Scribd
Upload
16 views14 pages

Simple Interest: Definitions and Examples

This document defines key terms related to simple interest calculations, including principal, interest rate, time period, and maturity value. It provides the simple interest formula and examples of calculating simple interest for various scenarios involving loans and investments over different time periods at given interest rates.

Uploaded by

Mam MJ Rosas
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
16 views14 pages

Simple Interest: Definitions and Examples

This document defines key terms related to simple interest calculations, including principal, interest rate, time period, and maturity value. It provides the simple interest formula and examples of calculating simple interest for various scenarios involving loans and investments over different time periods at given interest rates.

Uploaded by

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

Basic Business

Math: SIMPLE
INTEREST
Definition of Terms
• Lender or creditor - person (or
institution) who invests the money
or makes the funds available
• Borrower or debtor - person (or
institution) who owes the money or
avails of the funds from the
lender
• Origin or loan date - date on which
money is received by the borrower
Definition of Terms
• Time or term (t) - amount of time
in years the money is borrowed or
invested; length of time between
the origin and maturity dates.
• Repayment date or maturity date-
date on which the money borrowed
or loan is to be completely repaid
• Principal (P) - amount of money
borrowed or invested on the origin
date
Definition of Terms
• Rate (r) - annual rate, usually in
percent, charged by the lender, or
rate of increase of the investment
• Interest (I) - amount paid or earned
for the use of money
• Simple Interest (Is) - interest that
is computed on the principal and then
added to it
• Maturity value or future value (F) -
amount after t years; that the lender
receives from the borrower on the
maturity date
Simple interest
and Maturity
Value formula
Example:
1) How much interest
is charged when
P50,000 is
borrowed for 9
months at an annual
simple interest rate
of 10%?
2) When invested at
annual interest rate of
7% an amount earned
P11,200 of simple
interest in two years.
How much money was
originally invested?
3) If an entrepreneur
applies for a loan
amounting to P500,000 in
a bank, the simple
interest of which is
P157,500 for 3 years,
what interest rate is
being charged?
4. Find the maturity value if
1 million pesos is
deposited in a bank at
annual simple interest
rate of 0.25% after
a) 1 year?
b) 5 years?
1. A bank offers 0.25%
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?
2) How much interest
is charged when
P50,000 is
borrowed for 9
months at an annual
simple interest rate
of 10%?
3) When invested at an
annual interest rate of
7%, an amount earned
P11,200 of simple
interest in two years.
How much money was
originally invested?

You might also like