed a sum of money from
Community Bank, payable for 3 year at 8% simple interest.
PRACTICAL
PROBLEM She paid P12,000 for the interest of her loan. How much is the
principal amount borrowed by Morris?
Solution:
I= P12,000
R= 8% or 0.08
T=3 years
P=?
P= P50,000
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ANSWER:
�
THEORY �=
PROBLEM ���
6,000
=
0.08 � 3
P =P50,000 is the principal amount borrowed
by Morris
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QUESTION 17:
On December 1, 2021, Regine deposited P800,000 at
Community Bank. The deposit earned simple interest of
PRACTICAL
PROBLEM P560,000 for 5 years. Compute the rate of simple interest
deposit.
Solution:
P = P800,000
I = P560,000
T = 5 years
R=?
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ANSWER:
THEORY �
PROBLEM �=
���
560,000
=
800,000 � 5
R = 0.14 or 14%
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QUESTION 18:
6.When Josieme bought a new office phone, she borrowed
PRACTICAL
PROBLEM
P1,200 at a rate of 18% for 9 months. How much interest did
she pay?
Given:
P = P1,200
R = 18% or 0.18
T = 9 months or 0.75
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ANSWER:
(Solution for Time:) To get the time in years we
THEORY represent 9 months as 9/12 of a year, or 0.75.
PROBLEM

I=PxRxT
= (1200)(0.18)(0.75)
I = 162.00
Josieme paid P162.00 in interest.
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QUESTION 19:
THEORY
PROBLEM
IDENTIFICATION. The amount of money charged
to the borrower for the use of money.
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ANSWER:
THEORY
PROBLEM
Interest - The amount of money charged to the
borrower for the use of money.
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QUESTION 20:
THEORY
PROBLEM
IDENTIFICATION. The initial amount of money
deposited or borrowed.
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ANSWER:
THEORY
PROBLEM
Principal - The initial amount of money
deposited or borrowed.
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QUESTION 21:
THEORY
PROBLEM
IDENTIFICATION. In this method, it is assumed
that there are 30 days in each month.
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ANSWER:
THEORY Approximate Time Method- this method
PROBLEM
assumed that there are 30 days in each month.
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QUESTION 22:
Find the simple interest if:
PRACTICAL
PROBLEM P = Php 150
R = 15%
T = 18 months
I=?
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ANSWER:
PRACTICAL I = PRT
PROBLEM
= (150)(.18)(1.5)
= Php 33.75 in 1.5 years
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QUESTION 23:
Calculate for the time if:
PRACTICAL
PROBLEM P = Php 15,000
R = 10%
I = Php 9,000
T=?
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ANSWER:
�
PRACTICAL � =
PROBLEM
���
�,���
T =
(��,���)(�.��)
�,���
T=
�,���

T = 6 years
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QUESTION 24:
Jaz deposited Php 10000 for 4 year at a rate of 6%
PRACTICAL
per annum. Find the interest and amount Jaz got.
PROBLEM

Given:
Principal (P) = Php 10000
Time (T) = 4 years
Rate (R) = 6% per annum
Interest ( I ) = ?
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ANSWER:
Given:
Principal (P) = Php 10000
Time (T) = 4 years
PRACTICAL
PROBLEM
Rate (R) = 6% per annum
Interest ( I ) = ?

I = PRT
= (10,000)(6%)(4)
I= Php 2,400
For the amount:
P = 10,000 I = 2,400 P + I 10,000 + 2,400 = Php 12,400
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QUESTION 25:
THEORY
PROBLEM IDENTIFICATION. The sum of the principal
and interest due is called?
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ANSWER:
THEORY
PROBLEM
Amount or Accumulated Value. It is sum of
the principal and interest due.
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QUESTION 26:
THEORY
PROBLEM IDENTIFICATION. This could be a bank that
borrows and lends money to profit on the
difference in interest rates.
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ANSWER:
THEORY
PROBLEM
Financial Institution. This could be a bank that
borrows and lends money to profit on the
difference in interest rates.
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QUESTION 27:
THEORY
PROBLEM IDENTIFICATION. The period that money is
lent to someone or is borrowed from?
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ANSWER:
THEORY
PROBLEM
Time. The period that money is lent to someone
or is borrowed from.
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QUESTION 28:
PRACTICAL
Ariel takes a loan of P8,000 to buy a used truck at
PROBLEM the rate of 9 % simple Interest. Calculate the
annual interest to be paid for the loan amount.
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ANSWER:
Given in the problem:
PRACTICAL
P = P8,000
PROBLEM R = 9% or 0.09 expressed as a decimal.
T =1 year

SOLUTION:
I =PxRxT
= P8,000 x 0.09 x 1
I = P720.00
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QUESTION 29:
PRACTICAL
Luna wants to borrow money from her mother, and
PROBLEM she is offered a five-year, non-compounding loan
of P7,000, with a 3% annual interest rate. What is
Luna’s total interest expense?
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ANSWER:
Given in the problem:
PRACTICAL
P = P7,000
PROBLEM R = 3% or 0.03 expressed as a decimal.
T = 5 years

SOLUTION:
I=PxTxR
I = P7,000 x 0.03 x 5 I
I= P1,050
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QUESTION 30:
PRACTICAL
Mr. Sherlock plans to place his money in a
PROBLEM certificate of deposit that matures in three months.
The principal is P10,000 and 5% interest is earned
annually. He wants to calculate how much interest
he will earn in those three months.
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ANSWER:
Given in the problem
PRACTICAL
P = P10,000
PROBLEM R = 5% or 0.05 expressed as a decimal.
T = 3/12 of a year

Solution:
I=PxRxT
I = P10,000 x 0.05 x 3/12
I = P125
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TH=AT’

ALL
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