Professional Documents
Culture Documents
Junel Basarte
Mr. Christopher Pagulayan
Mr. Eugene Verdadero
Carla purchases an IPOD by
obtaining a simple interest
loan. The IPOD cost 40,000
pesos and the interest rate on
the loan is 7%. If the loan is
to be paid back in weekly
installment over 2 years,
calculate the amount of
interest paid over 2 years and
the total amount to be paid
back.
Interest is the sum of money paid for the
use of another person’s money. It is
expense to the one who borrows the money
and income to the one who lends the
money.
The amount of money borrowed or invested is
called principal (P). The sum of the principal
and the interest is called amount.
Simple Interest Formula
I=Prt
where;
I = Simple Interest
P = Principal
r = rate of Interest
t = length of time
When Interest is added to the
principal “at the end” of the
stipulated time, the total sum is
called the Future Amount (F).
F=P+I
Example #1:
Venus deposited 5,000
pesos in a bank at 6.5%
simple interest for 2
years. How much will
she earn after 2 years,
assuming that no
withdrawal were made.
Solution:
Given: I=Prt
P = 5,000 pesos I = (5,000)(0.065)(2)
r = 6.5% or 0.065
t = 2 years I = 650.00 pesos
I=?
Example #2:
Christian invested
30,000 pesos in the
stock market which
guaranteed an interest
of 6,500 pesos after 3
years. At what rate
would her investment
earn?
Solution:
I=Prt
Given:
6,500 = (30,000) (r) (3)
P = 30,000 pesos
r=? 6,500 = (30,000) (r) (3)
t = 3 years 6,500 = (90,000) (r)
I = 6500 pesos
6,500 (90,000)(𝑟)
=
90,000 (90,000)
r = 0.07 or 7%
Example #3:
Rachelle paid 7,400
pesos interest at
14.5% for a year
loan. What was the
original loan?
Solution:
Given: I=Prt
P=? 7,400 = P (0.145)(1)
r = 14.5% or 0.145 7,400 𝑃 (0.145)
=
t = 4 years (0.145) (0.145)
I = 7,400 pesos 7, 400
𝑃=
(0.145)
P = 51,034.48 pesos
Example #4:
Christopher borrowed
35,000 pesos from a
book at 12.5% simple
interest for 5 years.
How much will she
pay the bank after 5
years.
Solution:
I=Prt
Given: I = (35,000)(0.125)(5)
P = 35,000 pesos
I = 21,875 pesos
r = 12.5% or 0.125
t = 5 years
I=? F=P+I
F=? F = 35,000 + 21,875
F = 56, 875 pesos
Example #5:
If 4,500 pesos is the
interest at 10%
after 3 months, how
much was
borrowed?
Solution:
I=Prt
Given: 3
4,500 = P (0.1)( )
12
P=?
4,500 = P (0.1)(0.25)
r = 10% or 0.1
t = 3 months 4,500 = P (0.025)
I = 4,500 pesos 4,500 𝑃 (0.025)
=
0.025 0.025
P = 180, 000 pesos
Summary:
Simple Interest
I=Prt F=P+I
Drill #1:
How long will it take for 5,000
pesos to become 6,500 pesos at 6%
simple interest.
Drill #2: