11

CONTENT STANDARDS:

GENERAL The learners demonstrate understanding of key concepts of simple and

compound interests, and simple and general annuities.

MATHEMATICS PERFORMANCE STANDARDS:

The learners should be able to investigate, analyze and solve problems

involving simple and compound interests and simple and general annuities
using appropriate business and financial instruments.

MOST ESSENTIAL LEARNING COMPETENCIES:

FIRST SEMESTER  illustrates simple and compound interests. (M11GM-IIa-1)

 distinguishes between simple and compound interests. (M11GM-IIa-2)
QUARTER 2  computes interest, maturity value, future value, and present value in
simple interest and compound interest environment. (M11GM-IIa-b-1)
Week 1-2  solves problems involving simple and compound interests. (M11GM-
IIb-2)

Tuesday & Thursday

(Thursday Online Class)
Morganite (7:46 am – 9:45 am)
Tanzanite (3:16 pm – 5:15 pm)
Prepared by:
MR. ALLIEN JAY V. AMAMEO
Discussion
Lesson 1: Simple Interest
Interest
Interest is the amount paid for the use of another amount of money, called
the principal amount or simply principal.

GENERAL MATHEMATICS 11 1
 The description of interest suggest that three elements play important role in Solution
the computation of interest: a. Given:
i. Principal is the base in which interest is computed. If an amount is loaned Principal P=₱ 150,000
or borrowed, this amount is referred to as principal. Rate r =4 % or 0.04
ii. Term is the unit of time for which principal is loaned, or the length of time 9
Term t=9 months or =0.75
the principal is borrowed. 12
iii. Interest rate is the multiplier expressed as percent of the principal to be The interest I is
paid each term. I =Prt
I =(₱ 150,000)(0.04)(0.75)
The maturity value, or simply the amount, is the sum of the principal and the I =₱ 4,500
interest that accumulates over the agreed term. This agreed term is usually
expressed in years or a fraction of a year (quarterly, semiannually, or monthly. b. The maturity value of the amount A is the sum of the principal an the
interest.
Simple Interest Hence,
A=P+ I
Simple interest refers to the amount earned for one year calculated by
A=₱ 150,000+ 4,500
multiplying the principal by the interest rate. It also important to note that the
A=₱ 154,500
simple interest I is directly proportional to the principal P , interest rate r , and the
term t . In symbols,
I =Prt Example 2 A dollar investment of $1,200 is transacted for 5 months at 6%.
Illustrative examples: Find the:
A. If the simple interest for a principal in 4 months is ₱100, the simple interest a. Interest
for the same principal in 8 months is ₱200. b. Maturity value
B. If the simple interest for a principal at 3% is ₱500, the simple interest for Solution
the same principal at 6% is ₱1,000. a. Given:
C. If the simple interest on the principal amounting to ₱100,000 is ₱500 over a Principal P=$ 1,200
contract term, the simple interest on the principal amounting to ₱500,000 is Rate r =6 % or 0.06
5
₱2,500 over the same contract term. Term t=5 months or
12
The interest I is
Example 1 An amount of ₱150,000 is invested for 9 months at 4%. Find the:
I =Prt
a. Interest
b. Maturity value I =( $ 1,200 ) ( 0.06 ) ( 125 )
GENERAL MATHEMATICS 11 2
 I =$ 30 t=0.05
b. The maturity value is A is
A=P+ I Since there are 12 months in a year, it will take
A=$ 1,200+ $ 30 ( 12 ) ( 0.05 )=0.6 months, or approximately
A=$ 1,230 ( 0.6 )( 30 days )=18 days for ₱1,000,000 to amount to ₱1,001,000 at 2%
simple interest.
Note that the maturity value A is given by
A=P+ I b. Given:
But Principal P=₱ 1,000,000
I =Prt Interest I =₱ 1,000
Thus, 10 5
A=P+ Prt Term t=10 months ¿ = year
12 6
A=P(1+rt) The rate r can be derived from I =Prt
I =Prt
Example 3 An amount of ₱1,000,000 is invested in a financial institution. I
r=
a. How long will it take for the amount to reach ₱1,001,000 at 2% Pt
simple interest?
b. At what interest rate will it earn ₱1,000 in 10 months? Interest: Ordinary Interest and Exact Interest
The divisor to be used in computing the term in days is contingent on the
Solution agreement of parties involved. The term in days has 2 divisor: a divisor of 365 days
a. Given: (the actual number/days in a year), and 360 (the usual practice in business since
Principal P=₱ 100,000,000 this number offers many factors).
Rate r =2 %=0.02
Maturity value A=₱ 1,001,000 There are two ways of computing for the term. The two choices for the
Interest I = A−P divisor for the term, result in four ways of computing simple interest, as shown
I =₱ 1,001,000−₱ 1,000,000=₱ 1,000 below:
The value of the term t can be divided from I =Prt Exact Time Ordinary Time
I =Prt 360 days Ordinary interest with exact time Ordinary with ordinary
I (Banker’s Rule) time
t= 365 days Exact interest with exact time Exact interest with
Pr
ordinary time
₱ 1,000
t=
( ₱ 1,000,000 ) ( 0.02 )

GENERAL MATHEMATICS 11 3
 The most commonly used method is the Banker’s Rule. The other methods A
P=
are seldom used. If the method to be used is not specified, the Banker’s Method 1+rt
applies.
Example 4 Find the exact interest and the ordinary interest given the following This formula is used to find the principal if the maturity value, the rate, and
values: ₱5,000 for 120 days at 5%. the term are given. In this case, the principal is referred to as the present value.
Solution Present Value at a Simple Interest Rate
a. The exact interest is: The present value P at a simple interest rate r of a given amount A for a
I =Prt given term t can be determined by the formula
I =(₱ 5,000)(0.05)¿ A
P=
I =₱ 82.19 1+rt
b. The ordinary interest is:
I =Prt Example 6 Find the present value of a loan due on December 24, 2014, with a
I =(₱ 5,000)(0.05)¿ maturity value of ₱340,600 and a rate of 6 % in 156 days.
I =₱ 83.33 Solution
Given:
Example 5 Find the ordinary inters where the amount or principal is ₱543,000 r =6 %=0.06
at 6% for 60 days. 159
t=
Solution 360
Given: A
Present value P=
1+rt
P=₱ 543,000
₱ 340,600
r =6 %=0.06 P=
1+(0.06)¿ ¿
t= ( )
60
360 6
=
1
P=
₱ 340,600
1.0265
The ordinary interest is P=₱ 331,807.11
I =Prt
I =(₱ 543,000)(0.06)¿
Example 7 On May 8, 2015, Mrs. Lesly borrowed ₱100,000 from Mr. Guison
I =₱ 5,430
at 6% payable in 90 days. If this amount is equivalent to 5% in a
Present Value bank, find the present value.
The formula for the maturity value A is Solution
A=P ( 1+rt ) First, find the maturity value at 6%
A=P ( 1+rt )
By dividing bot sides of this equation by 1+rt , the result is A=₱ 100,000 ¿

GENERAL MATHEMATICS 11 4
 A=₱ 101,500 5. ₱120,000 at 3% for 10 years
Then, find the present value transacted on May 8, 2015 at 5%
₱ 101,500 B. Directions: How long the given principal P take to reach the given
P=
( )
1+ ( 0.05 )
90
360
maturity value A at the given simple interest rate r ?
1. P=₱ 150,000 ; A=₱ 151,000 ; r =4 %
N
_
P=₱ 100,246.91 2. P=₱ 800,000 ; A=₱ 801,000 ;r=3 % N
3. P=₱ 750,000 ; A=₱ 750,500 ; r =2.5 %
C. Directions: At what interest rate will the given principal P earn the given
Cebu Sacred Heart College, Inc.
simple interest I in the given term t ?
Carcar Campus
1. P=₱ 150,000 ; I =₱ 1,000 ; t=2 years
Valladolid, Carcar City, Cebu
2. P=₱ 35,000 ; I =₱ 600 ; t=1 year
Q2-Week 1 (General Mathematics)
D. Directions: Find the exact interest and the ordinary interest on the
Name:_________________________________________ Score: _____________
following:
Grade& Section: ________________________________ Date: _____________
1. P=40,000 for 120 days at 5%
2. P=₱ 54,000 for 90 days at 4%
Assessment 3. P=25,000 for 80 days at 6.2%

GENERAL DIRECTIONS: E. Directions: Solve each of the following problem.

 Write your answers in a one whole sheet of yellow pad ONLY.
(using other papers will not be accepted)
 Solve and show your solution.
 You are allowed to use calculator if needed.
 Don’t forget to staple or attach your answer sheet or the separated
paper to the questionnaire.
 Do what is indicated in each test item.
1. Find the present value on December 24, 2015 of a loan with a maturity
value of ₱340,600 and a rate of 6% in 159 days.
2. Mr. Lancelot invested ₱150,000 at 5% for 8 years and another ₱150,000 at
8% for 5 years. Which investment will yield higher interest and by how
much?

A. Directions: Find the simple interest and the maturity value.

1. ₱150,000 at 5% for 8 years
2. ₱240,000 at 6% for 5 years
3. ₱780,000 at 4% for 13 years
4. ₱186,000 at 5% for 7 years

GENERAL MATHEMATICS 11 5
 Formula of Future Value

Discussion Compounded Annually A=P¿

Compounding K times per year A=P¿ ,
Lesson 2: Compound Interest where
r
is called the periodic rate
K
Compound Interest K = compounded k times
Compound interest is also the amount earned for one year calculated by I n= An −P
Compound Interest
multiplying the principal by the interest rate. Borrowing, bonding and saving in
financial institution apply compound interest. Compound interest are usually used Where I n – compound interest
for long term-transactions. An – compound amount
P - principal
To understand compound interest better, the following terminologies are
described: Example 1 Find the compound amount of deposit at the end of 1 year if
i. Compound amount – the accumulated amount of a given principal at the ₱ 20 00.00 is deposited at 4 % compounded
end of a given time interval.
(a) annually and (b) semi-annually.
ii. Compound interest – the original principal minus the compound amount
iii. Term – the length of time for which the compound interest is to be Solution
calculated. a. Using the formula
A=P¿
Term
Time Interval where P = ₱ 20 000.00, r = 4 % or 0.04, and t = 1
Annually Semiannually Quarterly Monthly
1 year 1 period 2 periods 4 periods 12 periods we have
2 years 2 periods 4 periods 8 periods 24 periods
3 years 3 periods 6 periods 12 periods 36 periods A=20 000 (1+ 0.04 )=₱ 20 800.00

iv. Nominal rate – the quoted rate which is the basis for converting the
b. Using the formula
interest rate per conversion period.
A=P¿
where P = ₱ 20 000.00, r = 4 % or 0.04 and t = 1 and since its semi-
annually K = 2
A=P¿

GENERAL MATHEMATICS 11 6
 ( )
2 ( 1)
0.04 = 475 503.17 – 320 000.00 = 155 503.17
¿ 20 000 1+
2 Example 3 What amount must be invested in order to have ₱ 128 376.52 after 8

¿ 20 000 ( )
2
51 years if money is worth 6 % compounded semi-annually?
50
Solution
¿ 20 000 (
2500 )
2601 We need to find the principal P, knowing that the compound amount is
Given:
¿ ₱ 20 808.00
A = ₱ 128 376.52
r = 6 % or 0.06
Example 2 If ₱ 320 000.00 is invested for 5 years at 8 % compound quarterly,
K=2
find
t = 8 years.
a. Compound amount
A=P¿
b. Compound interest.
A
Solution P=
¿¿
a. Given: 128376.52
¿
¿¿
r = 8 or 0.08
128376.52
K=4 ¿
¿¿
r 0.08 ¿ 80 000.003 or ₱ 80 000.00
Then = =0.02.
K 4
A=P¿
¿ 320 000 ¿
¿ 320 000 ¿
¿ ₱ 475 503.17
The compound amount is ₱ 475 503.17.
b. Compound Interest = Compound Amount – Principal
I n= An −P

GENERAL MATHEMATICS 11 7
 Cebu Sacred Heart College, Inc. 5. Khufra borrows ₱9,000 from a financial institution for the purchase of a
used car. The terms of the loan require him to pay interest at 4% with a
Carcar Campus
compounded semi-annually and to repay the total amount at the end of 2
Valladolid, Carcar City, Cebu
years.
Q2-Week 2 (General Mathematics)

Name:_________________________________________ Score: _____________

Grade& Section: ________________________________ Date: _____________

Assessment

GENERAL DIRECTIONS:
 Write your answers in a one whole sheet of yellow pad ONLY.
(using other papers will not be accepted)
 Solve and show your solution.
 You are allowed to use calculator if needed.
 Don’t forget to staple or attach your answer sheet or the separated
paper to the questionnaire.
 Do what is indicated in each test item.

Directions: Solve each of the following

1. Find the compound amount and compound interest on a loan of ₱50,000 at
6% for 6 years compounded semi-annually.
2. Calculate the interest you would earn on $1,000 deposited in an account
that pays 4% interest per annum if you left it for two years, with
compounded monthly.
3. If Kagura invested $5,000 today for 2 years at a compound interest rate of
8% annually, what would the accumulated value be at the end of 2 years in
Kagura’s account? Received/Checked by:
Noted by:
4. Hayabusa invest ₱8,000 at 2% interest rate per year, compound quarterly. MR. ALLIEN JAY V. AMAMEO
__________________________
Find the balance after 10 years. Subject Teacher
Name of Parent/s and Signature

GENERAL MATHEMATICS 11 8