GENERAL MATHEMATICS
SIMPLE INTEREST
At the end of the lesson,
you are expected to:
• compute interest,
future value, and
present value, time,
OBJECTIVES and rate in simple
interest environment;
and
• solve problems
involving simple
interest
SIMPLE INTEREST
– interest that is computed on the
principal and remains constant
throughout the term.
Is = Prt
where:
Is = simple interest
P = principal
r = simple interest rate
t = time (in years)
ADDITIONAL FORMULA:
• Simple Interest Is = Prt
Is
• Principal P=
𝐫𝐭
Is
• Rate r=
𝐏𝐭
Is
• Time t=
𝐏𝒓
• Future Value F = P + Is or F = P(1 + rt)
EXAMPLES
EXAMPLE 1:
Given: Solution:
P = ₱10,000 Is = Prt
r = 5% = (10,000)(0.05)(5)
t = 5 years Is = ₱2,500
Is = ?
EXAMPLE 2:
Given: Solution:
P = ₱20,000 Is
r=
Is = ₱4,000 Pt
4,000
=
t = 4 years (20,000)(4)
4,000
r=? = 80,000
r = 0.05 = 5%
EXAMPLE 3:
Given: Solution:
P = ₱40,000 Is
t=
r = 7% Pr
8,400
=
Is = ₱8,400 (40,000)(0.07)
8,400
t=? = 2,800
t = 3 years
EXAMPLE 4:
Given: Solution:
Is = ₱10,000 Is
P=
r = 8% rt
10,000
=
t = 5 years (0.08)(5)
10,000
P=? = 0.4
P = ₱25,000
EXAMPLE 5:
Given: Solution:
P = ₱15,000 Is = Prt
t = 3 years = (15,000)(0.02)(3)
r = 2% Is = ₱900
F=?
F = P + Is
= 15,000 + 900
F = ₱15,900
EXAMPLE 5:
Given: Alternative Solution:
P = ₱15,000 F = P(1 + rt)
t = 3 years = (15,000)[1 + (0.02)(3)]
r = 2% = (15,000)[1+ 0.06]
F=? = (15,000)(1.06)
F = ₱15,900
ASSIGNMENT
ASSIGNMENT:
Complete the table below by solving for the unknown.
Principal Simple Interest Rate Time Simple Interest Future Value
(P) (r) (t) (Is) (F)
₱25,000 5% 10 years
₱45,000 8 years ₱14,400
₱50,000 12% ₱30,000
8% 3 years ₱24,000
₱250,000 2% ₱350,000
SOLVING PROBLEMS
INVOLVING SIMPLE
INTEREST
PROBLEM 1:
Mariel deposited ₱16,000 in a bank that offers a simple interest
rate of 1.75%. If she placed the money for 7 years, how much
interest will she earn?
Given: Solution:
P = ₱16,000 Is = Prt
r = 1.75% = (16,000)(0.0175)(7)
t = 7 years Is = ₱1,960
Is = ? Therefore, Mariel will earn an interest of ₱1,960.
PROBLEM 2:
Janice has a loan with a simple interest rate of 1.5%. The amount of
interest is ₱2,250 for a period of 3 years. How much is her loan?
Given: Solution:
r = 1.5% Is
P=
Is = ₱2,250 rt
2,250
t = 3 years = (0.015)(3)
P=? =
2,250
0.045
P = ₱50,000 Therefore, Janice had a loan of
₱50,000.
PROBLEM 3:
Marinel received ₱ 1,000,000 as her inheritance from her parents. She
deposited the said amount in a time deposit with 1% simple interest
rate per annum. How much money will be accumulated after 7 years?
Given: Solution:
P = ₱1,000,000 F = P(1 + rt)
r = 1% = (1,000,000)[1 + (0.01)(7)]
t = 7 years = (1,000,000)[1+ 0.07]
F=? = (1,000,000)(1.07)
F = ₱1,070,000