Simple Interest and Examples I PRT variables

Simple Interest

1. MATHEMATICS OF
INVESTMENT

2. Simple Interest
I = Prt
I = Interest ( Pesos)
P = Principal ( Pesos)
r = rate (%)
t = time (years)

3. Pt
I
r
rt
I
P
=
= tPrI= Pr
I
t=

4. Sample Problems:
1.Find the interest earned if P 2,300 is
deposited in a bank that gives 2 ¾%
simple interest rate for 3 years.

5. 2. How much must be invested in order
to earn an interest of P 3,400 in 4 years
an interest rate of 3.75% per annum?

6. 3.At what simple interest rate will P
45, 000 earn an interest of P 5,600
in 5 years and 6 months?

7. 4. When will P 12,000 increased to P
20,000 at an interest rate of 4 ½% per
annum?

8. Future Amount (F))rt(PF
IFP
PFI,IPF
+=
−=
−=+=
1

9. Present Value–it is the current
value of money which is due in the
future time.
Formula:rt
F
P
+
=
1

10. 1. Find the present value of P5,400 due in 3 years and 6
months if money is worth 3.56% simple interest. How much is
the amount of interest?

11. 2. Mr. Cruz borrowed money from Ms. Reyes
promising that he will pay an amount of P 45,000
at the end of 3 years at an interest rate of
5 ¾% per annum.
a) Find the original loan.
b) Find the interest earned.

12. 3. Jack invested P 35,000 in savings bank that gives
6 ¼% simple interest for 2 years and 5 months.
Calculate the amount at the end of 2 years and 5
months and the interest earned.

13. 4. Alfred projected that he will need P30,000 5 years
from now for the repair of his house. How much
must he invest today if money is worth 4.5% simple
interest?