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Quarter 2 – Week 1
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Introductory Message
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Let’s Learn
This module was prepared and written to help you achieve the required competency.
This will be the source of information for you to acquire knowledge and skills in this craft, with
minimum supervision or help from your teacher. With the aid of this material, you will acquire
the competency independently and at your own pace.
Let’s Try
Directions: Read and analyze each item carefully. Choose the best answer.
1. This refers to the interest charged on the principal alone for the entire length of the loan
or investment.
A. Compound amount C. Present value
B. Compound interest D. Simple interest
2. This refers to an individual or institution that invests or borrows money for any purpose.
A. Creditor B. Debtor C. Lender D. Principal
3. What is the formula in computing the simple interest on a given financial transaction?
𝑃 𝑟
A. 𝐼𝑠 = 𝑃𝑟𝑡 B. 𝐼𝑠 = 𝑃𝑟 2 𝑡 C. 𝐼𝑠 = D. 𝐼𝑠 =
𝑟𝑡 𝑃𝑡
4. 30 months is equivalent to
A. 2.5 years B. 2.75 years C. 3 years D. 3.25 years
5. How much is the simple interest on this financial transaction, P = ₱5,000.00, r = 6%, and t
= 2 years?
A. ₱ 6,000.00 B. ₱ 1,200.00 C. ₱ 600.00 D. ₱ 120.00
6. Determine the simple interest to be paid by Mr. Santiago if she borrowed ₱ 2,345.00 at
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3 % for 10 months.
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A. ₱ 26.35 B. ₱ 62.53 C. ₱ 65.32 D. ₱ 67.25
7. How much was borrowed by Lucas Manalo if the interest he paid after 9 months at
12.25% simple interest is Php 2,468.00?
A. ₱28,266.59 B. ₱26,268.95 C. ₱22,686.95 D. ₱26,862.59
8. At what rate of interest did Jersey invest the amount of ₱24,500.00 for it to earn a simple
interest of ₱ 4,545.00 for 3.5 years?
A. 3.5% B. 4.5% C. 5.3% D. 5.5%
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9. How long should Miss Park invest the amount of ₱85,430.00 to earn an interest of
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₱ 5,555.00 at 3 % simple interest?
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A. 1.5 years B. 2 years C. 2.5 years D. 3 years
10. How much is the total amount Ms. Maxine will receive if she invests ₱123,450.00 for
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3.25 years at 2 % simple interest?
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A. ₱134,483.34 B. ₱143,384.34 C. ₱144,834.43 D. ₱148,343.43
11. Which of the following are NOT true?
I. Principal is the money borrowed or invested on the origin date.
II. Origin date is a date on which money is paid by the borrower.
III. Interest is an amount paid or earned for the use of money.
IV. Simple interest is an interest that is computed on the principal and then subtracted
to it.
A. I and II B. II and III C. III and IV D. II and IV
12. How much money will Miss Jermaezhen receive after 5 years if she deposited
₱20,000.00 in a bank that pays 7% simple interest?
A. ₱27,000.00 B. ₱37,000.00 C. ₱47,000.00 D. ₱57,000.00
13. How much was the interest if Harry borrowed ₱45,000.00 and paid a total of ₱55,500.00
at the end of the term?
A. ₱10,500.00 B. ₱11,500.00 C. ₱12,500.00 D. ₱13,500.00
14. An interest of ₱760.00 was earned on an investment for 9 months at 3% interest rate.
How much was invested?
A. ₱2,052.00 B. ₱2,814.81 C. ₱20,520.00 D. ₱33,777.78
15. At what simple interest rate was ₱18,350.00 invested if it earned ₱1,025.00 interest for
1.5 years?
A. 0.0372% B. 0.1193% C. 3.72% D. 11.93%
There are many applications of Mathematics in real-life. One of the most practical
applications is in business. Lending or borrowing money is one of the concerns of most people.
Will their money earn interest? Will they be able to wait long enough to obtain the amount that
they desire? With sufficient understanding of the concepts of simple and compound interests,
these questions can be answered.
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Let’s Recall
Activity 1
A. Express each as a decimal.
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1. 15% = _____ 3. 8 % = _____ 5. 200% = _____
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2. 3% = _____ 4. 10.5% = _____ 6. 0.75% = _____
B. Answer each.
Let’s Explore
Your parents want to buy a laptop for you to use during online classes, but they don’t have
enough savings to pay for it. How can your parents buy the laptop?
Let’s Elaborate
Borrowing and lending are two sides of the same transaction. To the lender, a loan
represents an investment in a debt obligation. When you borrow money, you are charged an
interest on the amount you borrowed. When you invest or saved money in the bank, you are
being paid interest by the bank.
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Since borrowing, and lending are so central to our daily lives and in the economic
system, it is essential to familiarize with the definition of terms and learn the computation of
interest in borrowing/lending transactions.
Definition of Terms
❖ Debtor or Maker – an individual or institution that borrows money for any purpose
❖ Lender or Creditor – an individual or financial institution which loans the money
❖ Interest (I) – the payment for the use of borrowed money or the amount earned on
invested money
❖ Principal or Present value (P) – the capital or sum of money borrowed or invested
– is also called the face value or the present value of the loan
❖ Rate of Interest (r) – this is a fractional part of the principal that is paid on the loan or
investment which is usually expressed as percent
❖ 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 loaned is
to be completely repaid.
❖ Time or Term (t) – the number of years for which money is borrowed or invested
❖ Maturity Value or Future Value (F) – the sum of the principal and the interest
accumulated over a certain period
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Example
Directions: Complete the table below by solving the unknown quantities in each row.
5. ₱25,000.00 5% 9 months
Solution:
Is = Prt F = P + Is
Is = ₱600,000.00(0.135) (12) F = ₱600,000.00 + ₱972,000.00
Is = ₱972,000.00 F = ₱1,572,000.00
𝐼
𝑃 = 𝑟𝑡𝑠 F = P + Is
₱2430.00
𝑃= F = ₱9,000.00 + ₱2,430.00
0.045(6)
𝑷 = ₱9,000.00 F = ₱11,430.00
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3. Given: P = ₱50,000.00; t=1 years or 1.5 years; Is = ₱5,480.00
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𝐼
𝑟 = 𝑃𝑡𝑠 F = P + Is
₱5480.00
𝑟 = ₱50,000.00(1.5) F = ₱50,000.00 + ₱5,480.00
𝒓 = 0.07 or 7% F = ₱55,480.00
𝐼
𝑡 = 𝑃𝑟𝑠 F = P + Is
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₱4,900.00
𝑡= F = ₱350,000.00 + ₱4,900.00
₱350,000(0.007)
t = 2 years F = ₱354,900.00
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5. Given: P = ₱25,000.00; r = 5% or 0.05; 𝑡= year
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Is = Prt F = P + Is
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Is = ₱25,000.00 (0.05)(12) F = ₱25,000.00 + ₱937.50
Is = ₱937.50 F = ₱25,937.50
1. Rachelle borrowed Php 150,000.00 from her cousin. If Rachelle agreed to pay a 6%
annual interest rate, calculate the amount of interest she must pay if the loan period is
1 year.
Solution
The problem provides the following information:
P = ₱150,000.00, r = 6% or 0.06, and t = 1 year.
2. Antonio invested a certain amount at 8% simple interest per year. After 2 ½ years, the
interest he received amounted to ₱12,000.00. How much did he invest?
Solution
Given: r = 8% or 0.08; Is = ₱12,000.00; t = 2.5 years
𝐼
𝑃 = 𝑟𝑡𝑠
₱12,000.00
𝑃= 0.08(2.5)
𝑷 = ₱60,000.00
Therefore, the amount of money originally invested was ₱60,000.00.
3. Ivana borrowed ₱40,000.00 and paid ₱2,250.00 interest for 9 months. What was the
rate of interest?
Solution:
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Given: P = ₱40,000.00; Is = ₱2,250.00 ; t= year
12
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𝐼
𝑟 = 𝑃𝑡𝑠
₱2,250.00
𝑟= 9
₱40,000.00(12)
r = 0.075 or 7.5%
4. How many years will it take for ₱22,000.00 to double at 12.5% simple interest?
Solution:
Given: P = ₱22,000.00; F = ₱44,000.00; r = 12.5% or 0.125
𝐼𝑠 = 𝐹 − 𝑃
𝐼𝑠 = ₱44,000.00 − ₱22,000.00
𝐼𝑠 = ₱22,000.00
𝐼
𝑡 = 𝑃𝑟𝑠
₱22,000.00
𝑡 = ₱22,000.00(0.125)
𝒕 = 8 years
Therefore, it will take 8 years for ₱22,000.00 to amount to ₱44,000.00.
Let’s Dig In
Activity 2
Directions: Complete the table below by solving the unknown quantities in each row.
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Activity 3
Answer the following problems involving simple interest. Write your complete solutions and
answers on a 1 whole sheet of paper.
1. Find the simple interest on a loan of ₱85,000.00 if the loan is given at a rate of
4% and is due in 6 years and 4 months?
2. How much money will you have after 5 years if you deposited ₱30,000.00 in a bank
that pays 8% simple interest?
Let’s Remember
From the equation of the simple interest 𝐼𝑠 = 𝑃𝑟𝑡 , you can also solve for the other
variables, P, r and t.
Equations for principal, rate, and time can be formulated using the Golden Rule of
Equations –
“Equality is preserved if both sides of the equation are changed the same way.”
To solve for P,
𝐼𝑠 𝑃𝑟𝑡
= < divide both sides by rt >
𝑟𝑡 𝑟𝑡
𝐼𝑠
𝑃 = 𝑟𝑡
Equations for rate (r) and time (t) can be in a similar manner.
To easily remember things, use the drawn circle below. Cover the letter to get its
formula.
𝐼𝑠 𝒔 𝑰
Covering P, you will have . Hence, 𝑷 =
𝑟𝑡 𝒓𝒕
Is 𝐼𝑠 𝑰
Covering r, you will have . Hence, 𝒓 = 𝑷𝒕𝒔
𝑃𝑡
P r t 𝐼𝑠 𝑰
Covering t, you will have . Hence, 𝒕 = 𝑷𝒓𝒔
𝑃𝑟
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Let’s Apply
Answer the following problems involving simple interest. Write your complete solutions
and answers on a 1 whole sheet of paper.
1. How much must Moira Defensor invest today to have ₱42,500.00 available in four years if
the money is worth 13% simple interest?
2. Lucas Manalo issued a check for ₱26,800.00 to settle a loan of ₱22,750.00 he got two
years ago. How much simple interest rate was he charged?
3. How long will it take ₱96,000.00 to accumulate to ₱126,000.00 at 10% simple interest
rate?
4. To have ₱580,000.00, six years and eight months from now, how much must a
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businessman invest today if the simple interest is 16 %?
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5. At what interest rate will ₱114,000.00 increase to ₱138,510.00 in two years and six
months?
Let’s Evaluate
Directions: Read each statement carefully. Choose the letter of the correct answer and write
it on the blank before the number.
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____ 2. 4 % is equivalent to
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A. 0.0042 B. 0.042 C. 0.42 D. 4.2
____ 3. This refers to the interest charged on the principal alone for the entire duration or
period of the loan or investment.
A. Compound interest C. Interest rate
B. Future value D. Simple interest
____ 4. This refers to the number of years for which the money is borrowed or invested.
A. Conversion period C. Principal
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B. Interest rate D. Time
____ 5. This refers to the fractional part of the principal that is paid on the loan or
investment which is usually expressed as percent.
A. Compound amount C. Interest rate
B. Compound interest D. Simple interest
____ 6. What is the formula in computing the future value 𝐹 of a principal 𝑃 in a financial
transaction involving simple interest?
A. 𝐹 = 𝑃(1 + 𝑖)−𝑛 C. 𝐹 = 𝑃(1 − 𝑖)−𝑛
B. 𝐹 = 𝑃(1 + 𝑟𝑡) D. 𝐹 = 𝑃(1 − 𝑖)𝑛
____ 7. How much was the interest if Miss Maezhen invested ₱30,400.00 and received a
total of ₱40,300.00 at the end of the term?
A. ₱ 9,900.00 B. ₱30,400.00 C. ₱40,300.00 D. ₱70,700.00
____ 8. How much is the future value on this financial transaction, 𝑃 = ₱10,000.00 , 𝑟 =
5%, and 𝑡 = 3 years?
A. ₱ 1,500.00 B. ₱11,500.00 C. ₱21,500.00 D. ₱31,500.00
____ 9. How long should Siri invest the amount of ₱65,120.00 to earn an interest of
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₱5,225.00 at 4 % simple interest?
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A. 1.47 years C. 4.17 years
B. 1.74 years D. 7.41 years
____ 12. Leonardo invested ₱15,600.00 at 10.25% interest rate. How long will take for his
investment to earn an interest of ₱5,055.00?
A. 0.32 years C. 6.29 years
B. 3.16 years D. 30.11 years
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____ 13. Find the simple interest on a loan of ₱65,000.00 if the loan is given at a rate of 8%
and is due in 6 years and 3 months.
A. ₱3,250.00 C. ₱32,500.00
B. ₱31,200.00 D. ₱46,800.00
____ 14. Mr. Mateo made a loan of ₱20,450.00 from a bank that charges 3% simple
interest. How much must he pay the bank after 2 years?
A. ₱1,227.00 C. ₱32,720.00
B. ₱21,677.00 D. ₱42,127.00
____ 15. At what simple interest rate will ₱18,000.00 earned to ₱25,000.00 in 5 years?
A. 6.78% C. 8.77%
B. 7.78% D. 9.78%
References
Boswel, L., Kanold, T.D., Larson, R., & Stiff, L. (2004). Algebra 1 & 2. Illinois: Mc Dougal
Littell.
Quimpo, N.F. (2007). A Course in Freshman Algebra. Quezon City: Office of Research and
Publications, Ateneo de Manila University.
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Development Team of the Module
Schools Division of Taguig city and Pateros Upper Bicutan Taguig City
Telefax: 8384251
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