SIMPLE INTEREST

A REVIEW
 A bank offers 0.25% 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?

Given: P = 1,000,000 I = 0.25% = 0.0025 t = 1 year

 How much interest is charged when
P50,000 is borrowed for 9 months at an
annual interest rate of 10%?

9
Given: P = 50,000 r = 10% = 0.10 t = year = 0.75 years
12
Maturity (Future) Value

a. F = P + Is

b. F = P(1 + rt)
Example 1:
Find the maturity value if 1
million pesos is deposited in a bank
at an annual simple interest rate of
0.25% after
(a) 1 year (b) 5 years?
QUIZ
1. How much should you invest at the simple
interest is 7.5% in order to have P300,000 in 2 years

2. How much money will you have after 4 years

and 3 months if you deposited P 10,000 in a bank
that pays 0.5% simple interest?

3. How long will 1 million pesos earn a simple

interest of 100,000 at 1% per annum?

4. How much should you invest at the simple

interest is 7.5% in order to have P300,000 in 2
years