Activity Sheet on Compound Interest (Module 1)
Name: ____________________________________ Grade & Section: ___________________________ Date: __________________
I. Identification. Read and understand the following items. Write the correct answer on the space before the number.
__________________________1. interest gained on both the principal and any interest that has been earned in the past
__________________________2. the number of periods in a year the interest will be compounded
__________________________3. the interest percentage per conversion cycle
__________________________4. a conversion period where its computation occurs twice a year
__________________________5. a conversion period where its computation four times a year
II. Multiple Choice. Write the letter of the correct answer on the space provided before each number.
1
_____6. 7 % is equivalent to a. 0.714 b. 0.725 c. 0.714 d. 0.0725
4
_____7. An interest resulting from the periodic addition of simple interest to the principal amount.
a. Compound amount b. Compound interest c. Interest rate d. Simple interest
_____8. What is the formula in computing the maturity/final value F in a financial transaction involving compound interest?
a. F = P(1 + i)n b. F = P(1 + i)−n c. F = P(1 − i)n d. F = P(1 − i)−n
For items 9-14, Refer to the problem below.
Danaya deposited ₱8,000.00 in a bank that pays 6% compounded quarterly. She decided to deposit it for 5 years.
_____9. Which of the following is the present / principal amount?
a. 6% b. ₱8,000.00 c. 5 years d. None of these
_____10. What is the number of conversion periods in a year?
a. 1 b. 2 c. 4 d. 12
_____11. Which of the following is periodic rate? a. 0.06 b. 0.03 c. 0.005 d. 0.015
_____12. What is the total number of conversion period? a. 5 b. 10 c. 60 d. 20
_____13. Which of the following is the appropriate mathematical equation to solve the problem?
a. F = 8000(1 + 0.06)5 b. F = 8000(1 + 0.03)10 c. F = 8000(1 + 0.005)60 d. F = 8000(1 + 0.015)20
_____14. What is the maturity value of Danaya’s money after 5 years?
a. ₱ 10,774.84 b. ₱ 10,705.80 c. ₱ 10,751.33 d. ₱ 10,790.80
_____15. How much was the interest if Avria invested ₱40,000.00 at the rate of 5% compounded semi-annually at the end of 10 years?
a ₱25,880.38 b. ₱25,744.78 c. ₱25,544.66 d. ₱25,155.79
_____16. How much is the future value on this financial transaction, P = ₱30,000.00, r = 8%, m=4 and t = 6 years?
a ₱48,253.12 b. ₱48,405.07 c. ₱47,606.23 d. ₱48,030.97
_____17. What is the total number of conversion periods when an amount is borrowed at 9% compounded monthly for 6 years?
a. 12 b. 24 c. 72 d. 6
_____18. Find the periodic rate of the given problem in item number 17.
a. 0.09 b. 0.045 c. 0.0225 d. 0.0075
_____19. Find the periodic rate if ₱35,00.00 was invested at 5% compounded semi-annually for 5 years and 6 months?
a. 0.05 b. 0.025 c. 0.004 d. 0.0125
_____20. Which of the following is the formula to be used if we are asked to find the present value of a compound interest problem?
𝐹
𝑛 𝐹 log
a. F = P(1 + i)n b. P = F(1 + i)−n c. r = m ( √𝑃 − 1) d. t = 𝑃
𝑚 log(1+𝑖)
IV, Word problem. Solve the following problems by showing your solutions using the available space below. (5 points each)
21-25.) How much must be invested in a savings account to have 26-30.) Imaw borrowed ₱200,000.00 at 6% compounded monthly.
₱100,000.00 in 8 years if money earns 9% compounded quarterly? He paid an amount of ₱240,000.00 at the end of the period. For
𝑟 𝐹
Hint: Use P = F(1 + i)−n where: 𝑖 = and 𝑛 = 𝑡𝑚 log 𝑃
𝑚 how long was the money borrowed? Use t =
𝑚 log(1+𝑖)