SIMPLE INTEREST - GENERAL MATHEMATICS (MELCS aligned)

this presentation discusses about simple interest. A lesson for Grade 11 students taking up General mathematics subject.

1. IMPORTANT TERMS TO REMEMBER LENDER OR CREDITOR - person or institution who invests the money or makes the funds available BORROWER OR DEBTOR - person or institution who owes the money or avails of the funds from the lender ORIGIN or LOAN DATE - date on which money is received by the borrower

2. REPAYMENT DATE or MATURITY DATE - date on which the money borrowed or loan is to be completely repaid TIME or TERM(t) - amount of time in years the money is borrowed or invested; lenght of time between the origin and maturity dates PRINCIPAL (P) - amount of money borrowed or invested on the origin date MATURITY VALUE or FUTURE VALUE (F) - amount after t years that the lender receives from the borrower on the maturity date

3. RATE (r) - annual rate, usually in percent, charged by the lender, or rate of increase of the investment INTEREST(I) - amount paid or earned for the use of money SIMPLE INTEREST (Is) - interest that is computed on the principal and then added to it COMPOUND INTEREST( Ic ) - interest is computed on the principal and also on the accumulated past interests

4. ANNUAL SIMPLE INTEREST Is = Prt MATURITY ( FUTURE) VALUE F = P + Is F = P (1 + rt )

5. SITUATION 1: Find the simple interest on a loan of P65,000 if the loan is given at a rate of 20% and is due in 3 years ? GIVEN: SOLUTION: Is = ? P = 65,000 Is = Prt t = 3 years Is = (65,000)(0.20)(3) r = 20% = 0.20 Is= 39,000

6. SITUATION 2: If you deposit P5, 500 in a bank at annual simple interest rate of 0.5%, how much money will you have after 12 years ? GIVEN: SOLUTION: F = ? P = 5, 500 F = P(1 + rt ) r = 0.5% or 0.005 F = 5, 500[ 1 + 0.005(12)] t = 12 years F = 5, 830.00

7. SITUATION 3: How much money should you deposit in a bank so that it will accumulate to P100,000 at 1% simple annual interest for 10 years ? GIVEN: SOLUTION: P = ? F = 100,000 P = F / (1 + rt ) r = 1% or 0.01 P = 100,000 / [ 1 + 0.01(10)] t = 10 years P = 90, 909.09

8. SITUATION 4: At what simple interest rate per annum will P20, 000 accumulate to P25, 000 in 3 years ? GIVEN: SOLUTION: r = ? P = 20,000 r = Is / Pt F = 25,000 r = 5,000 / [(20,000)(3)] t = 3 years r = 0.0833 = 8.33% Note: Find the interest amount first: I = F – P I = 25,000 – 20,000 = 5,000

9. SITUATION 5: How long will an amount of P50,000 gain a simple interest of P10,000 at 4% per annum? GIVEN: SOLUTION: t = ? P = 50,000 t = Is / Pr I = 10,000 t = 10,000 [(50,000)(0.04)] r = 4% = 0.04 t = 5 years

10. COMPLETE THE TABLE BY FINDING THE UNKNOWN PRESENT VALUE (P) RATE (r) TIME (t) INTEREST (I) MATURITY VALUE (F) 8,000 8 % 6 years (a) (b) 5, 000 (c) 1 month (d) 6,000 (e) 12 % 5 years and 3 months 400,000 a b c d e GO TO INDIVIDUAL ACTIVITY

11. (a) 3, 840

12. (b) 11, 840

13. © 2.4 = 240%

14. (d) 1,000

15. (e) 245, 398.77

16. INDIVIDUAL ACTIVITY Solve the following problems. Juan invested a certain amount at 10% simple interest per year. After 2 years, the interest he received amounted to P3, 000. How much did he invest? ANSWER Pedro borrowed P25, 000 at 10% annual simple interest rate. How much should he pay after 3 years and 6 months? ANSWER GO TO QUIZ

17. SOLUTION P = Is/rt P = 3000 (.10)(2) P = 15,000.00

18. SOLUTION F = P(1 + rt) F = 25,000(1 + (.10)(3.5)) F = 33, 750.00

19. QUIZ: SIMPLE INTEREST 1. Mr. Reyes borrowed P50,000 from a lending firm to start a mini store business. If the firm charges simple interest of 5%, how much must Mr. Reyes pay in three years? ANSWER 2. Vlad opens a bank account that gives a simple interest of 2%. How much should Vlad invest if he wants to save P20,000 after 2 years and 5 months? ANSWER 3. Ronald deposited P8,000 in a bank that gives 2.5% simple interest per year. How long will he wait if he wants it to accumulate to P10,000? ANSWER GO TO ASSIGNMENT

20. ANSWER TO QUIZ #1 GIVEN: SOLUTION P = 50,000.00 F = P (1 + rt) r = 5% = 0.05 F = 50,000[1 + (0.05)(3)] t = 3 years F = 57, 500.00

21. ANSWER TO QUIZ #2 GIVEN: SOLUTION F = 20,000.00 P= F/ (1 + rt) r = 2% = 0.02 P = 20,000/[1 + (0.02)(2.4166)] t = 2 years P = 19, 077.90 and 5 months

22. ANSWER TO QUIZ #3 GIVEN: SOLUTION F = 10,000.00 t = Is/Pr P = 8,000.00 Solve for Is first: r = 2.5% = 0.025 Is = F - P Is = 10,000 - 8,000 Is = 2,000 Solve for t: t = Is/Pr t = 2,000/(8,000)(0.025) t = 10 years

23. Assignment How much should you invest at 6% annual interest rate to obtain a simple interest of P72, 000 in 3 years?

24. answer to assignment GIVEN Is = 72, 000 r = 6% = 0.06 t = 3 YEARS SOLUTION: P = Is/rt P = 72,000/ (0.06)(3) P = 400,000.00

25. 1. Dorothy was saving money to buy a dairy farm in Mindanao. She deposited 50,000 in a bank that offered 6% simple interest per annum. How many years will it take for the deposit to grow to 62,000? QUIZ 2. Teresa borrowed 12,500 from a credit union. The loan was offered at 2% simple interest per year. If the time required to repay the loan was years, 3.75 years , how much is the interest paid? 3. When Juliet was 18 years old, she was left with a 75,500 inheritance from her grandma. Her parents deposited the amount into an account with an annual simple interest rate of 6%. How much will the account have in 10 years and 6 months?