SAINT TERESA SCHOOL OF HILONGOS

Hilongos, Leyte
LEARNING ACTIVITY SHEET No. 8
Name: _________________________________________________ Score:___________
Grade & Section: _________________________________________ Date: ___________
Activity Title: Simple Interest
Learning Target: Define simple interest; compute simple interest, maturity value and present value; and
solve problems involving simple interest.
References: https://docs.google.com/document/d/1B_dniH3QZW-RrNIAMCj8NHkEw2Bl5b0V/edit

Pre-test.
Directions: Read each statement carefully. Choose the letter of the correct answer and write it on a 1 whole
sheet of paper. 

1. This refers to the accumulated amount obtained by adding the principal and the compound interest.
A. Compound amount C.  Present value
B. Compound interest D.  Simple interest 
2. Date on which the money borrowed or loaned is to be completely repaid.
A. Conversion period C.  Maturity date
B. Loan date D.  Origin date
3. What is the formula in computing the simple interest on a given financial transaction?
A. Is=Prt C.  Is=Prt
B. Is=Pr2t D.  Is=rPt
4. This refers to the interest rate per conversion period.
A. Compound interest C.  Rate of interest
B. Periodic rate D.  Simple interest
5. This refers to the amount paid or earned for the use of money.
A. Conversion period C.  Principal
B. Interest D.  Rate
6. 30 months is equivalent to
A. 2.5 years C.  3 years
B. 2.75 years D.  3.25 years
7. How much is the simple interest on this financial transaction, P = ₱5,000.00, r = 6%, and t = 2 years?

A. ₱120.00 C.  ₱1,200.00

B. ₱600.00 D.  ₱6,000.00
8. What is the total number of conversion periods when a certain amount is borrowed at 10% compounded
monthly for 5 years?
A. 12 C.  24
B. 50 D.  60
9. How much was the interest if Sophia borrowed ₱45,000.00 and paid a total of ₱55,500.00 at the end of
the term?
A. ₱10,500.00 C.  ₱11,500.00
B. ₱45,000.00 D.  ₱100,500.00
10. What is the interest rate per conversion period if ₱25,900.00 was invested at 3.5% compounded annually
for 4 years and 6 months?
A. 0.035 C.  0.140
B. 0.350 D.  0.460 
11. John borrowed ₱45,400.00 at 10% simple interest rate. How much should he repay after 3 years?
A. ₱13,620.00 C.  ₱59,020.00
B. ₱46,762.00 D.  ₱104,420.00
12. An interest of ₱760 was earned on an investment for 9 months at 3% interest rate. How much was
invested?
A. ₱2,052.00 C.  ₱20,520.00
B. ₱2,814.81 D.  ₱33,777.78
13. At what simple interest rate was ₱18,350.00 invested if it earned ₱1,025.00 interest for 1.5 years?
A. 0.0372% C.  3.72%
B. 0.1193% D.  11.93%
 14. How much will be the compound interest if ₱30,220.00 is invested at 7% compounded quarterly for 2
years and 9 months?
A. ₱4,499.21 C.  ₱36,574.05
B. ₱6,354.05 D.  ₱147,899.31
15. When is ₱78,800.00 due if its present value of ₱61,500.00 is invested at 1034% compounded monthly?
A. 2. 32 years C.  10.75 years
B. 6.95 years D.  27.79 years

“When you saved money in the bank, you will gained an interest paid by the bank. On the other hand,
when you borrow money, you are charged an interest on the amount you borrowed. How does gained and
charged interests computed?”

A debtor pay the bank an amount which is more than the amount they borrowed. An investor may
withdraw from the bank more than the amount deposited. This additional sum is called INTEREST.

Definition of terms:

Lender or creditor – person (or institution) who invests the money or makes the funds available.

Borrower or debtor – person (or institution) who owes the money or avails of the funds from the lender.

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) – amount of time in years the money is borrowed or invested; length of time between the
origin and maturity dates.

Principal or present value (P) – amount of money borrowed or invested on the origin date.

Rate of interest or simply rate (r) – annual rate, usually in percent, charged by the lender, or rate of increase of
the investment.

Interest (I) – amount paid or earned for the use of money.

Maturity Value or Future Value (F) – amount after t years that the lender receives from the borrower on the
maturity date; equal to the sum of principal and the interest earned.

Simple Interest (I ) s

For every financial transaction, whether you borrowed or invested a certain amount P, a corresponding
percentage of the principal called interest is being paid. Simple Interest (I ) is the interest charged on the
s

principal alone for the entire duration or period t of the loan or investment, at a particular rate r. After the term
of the loan or investment, the maturity value or future value F is computed by getting the sum of the principal
and the interest due.  

Formulas:
 Is=Prt

 F=P+Is     or     F=P+Prt     or     F=P(1+rt)

 P=Isrt     or     P=F-Is

 t=IsPr

 r=IsPt

***where  Is- simple interest

P- principal
 r- rate of interest or simply rate
t- time (in year)
F- future value (or maturity value)

Note: If the given time is in months, it can be converted to year(s) by using the formula
t=number of months12 .
Example. 
Directions: Complete the table below by solving the unknown quantities in each row.
Principal  Rate  Time Simple Interest  Future Value
(P) (r) (t) (I )
s (F)
1. ₱500,000.00 12.5% 10 years
)
2. 2.5% 4 years ₱1,500.00
)
3. ₱36,000.00 1 year ₱4,860.00
) and 
6 months
4. ₱250,000.00 0.5% ₱1,400.00
)
5. ₱10,000.00 4% 5 months
)
Solution:

1. Given: P = ₱500,000.00 ; r = 12.5% or 0.125 ; t = 10 years

Is=Prt F=P+Is
Is=₱500,000.00(0.125)(10) F=₱500,000.00 +₱625,000.00
Is=₱625,000.00 F=₱1,125,000.00

2. Given: r = 2.5% or 0.025 ; t = 4 years ; Is = ₱1,500.00

P=Isrt F=P+Is
P=₱1,500.000.025 (4) F=₱15,000.00+₱1,500.00
P=₱15,000.00 F=₱16,500.00

3. Given: P = ₱36,000.00 ; t = 1 612 years or 1.5 years ; Is = ₱4,860.00

r=IsPt F=P+Is
r=₱4,860.00₱36,000.00(1.5 ) F=₱36,000.00 +₱4,860.00
r=0.09  or  9% F=₱40,860.00

4. Given: P = ₱250,000.00 ; r = 0.5% or 0.005 ; Is = ₱1,400.00

t=IsPr F=P+Is
t=₱1,400.00₱250,000.00(0.005) F=₱250,000.00 +₱1,400.00
t=1.12 years F=₱251,400.00

5. Given: P = ₱10,000.00 ; r = 4% or 0.04 ; t = 512 year

Is=Prt F=P+Is
Is=₱10,000.00 (0.04)512 F=₱10,000.00 +₱166.67
Is=₱166.67 F=₱10,166.67
Activity 1.
I. Complete the table below by solving the unknown quantities in each row. Write your complete
solutions and answers on a 1 whole sheet of paper.
Principal  Rate  Time Simple Interest  Future Value
(P) (r) (t) (I )s (F)
1.) ₱40,000.00 2% 3 years
2.) 10% 5 years ₱2,500.00
3.) ₱100,000.00 1.5 years ₱3,600.00
4.) ₱250,000.00 4.5% ₱15,400.00
5.) ₱12,345.00 8.25% 9
months

II. Solve the future value (refer on test I) using the alternative formulas: 
F=P+Prt     or     F=P(1+rt)
Example.
Problems Involving Simple Interest

1. A bank offers 1.5% annual simple interest rate for a particular deposit. How much interest will be earned
if 1 million pesos is deposited in this savings account for 1 year?

Solution:

Given: r = 1.5% or 0.015 ; P = ₱1,000,000.00 ; t = 1 year

Is=Prt
Is=₱1,000,000.00 (0.015)(1)
Is=₱15,000.00

Therefore, an interest amounting to ₱15,000.00 will be earned if 1 million pesos is deposited in a

savings account for 1 year with 1.5% annual simple interest rate.

2. When invested at an annual interest rate of 7%, the amount earned ₱11,200.00 of simple interest in 2.5
years. How much money was originally invested?

Solution:

Given: r = 7% or 0.07 ; Is = ₱11,200.00 ; t = 2.5 years

P=Isrt
P=₱11,200.00 0.07(2.5)
P = ₱64,000.00

Therefore, the amount of money originally invested was ₱64,000.00.

3. Ricky borrowed ₱25,000.00 and paid ₱1,250.00 interest for 6 months. What was the rate of interest?

Solution:

Given: P = ₱25,000.00 ; Is = ₱1,250.00 ; t = 612 year or 0.5 year

r=IsPt
r=₱1,250.00 ₱25,000.000.5
 r= 0.1   or   10%

Therefore, the rate of interest was 0.1 or 10%.

4. How long in years will it take for ₱17,300.00 to amount to ₱20,000.00 at 11.25% simple interest?

Solution:

Given: P = ₱17,300.00 ; F = ₱20,000.00 ; r = 11.25% or 0.1125

Is=F-P
Is=₱20,000.00-₱17,300.00
Is=₱2,700

t=IsPr
t=₱2,700₱17,300.00(0.1125)
t=1.39 years
Therefore, it will take 1.39 years for ₱17,300.00 to amount to ₱20,000.00.

Activity 2.
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 ₱65,000.00 if the loan is given at a rate of 2% and is due in 5
years and 3 months?

2. How much money will you have after 4 years if you deposited ₱10,000.00 in a bank that pays 6%
simple interest?
 Answer Key

What I Know (Pretest)

1. A
2. C
3. A
4. B
5. B
6. A
7. B
8. D
9. A
10. A
11. C
12. D
13. C
14. B
15. A

What’s More
I.
1. I = ₱2,400.00
s F = ₱42,400.00
2. P = ₱5,000.00 F = ₱7,500.00
3. r = 0.024 or 2.4% F = ₱103,600.00
4. t = 1.37 years F = ₱265,400.00
5. I = ₱763.85
s F = ₱13,108.85
II.
*The same answers on test I (values of F).

What I Can Do
1. I = ₱6,825.00
s

2. F = ₱12,400.00