GENMATH CLASS MS.

PRECIOUS ALIMOT

Welcome to
SECOND
QUARTER
 SIMPLE AND
COMPOUND INTEREST
MS. PRECIOUS ALIMOT
GENMATH CLASS MS. PRECIOUS ALIMOT

Class Objectives
ILLUSTRATE SIMPLE

AND COMPOUND

INTEREST.

DISTINGUISH

BETWEEN SIMPLE

AND COMPOUND

INTEREST
 GENMATH CLASS MS. PRECIOUS ALIMOT

DEFINITIONS OF TERMS

Lender or creditor Borrower or debtor Origin or loan date

person (or institution) who
person (or institution) who date on which money is
owes the money or avails of
invests the money or makes received by the borrower.
the funds from the lender.
the funds available.
 GENMATH CLASS MS. PRECIOUS ALIMOT

DEFINITIONS OF TERMS

Repayment date or Principal (P)

maturity date
amount of money borrowed
date on which the money
or invested on the origin date
borrowed or loan 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 .
 GENMATH CLASS MS. PRECIOUS ALIMOT

DEFINITIONS OF TERMS

Rate(r) Simple Interest (Is)

annual rate, usually in
interest that is computed on
percent, charged by the
the principal and then added
lender, or rate of increase
to it.
of the investment.

Interest (I)
amount paid or earned for

the use of money.

GENMATH CLASS MS. PRECIOUS ALIMOT

DEFINITIONS OF TERMS

Compound Interest Maturity value or future

(Ic) value (F)
interest is computed on amount after t years that the

the principal and also on lender receives from the

the accumulated past borrower on the maturity

interests. date.
 Look at these
Math Problems

“Suppose you won 10,000 pesos and you plan to

invest it for 5 years. A cooperative group offers

2% simple interest rate per year. A bank offers 2%

compounded annually. Which will you choose and

why?”
GENMATH CLASS MS. PRECIOUS ALIMOT
GENMATH CLASS MS. PRECIOUS ALIMOT
GENMATH CLASS MS. PRECIOUS ALIMOT
GENMATH CLASS MS. PRECIOUS ALIMOT