General SENIOR

HIGH
Mathematics SCHOOL

Problem Solving in Simple and Module

Compound Interest 3
Quarter 4
General Mathematics
Quarter 4 – Module 3: Problem Solving on Simple and Compound Interest
First Edition, 2020

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Published by the Department of Education Division of Pasig City

Development Team of the Module

Writer: Marivic R. Laynesa
Editors: Nenet M. Peñaranda
Reviewers: Christopher J. Cruz
Illustrator:
Layout Artist:
Management Team: Ma. Evalou Concepcion A. Agustin
OIC-Schools Division Superintendent
Carolina T. Rivera, Ed. D.
OIC-Assistant Schools Division Superintendent
Victor M. Javeña, Ed. D.
Chief - School Governance and Operations Division
Manuel A. Laguerta EdD
Chief - Curriculum Implementation Division

Education Program Supervisors

1. Librada L. Agon, Ed. D., EPP/TLE
2. Liza A. Alvarez, Science
3. Bernard R. Balitao, Araling Panlipunan
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5. Norlyn D. Conde, Ed. D., MAPEH
6. Wilma Q. Del Rosario, LRMS
7. Ma. Teresita E. Herrera, Ed. D., Filipino
8. Perlita M. Ignacio, Ph. D., ESP/SPED
9. Dulce O. Santos, Ed. D., Kinder/MTB
10. Teresita P. Tagulao, Ed. D., Mathematics

Printed in the Philippines by the Department of Education Division of Pasig City.

General SENIOR
HIGH

Mathematics SCHOOL

Module

3
Quarter 4
Problem Solving in
Simple and Compound
Interest
Introductory Message

For the facilitator:

Welcome to the General Mathematics for Senior High School Module on Problem
Solving in Simple and Compound Interest!

This module was collaboratively designed, developed and reviewed by educators

from Schools Division Office of Pasig City headed by its Officer-In-Charge Schools
Division Superintendent, Ma. Evalou Concepcion A. Agustin in partnership with
the Local Government of Pasig through its mayor, Honorable Victor Ma. Regis N.
Sotto.
The writers utilized the standards set by the K to 12 Curriculum using the Most
Essential Learning Competencies (MELC) while overcoming their personal, social,
and economic constraints in schooling.

This learning material hopes to engage the learners into guided and independent
learning activities at their own pace and time. Further, this also aims to help
learners acquire the needed 21st century skills especially the 5 Cs namely:
Communication, Collaboration, Creativity, Critical Thinking and Character while
taking into consideration their needs and circumstances.

In addition to the material in the main text, you will also see this box in the body of
the module:

Notes to the Teacher

This contains helpful tips or strategies
that will help you in guiding the learners.

As a facilitator you are expected to orient the learners on how to use this module.
You also need to keep track of the learners' progress while allowing them to
manage their own learning. Moreover, you are expected to encourage and assist the
learners as they do the tasks included in the module.
For the learner:

Welcome to the General Mathematics Module on Problem Solving in Simple and

Compound Interest!

The hand is one of the most symbolized part of the human body. It is often used to
depict skill, action and purpose. Through our hands we may learn, create and
accomplish. Hence, the hand in this learning resource signifies that you as a
learner is capable and empowered to successfully achieve the relevant
competencies and skills at your own pace and time. Your academic success lies in
your own hands!

This module was designed to provide you with fun and meaningful opportunities
for guided and independent learning at your own pace and time. You will be
enabled to process the contents of the learning material while being an active
learner.

This module has the following parts and corresponding icons:

Expectation - These are what you will be able to know after completing the
lessons in the module

Pre-test - This will measure your prior knowledge and the concepts to be
mastered throughout the lesson.

Recap - This section will measure what learnings and skills that you
understand from the previous lesson.

Lesson- This section will discuss the topic for this module.

Activities - This is a set of activities you will perform.

Wrap Up- This section summarizes the concepts and applications of the
lessons.

Valuing-this part will check the integration of values in the learning

competency.

Post-test - This will measure how much you have learned from the entire
module. Ito po ang parts ng module
 EXPECTATION

Lesson 3: Problem Solving on Simple and Compound Interest

Learning Objective:

At the end of the learning episode, you are expected to:

1. solve problems involving simple and compound interests.

PRETEST

Directions: Determine the missing term or value in relation to the

problem.
Michelle deposits ₱ 420,000.00 in a savings account and leaves it there for 8
years to accumulate interest at 10% compounded quarterly.
Value Term
₱ 420,000.00 1. ______________________
8 years 2. ______________________
10% 3. ______________________
4. ___________________ Compound quarterly
5. ___________________ Future Value
6. ___________________ Interest

RECAP

Simple Interest vs. Compound Interest

Other variation of formulas for Compounding more than once a
simple interest year
Compounding Period – it pertains
𝑰𝑺 𝑰𝒔 𝑰𝒔 to the interval for compounding.
𝑷= ;𝒓= ;𝒕=
𝒓𝒕 𝑷𝒕 𝑷𝒓
𝒓 𝑲𝒕
𝑨 = 𝑷 (𝟏 + )
𝑲
𝒓
where is called the periodic rate
𝑲
 Compounding K
Annual 1
Semi-annual 2
Quarterly 4
Monthly 12
Daily 365

LESSON

How to solve problems about interest?

Simple Interest Problem Compound Interest Problem
1. Lourdes wants to save money to 1. Ellie reflecting in the whole sale
buy the school supplies for the furniture sales of her business which
coming school year, so her sale increased by 10% per year. If she
products online. Suppose she earn invested money in the business
₱2,500.00 and deposit it into an worth P800,500.00. How much she
account that earns simple interest of will earn after 15 years?
3%. After 5 months, how much is her Given:
money now? P= P 800,500.00
Given: r=10% or 0.10 compounded annually
P=₱2,500.00 t= 15 years
r= 3% or 0.03 A = _______
t=5 months ( 5/12 years) Solution:
Is =________ 𝐴 = 𝑃 (1 + 𝑟 )𝑡
FV=_______ 𝐴 = 800,500(1 + 0.10)15
Solution: 𝐴 = 800,500(1.10)15
𝐴 = 800,500(4.177248169)
Is = Prt
𝐴 = 𝑃 3,343,887.16
= (2,500)(0.03)(5/12) Thus, after 15 years Ellie’s future
Is = 31.25 money will be P 3,343,887.16.
FV=P+ Is
FV= P 2,500+ P 31.25
FV= P 2,531.25
Therefore, after 5 months Lourdes
has an amount of ₱2,531.25.00.
Ordinary Interest or Banker's 2. Marivic wishes to save money in
Interest – interest based on a 360- the bank for her future. How much
day year. must she deposit in an account that
pays 7% interest compounded
Exact Interest – interest based on a quarterly to have a balance of P
365-day year 1,000.000.00 after 5 years? How
much interest she gain for her
2. You get a 180-day ₱350 000.00 money?
loan from a bank at a 7.5% interest. Given:
Calculate interest using (a) 360-day A= P 1,000.000.00
and (b) 365-day year. r= 7% or 0.07 compounded quarterly
t= 5 years
Given: Note: P = _______
P= P 350,000.00 180 Ic =_______
r= 7.5% or 0.075 𝑡= Solution:
360
t= 180-days or 0.5 years 𝒓 𝑲𝒕
1 𝑨 = 𝑷 (𝟏 + )
Is =______ 𝑡= 𝑜𝑟 0.5 𝑲
2 Derived formula
Solution: 𝑨
𝑷=
a.) 𝒓 𝑲𝒕
(𝟏 + 𝑲)
Is = Prt 𝟏, 𝟎𝟎𝟎, 𝟎𝟎𝟎
= (350,000.00)(0.075)(0.5) 𝑷= ( )( )
𝟎. 𝟎𝟕 𝟒 𝟓
Is = P 13,125.00 (𝟏 + 𝟒 )
Note: 𝟏, 𝟎𝟎𝟎, 𝟎𝟎𝟎
𝑷=
180 (𝟏 + 𝟎. 𝟎𝟏𝟕𝟓)𝟐𝟎
𝑡= 𝟏, 𝟎𝟎𝟎, 𝟎𝟎𝟎
365 𝑷=
(𝟏. 𝟎𝟏𝟕𝟓)𝟐𝟎
𝑡 = 0.49315068 𝟏, 𝟎𝟎𝟎, 𝟎𝟎𝟎
b.) 𝑷=
𝟏. 𝟒𝟏𝟒𝟕𝟕𝟖𝟏𝟗𝟔
Is = Prt 𝑷 = 𝟕𝟎𝟔, 𝟖𝟐𝟒. 𝟓𝟖
180 Compound Interest = Compound
= (350,000.00)(0.075)(365)
Amount – Principal
Is = P 12,945.21 Ic = A - P
Ic = P 1,000,000.00 – P 706,824.58
Thus, the ordinary interest is
Ic = P 293,175.42
P 13,125.00 while the exact
interest is P 12,945.21.
Hence, Marivic will deposit an
amount of P 706,824.58 and will
Note: A 360-day year is favorable for
gain an interest of P 293,175.42.
the lender while a 365-day year is
favorable for the borrower.
3. Christopher takes out a simple 3. Boni borrowed P 20,000.00 for 2
interest loan of P 10,000.00 at a rate years at 5% compounded semi-
of 7.5%. What is the total amount annually interest rate. How much
the he will pay if the loan is for 8 interest is that?
years? Given:
P= P 10,000.00 P= 20,000.00
r= 7.5% or 0.075 r=5% or 0.05 semi-annually
t= 8 years t=3years
FV=_________ Ic = ________
FV = P(1+rt) A = _______
FV = 10,000 [1+ 0.075(8)] Solution:
FV = 10,000 [ 1 + 0.6] 𝒓 𝑲𝒕
FV = 10,000 [1.6] 𝑨 = 𝑷 (𝟏 + )
𝑲
FV = 16,000.00
Thus, after 8 years Christopher will ( )( )
𝟎. 𝟎𝟓 𝟐 𝟑
pay a total of P 16,000.00. 𝑨 = 𝟐𝟎, 𝟎𝟎𝟎 (𝟏 + )
𝟐
𝑨 = 𝟐𝟎, 𝟎𝟎𝟎(𝟏 + 𝟎. 𝟎𝟐𝟓)𝟔
𝑨 = 𝟐𝟎, 𝟎𝟎𝟎(𝟏. 𝟎𝟐𝟓)𝟔
𝑨 = 𝟐𝟎, 𝟎𝟎𝟎(𝟏. 𝟏𝟓𝟗𝟔𝟗𝟑𝟒𝟏𝟖)
𝑨 = 𝟐𝟑, 𝟏𝟗𝟑. 𝟖𝟕
Ic = A - P
Ic = P 23,193.87 – P 20,000.00
Ic = P 3,193.87

Thus, the interest is P 3,193.87.

ACTIVITIES

ACTIVITY 1: PRACTICE 1

Directions: Solve the following problems.

A. Find the future value of the given principal amount.
1. ₱ 150,000.00 at 6% simple interest for 10 years.
2. ₱ 12,500.00 at 3.5% compounded semi-annually for 4 years
3. ₱ 36,000.00 at 9% compounded quarterly for 7 years

B. Find the present value that will generate the indicated future value
4. ₱ 280,300.00 at 8% compounded annually for 20 years.
5. ₱ 40,000.00 at 2% compounded monthly for 5 years.

ACTIVITY 2: KEEP PRACTICING

Directions: Solve the following problems.

1. Ken invested ₱64,600.00 in a savings account which pays 6%

interest compounded semi-annually. What will his balance be in 5
years?
 2. Brenda deposits ₱ 15,000.00 in a savings account which pays 4%
compounded monthly. Find the accumulated interest after 10
years.

3. What is the value of an investment of ₱ 3,500.00 after 2 years if it

earns 1.5% compounded quarterly?
1
4. Arnie borrowed ₱ 3,500.00 for 3 years at 7 2 % simple interest rate.
How much interest is that?

5. Jasmin loan ₱ 4,500.00 for 2 years and had to pay P 630 simple
interest at the end that time. What rate of interest did she pay.

ACTIVITY 3: PRACTICE 3

Directions: Solve the following problem.

A. You are offered Job A with a starting salary of P 24,000.00. Each year
for 10 years you will be given a 4% raise.
B. You are offered Job B with a starting salary of P 24,000.00. Each year
for 10 years you will be given a P 1,000.00 raise.
Make a wise decision. Which salary plan would you prefer?
Explain.

WRAP – UP

What are the different formulas in solving word problems about

interest?
Compounding Formula Other variation of formulas
(Simple interest)
𝒓 𝑲𝒕
𝑨 = 𝑷 (𝟏 + ) 𝑰𝑺 𝑰𝒔 𝑰𝒔
𝑲 𝑷= ;𝒓= ;𝒕=
𝒓𝒕 𝑷𝒕 𝑷𝒓
𝒓
where 𝑲 is called the
periodic rate

Ic = A - P
 VALUING

In our lesson, we have learned how to solve problems about interest

which leads to more interesting and engaging topic that captivates our mind
to scrutinize every details of it. Decision making is very important in all
aspects of life. We must acquire all relevant information and approach the
situation from a logical and rational perspective. Our intuition, judgement
and experiences always play major roles in the decision making to solve
problems in life.
I have here two different situations that we need a thorough
investigation to come up with a favorable outcome.
Business A: A business has a $10,000 profit in 2010. The profit increases
by $2,500 per year for 10 years.
Business B: A business has a $10,000 profit in 2010. The profit increases
by 25% per year for 10 years.
Based from the choices above, which business performance would you
rather own? Explain your answer.

POSTTEST

Choose the letter that corresponds to the correct answer.

1. Renzo borrowed P 4,000 for 5 years at 6% simple interest rate. How
much interest he needs to pay?
a. P 800.00 c. P 1,200.00
b. P 1000.00 d. P 1,500.00
2. Gillian deposited an amount of P 80,000.00 at 6% compounded semi-
annually for 8 years. If she has a compound amount of P 128,376.52,
how much does she gain after 8 years?
a. P 48, 376.52 c. P 176,753.04
b. P 84, 400.52 d. P 208,376.52
3. Clark paid the amount of P 86,000.00 at 8% simple interest for 3
years. How much does he borrowed?

a. P 16,645.16 c. P 69,354.84
b. P 43,220.18 d. P 102,645.16
4. Eva loan P 60, 000.00 at 12% simple interest for 3 years. At the end of
3 years, how much does Eva need to pay in the bank?
a. P 21,600.00 c. P 60,800.00
b. P 40,000.00 d. P 81,600.00
5. Ace borrowed P 5,000.00 for 3 years and had to pay P 1,350 simple
interest at the end of the term. What rate of interest did he pay?
a. 8% c. 10%
b. 9% d. 12%

KEY TO CORRECTION

P 505577.91 6.
P 925,577.91 5. 7% 5.
PERIOD 4. P 787.50 4.
RATE 3. P 3,606.39 3.
TIME 2. P 7362.49 2.
PRINCIPAL 1. P 86,817.00 1.
PRETEST Activity 2

B 5. 36, 199.10 P 5. compare to Job A.

D 4. 60, 137.86 P 4. higher salary
C 3. 67, 123.62 P 3. gives you much
A 2. 14,361.02 P 2. is Job B because it
C 1. 240,000.00 P 1. The better job offer
POSTTEST Activity 1 Activity 3
 REFERENCES

Del Rosario, Bernardo. 1999. Berzen’s Mathematics Dictionary. Diliman

Quezon City: ISA-JECHO Publishing.
Google. 2020. Simple Interest and Compound Interest.
[Link] July 15, 2020).
Larson, Roland, Kanold, Timothy and Stiff Lee. 1993. Elementary Algebra
Concepts and Models. Lexington, Massachusetts: D.C. Heath
and Company.
Nickolas, Steven. Simple Interest vs. Compound Interest: An Overview
[Link] July 15, 2020).
Oronce, Orlando. 2016. General Mathematics. Sampaloc , Manila:
Rex Book Store.