SIMPLE

INTEREST
GRADE 11 ABM BUSINESS MATH
 After the discussion, students are
expected to:

1.Determine the meaning of interest,

simple interest and its 3 factors

OBJECTIV 2.Evaluate the interest, principal, rate,

time.
ES: 3.Use the 6% 6-day method

4.Derive the different formula from the

original formula.

5.Be mindful of the different conditions

in investing and borrowing.
REVIEW !!!
Decimal

X
Percent

Fractions
Fraction

X
X

Percent
X

Fractions
 • Interest-  is defined as an
income derived from an invested
capital or as a payment for the
use of money. 
INTEREST
The interest depends on these 3
factors namely, PRINCIPAL,
RATE and TIME.
 GUESS:

PRINCIPAL
 denoted as P, the
PRINCIPAL sum borrowed
or invested.
 GUESS:

RATE
RATE

represented as r, the ratio between the

interest earned in a certain period of time
and the principal.
 GUESS:

TIME
Time

commonly represented as t, the period for

which the money is to be used. It is always
converted in years
Months 12
Weeks 52

Days 360
 Simple
Interest A type of interest that is
computed on the original
principal only. It is found by
multiplying the principal,
 Formula: time and rate of interest.

I = Prt
 A man borrowed P15000 at the rate of 8%
per annum payable at the end of one year.
Find the simple interest.
Given: Solution:
P = 15000
I = Prt
R = 8% 0.08
EXAMPLE T = 1 year I = (15000) (0.08)(1)
I=? I = P 1200
Formula: I= Prt
 • Computation is made easy if a
6% 6-day method of
computing interest is used.
6% 6-day
Method interest is computed by
multiplying 0.001 for 6 days and
by 0.01 for 60 days.
 FACTORS 6% 6-DAY 6% 60-DAY

P 1000 1000

PROVING R 6% = 0.06 6% = 0.06

T 6DAYS = 1/60 60DAYS = 1/6

RT 0.06/60=0.001 0.06/6 = 0.01

 Find the interest earned if P6500 is
invested at 12% for 60days.

Given:
P= 6500 I=?
R= 12% (6%*2)
EXAMPLE T= 60days 1/6
Use 6% 60-day method:
I= (6500)(0.01)
= 65 (only for 6%)
= 65*2
I= P130
 REMEMBER M
FORMULAS:

.-.
I = Prt

P = I / rt

x x r = I / Pt
t = I / Pr
 How much should Mrs. Bona invest today so
that her money earns P125 at 6% for 10
months?

Given: Formula :
I = 125 P = I / rt
EXAMPLE R = 6% or 0.06
T = 10mos or 5/6
P=?

Solution:
P = 125 / ( 0.06) (5/6)
= P2500
 Mrs. Lita Latar borrows P3200 payable after
five months. If her money earns P160 simple
interest, find the rate of interest.

Given: Formula :
P = 3200 r = I / Pt
EXAMPLE I = 160
T = 5 mos or 5/12
R =?

Solution:
P = 160 / (3200) (5/12)
= 0.12 12%
 How long will it take P5800 to earn P348 if
the money is invested at 8% simple interest?

Given: Formula :
P = 5800 t = I / Pr
EXAMPLE I = 348
R = 8% or 0.08
t=?

Solution:
P = 348 / (5800) (0.08)
= 3/4 year or 9 months
ASSIGNMENT: Complete the following using the formula.

I P r t
P1500 6% 6 months

P5600 5% 10 months

P800 12% 240 days

P130 P6500 3 months

P278.20 P7200 6 ½%
Thank you!!!