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Mathematics
Quarter 1 – Module 8:
Solving Problems on Simple
Interest
Business Mathematics – Grade 11
Self-Learning Module (SLM)
Quarter 1 – Module 8: Solving Problems on Simple Interest
First Edition, 2020
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in this module, do not hesitate to consult your teacher or facilitator.
Thank you.
2
What I Need to Know
Hi there! Many find it difficult to solve problems involving simple interest. But
you know what? Solving problems on simple interest can be easy. Yes, it can be!
What I Know
Before we start our lesson, let us check your prior knowledge about solving
problems involving simple interest.
1. What is the product when the principal amount is multiplied by the interest
rate and the number of years?
a. compound interest
b. simple interest
c. diminishing interest
d. complicated interest
2. What is the amount due and payable to the holder of a financial obligation
as of the maturity date of the obligation?
a. principal amount
b. monthly amortization
c. mortgage
d. maturity value
3. How many days are used when ordinary interest is applied?
a. 360
b. 362
c. 364
d. 365
3
4. In computing for the interest, which among the following variables is NOT
included?
a. principal amount
b. rate
c. paid loan
d. time
5. What is defined as the charge for the privilege of borrowing money?
a. interest
b. withdrawal
c. deposit
d. credit
6. What is described as a loan, secured by a collateral, that the borrower is
obliged to pay at a specific term?
a. amortization
b. loan
c. deposit
d. mortgage
7. What is the transaction involving a transfer of money to another party for
safekeeping?
a. loan
b. deposit
c. principal amount
d. amortization
8. What is the process of diminishing the amount or total in regular lesser
amounts?
a. mortgage
b. deposit
c. amortization
d. loan
9. What is defined as money (or property) given with the promise that it will be
paid back in the future, usually with interest?
a. deposit
b. collateral
c. loan
d. promissory note
10. What is described as professional support to aid customers?
a. utilities
b. foundation
c. services
d. product
11. Ronel wants to start an online business. How much interest will he have to
pay if he will borrow an amount of ₱50,000.00 from a bank payable for two
years at a simple interest rate of 6.5% per year?
a. ₱5,000.00
b. ₱5,500.00
c. ₱6,000.00
d. ₱6,500.00
4
12. Danny deposited P150,000.00 in a bank. What is the maturity value of
Danny’s money in three years if the bank offers a simple interest of 1% per
annum?
a. ₱150,500.00
b. ₱152,500.00
c. ₱154,500.00
d. ₱155,500.00
13. Juan Dela Cruz wanted to purchase a car. The bank offered him a car loan
amounting to ₱1,200,000.00 payable within 4 years with a simple interest
rate of 8.2% per annum. What is the maturity value of the loan?
a. ₱1,592,500.00
b. ₱1,593,600.00
c. ₱1,594,700.00
d. ₱1,595,800.00
14. If a house is sold for P3,000,000.00 and the bank requires 20% down
payment, what is the amount of mortgage?
a. ₱2,400,000.00
b. ₱2,500,000.00
c. ₱2,600,000.00
d. ₱2,700,000.00
15. Using exact interest, what is the amount due (maturity value) if ₱20,000.00
is invested at 9% simple interest for 150 days?
a. ₱20,639.73
b. ₱20,739.73
c. ₱20,839.73
d. ₱20,939.73
5
Lesson
Solving Problems on Simple
8 Interest
In this module, you will be taught on how to solve problems involving simple
interest. Let us now begin!
What’s In
From the previous modules, you have learned about percent, mark-up, mark-
down, mark-on, and solved problems involving buying and selling. Let us see what
have you learned from the previous topics.
Direction: Decode the scrambled words through Atbash Cipher. Tell something
about the word you decoded. Refer to the key for guidance. Do your best
and good luck!
6
What’s New
How do you find the activity? Are not you excited to learn new things? They
say that knowledge is power. The more knowledge you gain the powerful you get.
Do not you agree? Try this activity and aim to get further enhance your knowledge.
Let us go!
Activity 2: Who Am I?
Direction: Identify the I (interest), P (principal amount), r (rate), and t (time) in
every problem involving simple interest. Write your answers on the
spaces provided.
4. How long will 1 million pesos earn a simple interest of ₱100,000 at 1% per
annum?
I = _______ P = _______ r = _______ t = _______
What is It
There, you can now identify different variables involving simple interest. With
this, it is now simpler to solve problems involving interest wherever it is applied.
Just remember the key words and it will come easily.
Our main goal in this module is for you to solve problems involving simple
interest. But before we discuss how to solve such problems, let us define first the
following terms:
7
A deposit is a financial term that means money is held at a bank. It is a
transaction involving a transfer of money to another party for safekeeping.
A loan is a money (or property) given with the promise that it will be paid
back in the future, usually with interest.
Interest is described as the money paid regularly at a particular rate for the
use of money lent, or for delaying the repayment of a debt.
Time can be defined as the duration or term used in solving simple interest.
B. Meena was given ₱200,000.00 by her parents and she deposited it in a bank.
Find the maturity value of Meena’s money in five years if the bank offers a
simple interest of 1% per annum.
Maturity Value (F):
𝐹 = 𝑃 (1 + 𝑟𝑡)
𝐹= 𝑃 + 𝐼
8
Given: 𝑭 =? 𝑷 = ₱200,000.00
𝒓 = 1% 𝒕 = 5 𝑦𝑒𝑎𝑟𝑠
Solution:
𝑭 = 𝑷 (𝟏 + 𝒓𝒕)
𝑭 = ₱200,000 [1 + (0.01) (5)]
𝑭 = ₱𝟐𝟏𝟎, 𝟎𝟎𝟎. 𝟎𝟎
C. Dereck borrowed ₱2,200,000.00 payable for 5 years to purchase a pick-up
truck. A bank offered him a car loan with simple interest rate of 6.75% per
year. What is the maturity value of the loan?
Given: 𝑭 =? 𝑷 = ₱2,200,000.00
𝒓 = 6.5% 𝒕 = 5 𝑦𝑒𝑎𝑟𝑠
Solution:
𝑭 = 𝑷 (𝟏 + 𝒓𝒕)
𝑭 = ₱2,200,000 [1 + (0.065)(5)]
𝑭 = ₱𝟐, 𝟗𝟏𝟓, 𝟎𝟎𝟎. 𝟎𝟎
D. If a house and lot is sold for ₱4,000,000.00 and the bank requires 25% down
payment, find the amount of mortgage.
Mortgage:
Down payment = down payment rate × cash price
Amount of the loan (mortgage) = cash price − down payment
𝑭 = 𝑃 + 𝐼
= ₱40,000 + ₱2,000
= ₱𝟒𝟐, 𝟎𝟎𝟎. 𝟎𝟎
9
What’s More
OK! The activities challenge us mentally but you have to admit that it is pretty
remarkable how things work in business world. Right now, you have acquired a lot
of skills on how to solve problems in different situations. So, try to solve the
following problems in the next activity.
2. A bank offers 0.25% annual simple interest rate for a particular deposit. How
much interest will be earned if 1 million pesos will be deposited in his
savings account for 1 year?
Formula: I = Prt
5. Find the exact interest on a loan of ₱59,580 at 8.5% annually for 40 days.
Formula: I = P × (r/365) × t
10
What I Have Learned
Let us check what have you learned. Do this activity and answer, and be one
of the elites!
2. How can you identify the formula to be used in solving problems involving
simple interest? You can cite keywords if you want.
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
What I Can Do
Now, here is another activity that will enable you to apply the lesson on real-
life situations.
11
Activity 5: What’s the Problem?
Direction: Solve the following problems involving interest using the right formula to
get the correct answer. List first the given from the problem and show
your solutions on the space provided and write your final answer on the
blank.
1. Keith borrowed an amount of ₱50,000.00 from the bank. How much interest
will he have to be pay on the loan for 3 years at a simple interest rate of
7.5% per year?
Solution:
Answer: _________________
2. Pedro has been saving his lunch money and it reached an amount of
₱30,000.00 To secure his money and gain a small interest, he deposited it in
the bank. How much is Pedro’s money after ten years if the bank offers a
simple interest of 1.5% per annum.
Solution:
Answer: _________________
3. Popsie started a school bus business using a van worth ₱3.2M. He got a car
from a bank with a simple interest at a rate of 5% per year. What is the
maturity value of the loan after 5 years?
Solution:
Answer: _________________
12
4. As newlyweds, Mr. And Mrs. Sanchez wanted to purchase their dream house
worth ₱5,000,000.00 and the bank requires 15% down payment, find the
amount of mortgage.
Solution:
Answer: _________________
Answer: _________________
Assessment
Great Job! Let us test what you have learned from the very start of our lesson.
13
3. What is result when the principal amount is multiplied by the interest rate
and the number of years?
a. compound interest
b. simple interest
c. diminishing interest
d. complicated interest
4. What is defined as the charge for the privilege of borrowing money?
a. interest
b. withdrawal
c. deposit
d. credit
5. What is the amount due and payable to the holder of a financial obligation
as of the maturity date of the obligation?
a. principal amount
b. monthly amortization
c. mortgage
d. maturity value
6. In computing for the interest, which among these variables is not included?
a. principal amount
b. rate
c. paid loan
d. time
7. What is described as a loan, secured by a collateral, that the borrower is
obliged to pay at specified terms?
a. amortization
b. loan
c. deposit
d. mortgage
8. It is defined as a financial term that means money held at a bank. Also is a
transaction involving a transfer of money to another party for safekeeping.
a. loan
b. deposit
c. principal amount
d. amortization
9. What is the process of diminishing the amount or total in regular lesser
amounts?
a. mortgage
b. deposit
c. amortization
d. loan
10. What is defined as the money (or property) given with the promise that it will
be paid back in the future, usually with interest?
a. deposit
b. collateral
c. loan
d. promissory note
11. Mr. Rivera wanted to start an online business on a loan of P 1000,000.00.
How much interest will he have to be pay on a loan for two years at a simple
interest rate of 6.5% per year?
a. ₱10,000.00
b. ₱11,000.00
c. ₱12,000.00
d. ₱13,000.00
14
12. Pedro Masunurin wanted to purchase a car. The bank offered him a car loan
amounting to ₱1,500,000 payable for 5 years at a simple interest rate of
8.2% per year. What is the maturity value of the loan?
a. ₱2,292,500.00
b. ₱2,115,000.00
c. ₱2,194,700.00
d. ₱2,195,800.00
13. Buboy deposited P300,000.00 in the bank. What is the maturity value of
Buboy’s money in three years if the bank offers a simple interest of 1% per
annum?
a. ₱309,000.00
b. ₱312,500.00
c. ₱314,500.00
d. ₱315,500.00
14. If a house is sold for P3,000,000.00 and the bank requires 10% down
payment, what is the amount of the mortgage?
a. ₱2,500,000.00
b. ₱2,600,000.00
c. ₱2,700,000.00
d. ₱2,800,000.00
15. Using exact interest, what is the amount due (maturity value) on P40,000.00
invested at 9% simple interest for 150 days?
a. ₱41,639.73
b. ₱41,739.73
c. ₱41,479.45
d. ₱41,939.73
Congratulations! You have done a great job! You are now done with this
module on Solving Problems Involving Simple Interest. I hope that you have
enjoyed and learned a lot. Now, get ready and be excited for the next module!
Additional Activities
Wow! You did a very good job! Solving problems involving Simple Interest may
be a little complicated but it is used in real life situations. Enumerate real-life
situations wherein solving Simple Interest can be applied.
1. _____________________________________
2. _____________________________________
3. _____________________________________
4. _____________________________________
5. _____________________________________
15
16
Teaching Guide for Senior High School Business Mathematics (pp 85-99)
Business Mathematics (Textbook) (pp 101-109)
General Mathematics (LM) (pp 159-169)
References
What I Know What’s In What’s New
1. b Activity 1 Activity 2
SCRAMBLED WORD DECODED WORD
2. d
YFHRMVHH BUSINESS
3. a
IZGV RATE I P r t
4. c
NZIPFK MARKUP 1. N/A ₱50,000 4% 2 yrs.
5. a
6. d KVIXVMG PERCENT 2. N/A ₱120,000 6% 4 mon.
7. b WRHXLFMGH DISCOUNTS 3. ₱11,200 N/A 7% 2 yrs.
8. c YFBRMT BUYING
4. ₱100,000 ₱1M 1%
9. c ZMW AND
HVOORMT SELLING 5. ₱157,500 ₱500,000 N/A 3 yrs.
10. c
11. d
12. c
13. b
14. a
15. b
What’s More What I Can Do Assessment
Activity 3 Activity 5 1. c
1. DP = P 240,000.00 2. a
1. ₱11,200.00 3. b
2. I = P 2,500.00 4. a
2. ₱ 34,500.00
3. P = P 80,000.00 5. d
3. ₱ 4,000,000.00 6. c
4. r = 10.50% 7. d
4. ₱ 4,250,000.00 8. b
5. I = P 554.99
9. c
5. ₱ 129,687.50
10. c
11. d
12. b
13. a
14. c
15. c
Answer Key
Editor's Note
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