BUSINESS MATH QUARTER 2 • MODULE 1

Name: Duhreen Kate S. Castro

Section: 11-DCO ABM

WHAT'S MORE
Making Decisions
Teacher She wants to loan money. She has two options, and she wants to
know which bank offers a lower interest at the same interest rate of 8%.
She wants to borrow ₱20,000 for 60 days. Bank A uses ordinary interest
while Bank B uses exact interest. Which bank will she choose? What is
the difference between the two interests offered by the two banks?

BANK A
O r din ar y i nt e r e st is int e r e st base d on a 3 60-day /y e ar .
Given: Pr inc ipal = ₱20,000 Rat e = 8 % Time = 60 d ay s

I= Prt 60
Simple Int e r e st = ₱20 ,0 00 x 0.08 x 3 60
= ₱26 6.66 666 6 67 or ₱26 6.67

BANK B
Ex ac t inte r e st is int e r e st base d on a 365 -day /y e ar .
Given: Pr inc ipal = ₱20,000 Rat e = 8 % Time = 60 d ay s

I= Prt 60
Simple Int e r e st = ₱20 ,0 00 x 0.08 x 3 65
= ₱ 2 63 .0 13 698 6 3 or ₱26 3.01
Which bank will she choose?

B a s e d on the com p u t e d i n t e r es t
re s u lt of two op t i o n s , S h e w i l l g o i n g
to c hoose Bank B b e c a u s e i t o f f e r s a
lo w e r interest t h a n i n B a n k A .

What is the difference between the

two interests offered by the two
banks?

B a n k A that uses a n o r d i n a r y
in t e rest will spen d ₱ 2 6 6 . 6 7 w h i l e
B a n k B that uses a n e x a c t i n t er e s t
w i l l spend ₱ 263 . 0 1 . T h e difference
b e t w een the tw o in t e r ests offered
b y t he two banks i s ₱ 3 . 6 5 2 9 6 80 4 o r
₱ 4 . If the teache r w a n t t o s a v e
m o n ey she will a c c e p t t h e o f f er
from Bank B.
St udent Z has saved ₱5, 000 during t he l ockdown. He
want s t osave hi s money in a bank t hat of f ers a 1%
int erest si mpl e i nt erest but t hen his sister tol d him
t hat she wi l l gi ve hi m ₱100 t o borrowhi s money f or a
year. Whi ch i s t he bet t er opt ion. Show
yourcomput at i ons and expl ain your ans wer

5000×1%= 50
The answer will be base upon the situation vif
studentz continue to save his money in bank
and withdraw itafter 3 years this is a better
option because student zwill have a ₱150
interest while if student z withdrawafter a
year the best option is to borrow his money
toher sister because it has more interest than
a bank