Business Mathematics Simple Interest.pptx

Grade 11

1. Simple Interest Grade 11 - ABM

2. Interest Interest is the charge or fee paid for using somebody’s money. Interest is jointly proportional to the amount involved and the length of time it is in use . That’s is, the bigger the amount, the higher the interest. Similarly the longer the time money is used, the higher is the interest.

3. Interest Another factor that affects interest is the interest rate or the rate paid for the use of money. This rate, however, is determined by supply and demand. The bigger the demand for money, the higher the interest rate to be paid, and vice versa.

4. Loans A thing that is borrowed, especially a sum of money that is expected to be paid back with the interest.

5. Types of Loans Secured Loan – it is one in which a collateral is provided for a loan to be released. A very common example of a secured loan is a mortgage loan that is used to buy something such as a car or a house. Unsecured Loan – it is not secured against the borrower’s assets. This may include personal loans, credit card debts, and peer-to-peer lending.

6. Interest Where, I – Interest P – Principal r – rate t – time A – Total Amount paid I = Prt A = P+I

7. Example: Jullie has ₱12,000 in a savings account. If the amount is kept in the bank without additional deposits or withdrawals, how much interest will she earn in 1 year if the bank credits interest at 3% per annum?

8. Interest If the time express in month:   Exact interest:   Ordinary Intrest :  

9. Example: Mang Ador borrowed ₱24,000 from a bank that charges an interest of 5%. How much should he repay after 2 years and 8 months? Steve got a ₱31,500 loan from a friend who charges 3% annual interest . If the money is returned after 90 days, how much is the exact interest? ordinary interest?

10. Interest If the principal P is to be determined:   If the interest rate r is to be determined:   If the time t is to be determined:  

11. Example: Joana paid ₱16,800 interest for a loan at the rate of 7% simple interest for 2 years. How much was the loan amount? Earnest got a mortgage loan of ₱235,000 and repaid it with ₱240,875 after 6 months. With what the interest rate was he charged? Elena invested ₱300,000 in a fund that credits 3% per annum. How long her investment earn ₱1,500 ?

12. Exercises: Principal rate time Interest Amount 1 ₱20,000 6% 2 9% 15 months ₱5,400 3 ₱36,000 4 ₱87,000 5 years and 2 months ₱10,113.75 5 2% 4 years and 3 months ₱81, 375 Principal rate time Interest Amount 1 ₱20,000 6% 2 9% 15 months ₱5,400 3 ₱36,000 4 ₱87,000 5 years and 2 months ₱10,113.75 5 2% 4 years and 3 months ₱81, 375

13. Thank You For Listening Prepared by: Dustin A. Limbo