Solving Problems Involving Simple and Compound Interest

Group #3
Michaela Domingo, Chloe Evangelista, Sarah Palomero
Nathan Deoferio, Mehilo Reyes
 C O N T E N T S

1 Recall 3 Quiz
A quiz about our lesson.

2 Solve
 01
Recalling
1 Recalling

A simple interest is a
quick and easy method
of calculating the
interest change on a
Compound Interest
loan. It is a loan or an investment
whose value grows rapidly over
Simple Interest It is calculated by multiplying time.
the daily interest rate by our
principal and then by the
number of days between Compound Interest
payments.
It is the addition of interest
to the principal sum of a loan
Simple Interest or deposit, or in other words,
interest on principal plus
interest.
1 Recall
Simple Interest Formula
1 An interest is fee paid or earned for
borrowing money or other assets
1 Interest
The principal is the amount or
2 Principal (Initial Value) 2 the money we borrow.

3 Interest Rate 3
An interest rate usually indicates the
amount you are charged for
borrowing money

I = Prt
1 Recall

Can I borrow 20
pesos? I’ll repay you Thank you for lending
me your money, here,
later on with a 5%
interest.
Okay! have 21 pesos back.

Formula: P = 20 pesos
Principal x Interest = Final Amount I = 5% / 0.05 20 x 0.05 = 21 pesos
1 Recall
Simple Interest Formula
1 An interest is fee paid or earned for
borrowing money or other assets
1 Interest
The principal is the amount or
2 Principal (Initial Value) 2 the money we borrow.

3 Interest Rate 3
An interest rate usually indicates the
amount you are charged for
borrowing money

I = Prt
4 Time The amount of time over which
4 an asset or money is invested
1 Recall
Compound Interest Formula The final amount, or the total amount of

1 Amount
1 money after the compounding period.

This represents the original

2 Principal (Initial Value) 2 amount or initial amount.

3 Interest Rate An interest rate usually indicates the

3 amount you are charged for
borrowing money
4 Number of times interest applied per time period
It is the number of time and interes
4 is compounded annually
5 Time
The amount of time over which
5 an asset or money is invested in
years
 02
Solving
 2 Solving
Example 1: Michael’s father was hospitalized. For this, Michael had to borrow
₱25,000 from the bank payable for three years with 5% annual interest rate.
How much will he pay as additional charge?

Identify Substitute Solve Final Answer

P = ₱25,000 I = (₱25,000)(0.05)(3) I = (₱25,000)(0.05)(3)
R = 5% or 0.05 I = (₱1,250)(3)
t = 3 years I = ₱3,750 I = ₱3,750
I = Prt
 2 Solving
Example 2: Find the interest earned by Dominic after he invested his ₱40,000 at
the end of 3 years at 5% compounded bimonthly.

Identify Substitute Solve Final Answer

P = ₱40,000
r = 5% or 0.05
nasa board, nakasulat nasa board
t = 3 years
n = bimonthly (6)
F = ₱46,444
 2 Solving
Example 3: Deka deposits ₱520 into a savings account that has a 5% interest
rate compounded monthly. What will be the balance of Deka’s savings account
after three years?

Identify Substitute Solve Final Answer

(12)(3)
P = ₱520 nasa board
R = 5% or 0.05
t = 3 years
n = monthly (12) I = ₱603.97
03
Quiz
3 Quiz
1 2 3
What is it called for the amount This indicates the amount you are Who is the one who
of money we borrow? charged for borrowing money. “lends” the money?
Choices: Choices: Choices:
• Principal • Utang • Borrower/Debtor
• Amount • Interest Rate • Third-party
• Interest • Final Amount • Lender/Creditor
• Meowny 4 • Principal 5 • Bank
Ms. Celine decided to set aside ₱200 each
What is the formula for time she receives her paycheck, gradually
“Compound Interest”? increasing it by 5% each salary, which is given
monthly. What is the missing component in
this problem and what is the formula needed
to find that component?
 3 Quiz
6 7
You borrowed ₱10,000 from your If an investment earns 5% that is
friend. Your friend asks you for a compounded monthly, find the
3% interest once you pay them value of an initial investment of
back, how much will you pay them ₱7,000 after 6 years.
back on the 6th month?
Choices: Choices:
• ₱160 • ₱9,500.13
• ₱150 • ₱7,005.6
• ₱10,003 • ₱9,443.13
• hindi ko alam, • ₱7,350
humss ako
 3 Quiz

8 15
Enumerate both
Simple and Compound Interest
Formula Parts and give the
definition for each part

Note: walang specific order

THANK YOU
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