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Problem Solving in Simple Interest

The document provides examples and problems related to simple interest calculations, including scenarios with different interest rates and time periods. It includes solutions for calculating interest earned, original investments, and interest rates based on given data. Additionally, it presents seatwork problems for practice in applying simple interest formulas.

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m41016244
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4 views9 pages

Problem Solving in Simple Interest

The document provides examples and problems related to simple interest calculations, including scenarios with different interest rates and time periods. It includes solutions for calculating interest earned, original investments, and interest rates based on given data. Additionally, it presents seatwork problems for practice in applying simple interest formulas.

Uploaded by

m41016244
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

PROBLEM SOLVING

IN SIMPLE INTEREST
Examples:
1. A bank offers 1.5% annual simple interest rate for a particular
deposit. How much interest will be earned if 1 million pesos is
deposited in this savings account for 1 year?
Solution:
Given: r = 1.5% or 0.015; P = ₱1,000,000.00; t = 1 year

Therefore, an interest amounting to ₱15,000.00 will be earned if 1


million pesos is deposited in a savings account for 1 year with 1.5%
annual simple interest rate.
2. When invested at an annual interest rate of 8%, the amount earned
₱11,200.00 of simple interest in 2.5 years. How much money was originally
invested?
3. Austin has been working at the department store, he has had his eye on
a new bike. He has saved ₱1,000.00, but the bike is being sold for ₱5,000.00.
Austin would not mind waiting except for the fact that several of his friends
are going to go on a big bike ride on the weekend and he wants to go
with them. He has decided to ask his brother if he can borrow the money.
The one catch is that he wants to charge his interest. His brother will loan
him the ₱5,000.00, but he wants to charge him 15% interest per month. “I
don’t think that is very fair,” Austin tells him when he presents the deal. “It
isn’t that much more that you have to pay back.” Austin disagrees. How
much is 15% interest on ₱5,000.00?
◦ Solution:
𝐼𝑠 = Prt
= ₱5,000(0.15) (1)
𝑰𝒔 = ₱750.00
◦ Therefore, ₱750.00 is the 15% of ₱5,000.00. that Austin gives to his
brother.
4. Ricky borrowed ₱25,000.00 and paid ₱1,250.00
interest for 6 months. What was the rate of
interest?
5. Nisi left her $4000 prize money in the bank for two years at 4%
interest. She needs to figure out how much money she now has.

First, using the formula for simple interest, fill in all of the numbers
you know.
Seatwork: 1 whole
Solve the following word problems. Show your complete solutions.
1. When invested at an annual interest rate of 7%, the amount earned P 11,200 of simple
interest in two years. How much money was originally invested?
2. Find the simple interest on a loan of ₱65,000.00 if the loan is given at a rate of 2% and
is due in 5 years?
3. How much money will you have after 4 years if you deposited ₱10,000.00 in a bank
that pays 6% simple interest?
4. If an entrepreneur applies for a loan amounting to ₱500,000.00 in a bank, the simple
interest of which is ₱ 157,500 for 3 years, what interest rate is being charged?

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