St.

Rose of Lima Catholic School,

Inc. Govt Permit SHSP No. 230 s. 2015
SENIORHGH SCHOOL DEPARTMENT Govt Permit SHSP No. 076 s. 2017
SY 2024
- 202
5

PERFORMANCE TASK IN GENERAL MATHEMATICS

Name: Chermel Faith R Cabrera Date:12/09/24

Zyriah Anne A Bumanlag

Grade and Section: _11-STEM 5_

INVESTMENT COMPARISON REPORT

I. Introduction
The two most common methods of calculating interest are simple interest and compound interest.
Simple interest is a straightforward method where interest is calculated solely on the principal amount
throughout the investment or loan period. It is commonly used for short-term loans and investments,
offering simplicity and ease of calculation. In contrast, compound interest involves calculating interest
on the principal as well as on any accumulated interest from previous periods, leading to exponential
growth over time.

II. Calculations

Option A: Simple Interest (5% per Annum)

Year 1:
Given:
P= ₱50,000
r= 5% ÷ 100 = 0.05
t= 1 year
f= ?
Formula:
Is=P⋅R⋅T
F=P+Is

Is=50,000⋅0.05⋅1 = ₱2,500
F=50,000+2,500 = ₱52,500

Year 3:
Given:
P= ₱50,000
r= 5% ÷ 100 = 0.05
t= 3 years
f= ?

Formula:
Is=P⋅R⋅T
F=P+Is

Is=50,000⋅0.05⋅3 = ₱7,500
F=50,000+7,500 = ₱57,500
SY
SENIOR
St. 2024
-HGH
Rose202 SCHOOL
of Lima DEPARTMENT
Catholic School,
Inc. Govt Permit SHSP No. 230
076 s. 2015
2017
5

Year 5:
Given:
P= ₱50,000
r= 5% ÷ 100 = 0.05
t= 5 years
f= ?

Formula:

Is=P⋅R⋅T
F=P+Is

Is=50,000⋅0.05⋅5 = ₱12,500
F=50,000+12,500 = ₱62,500
Option B: Compound Interest (5% Annually, Compounded Quarterly)

Year 1:
Formula:

( )
nt
r
F=P 1+
n
Given:
 P = ₱50,000
 r = 5% ÷ 100 = 0.05
 n = 1 (annually)
 t = 1 year
 F=?

( )
1(1)
0.05 1 (1)
F=50,000 1+ F=50,000 ( 1+0.05 )
1
1
F=50,000 ( 1.05 )
❑
F=50,000(1.05)

F=₱ 52,500

Is = F-P
Is= 52,500 – 50,000
Is= ₱2,500

Year 3:
Formula:

( )
nt
r
F=P 1+
n

Is = F-P

Given:
 P = ₱95,000
 r = 5% ÷ 100 = 0.05
 n = 1 (annually)
 t = 3 years
 F =?

( )
1(3)
0.05 1 (3)
F=50,000 1+ F=50,000 ( 1+0.05 )
1
3 ❑
F=50,000 ( 1.05 ) F=50,000(1.157625)

F=₱ 57,881.25

Is = F-P
Is= 57,881.25 – 50,000
Is= ₱7,881.25

Year 5:

Formula:

( )
nt
r
F=P 1+
n

Is = F-P
Given:
 P = ₱95,000
 r = 5% ÷ 100 = 0.05
 n = 4 (quarterly)
 t = 6 years
 F =?

( )
1(5)
0.05
F=50,000 1+ F=50,000 ( 1+0.05 )1 (5)
1
5 ❑
F=50,000 ( 1.05 ) F=50,000(1.2762815625)

F=₱ 63,814.08

Is = F-P
Is= 63,814.08 – 50,000
Is= ₱13,814.08

III. Comparison

Comparison Based on our understanding, we discovered that compound interest is more effective than
simple. In this output, we can see that within the first year, both simple and compound have the same
₱2,500 interest. However, in the next 3 years, simple interest only grew ₱7,500 while compound interest
grew ₱7,881. In the year 5, simple interest got ₱12,500 and the compound interest got ₱13,814,
completely growing larger than the simple interest. In these following years, we can clearly tell that
compound interest is more effective as it does not solely focus on the original amount or the principal
which means the interest stays the same every year, a complete opposite to compound interest.
IV. Visual Representation

Table Comparison

Year Simple Interest (PHP) Compound Interest (PHP)

1 ₱52,500 ₱52,500

3 ₱57,500 ₱57,881.25

5 ₱62,500 ₱63,814.08

Graph Comparison
 Simple Interest Vs Compound Interest

65,000

55,000

45,000
Simple Interest
35,000 Compound Interest
25,000

15,000

5,000
Year 1 Year 3 Year 5
Simple Interest 52500 57500 62500
Compound Interest 52500 57881.25 63814.08

Here is the graph comparing the growth of investments for Simple Interest and Compound Interest
(Quarterly Compounding).

V. Recommendation
We recommend compound interest more as when it comes to growing your money, compound
interest is often the better choice. Unlike simple interest, which only earns interest on the original
amount you invest or borrow, compound interest allows you to earn interest on both the principal
and the interest that builds up over time. This makes your money grow faster. As what is seen on
this output, within the first year, simple interest have the same value as compound interest at
₱2,500. However, it quickly grew larger than the simple interest as the years passes by because
the interest goes up each year.
Conclusion:
In conclusion, if you want your savings to grow more quickly, compound interest is the smarter choice. It
helps you make the most of your money over time.

Submitted to: Bebe Jane Gonzales