I.

Identification

1. ______ ______ is a straightforward method of calculating interest on a loan or deposit. It is

based on the initial principal amount, and the interest remains constant throughout the entire term
of the loan or investment.

2. What is the formula of simple interest?

3. The _____ is required to return both the original principle amount and accumulated interest
while repaying the loan.

4. It is the amount which is the initial amount borrowed or invested.

5. It refers to the duration of the principal amount. Usually expressed in years or months.

II. Directions: Solve each of the interest problems and show your solution.

1. Find the simple interest and amount in each of the following:

(a) P = ₱1800 R = 5% T = 1 year

(b) P = ₱2600 R = 12% T = 3 years

(c) P = ₱3125 R = 15% T = 73 days

(d) P = ₱5660 R = 11% T = 9 months

(e) P = ₱180 R = 3% T = 1¹/₄ year

2. You are starting your own small business in Laguna. You borrow ₱10,000.00 from the bank at
a 9% rate for 5 years. Find the interest you will pay on this loan.

3. You are tired at the end of the term and decide to borrow ₱5,000.00 to go on a trip to
Whatever Land. You go to the bank and borrow the money at 11% for 2 years.

a) Find the interest you will pay on the loan.

b) How much will you have to pay the bank at the end of the two years?

4. a) Find the interest on a loan of ₱2,500.00 that is borrowed at 9% for 7 months.

b) How much would it cost to repay the loan from 3a) above?

5. Dave borrows $1500 to repair his house. He will pay off the loan after 3 years by paying back
the principal plus 3.5% interest for each year. How much will he pay in interest, and how much
will he pack back altogether.
6. Ann opens a saving account with a deposit of ₱670. She will earn 1.5% interest each year on
her money. How much interest will she earn over a period of 10 years?

7. A bank lends ₱4,000.00 on loan to a businessman in simple interest. If he promises to pay ₱20
every month for a period of two years. What is the interest rate on the loan per annum?

8. A person deposits ₱5,000.00 in a bank in simple interest; he finds ₱6,200.00 after two years in
the account. What is the rate of interest per annum?

9. Brit opened a savings account that fetches him 4% interest. Brit estimates that assuming he
neither adds to nor withdraws from his account, he will earn ₱300 in interest after 4 years. How
much did Brit deposit when he opened the account?

10. Alex borrowed money for school. He took out a loan that charges 5% simple interest. He will
end up paying ₱800 in interest after 5 years. How much did Alex borrow for school?

Answer Key:

I.

1. Simple Interest

2. S.I = P x r x T

3. borrower

4. principal

5. Time

II.

1. (a) ₱90, ₱1890

(b) ₱936, ₱3536

(c) ₱93.75, ₱3218.75

(d) ₱466.95, ₱6126.95

(e) ₱6.75, ₱186.75

2. ₱4,500

3. (a) ₱1,100

(b) ₱6,100
4. (a) ₱130.50

(b) ₱2,630.50

5. ₱157.50, ₱1,657.50

6. ₱100.05

8. 12%

9. ₱1,875

10. ₱3,200