ACTIVITY #4

Simple and Compound Interest

Name: _Mercado, Aubrey M._____________ Course & Section: _BSBA-1CMT2N___
Date: _April 23, 2022____________

Solve each problem. Show your complete solutions. Then explain your final
answer. (5 points each)
Ps. I round off to 2 decimal point for the time (t).
1) Find the interest on a used bike loan of ₱5000 at a rate of 16% for a period
of 8 months.
Simple Interest formula is: I = Prt
In this problem:
P = ₱5000
r = 16%
t = 8 months
Since one year is equal to 12 months, you can convert the number of
months into years by dividing 8 by 12 to get 0.667 years.

I = Prt
I = (₱5000) (16%) (8/12)
I = (₱5000) (0.16) (0.67)
I = ₱536
₱536 is the interest of the loan at the end of the 8 months period.

2) Find the interest earned on an investment of ₱10,000 into a money market

account that pays a simple interest rate of 1.75% over a 39-week period.
Simple Interest formula is: I = Prt
In this problem:
P = ₱10,000

r = 1.75% per year

t = 39 weeks

Since one year is equal to 52 weeks, you can convert the number of
weeks into years by dividing 39 by 52 to get 0.75 years.
 I = Prt
I = (₱10, 000) (1.75%) (39/52)
I = (₱10, 000) (0.0175) (0.75)
I = ₱131.25
₱131.25 is the interest of the loan at the end of the 39 weeks period.

3) Find the amount due on a loan of ₱600 at 15.75% interest after 21 months.

Simple Interest formula is: I = Prt

Future Value formula is: F=P+I
In this problem:
P = ₱600

r = 15.75%
t = 21 months

Since one year is equal to 12 months, you can convert the number of
months into years by dividing 21 by 12 to get 1.75 years.

Since were looking for the future value, we must first solve the interest.

I = Prt
I = (₱600) (15.75%) (21/12)
I = (₱600) (0.1575) (1.75)
I = ₱165.38

To get the future value we will use the formula:

F=P+I
F = ₱600 + ₱165.38
F = ₱765.38
₱765.38 is owed at the end of the 21 months period.

4) If you borrow ₱ 3000 at 14% simple interest for 10 months, how much will
you owe in 10 months? How much interest will you pay?
Simple Interest formula is: I = Prt
Future Value formula is: F=P+I
In this problem:
P = ₱3000

r = 14%
t = 10 months

Since were looking for the future value and the interest, we will first solve
the interest.

I = Prt
I = (₱3000) (14%) (10/12)
I = (₱3000) (0.14) (0.83)
I = ₱348.6

To get the future value we will use the formula:

F=P+I
F = ₱3000 + ₱348.6
F = ₱3348.6
₱3348.6 is owed at the end of the 10 months period and the interest is
₱348.6.