Introduction
Have you ever borrowed money ? or the one who gives money to the borrower?
Have you ever heard the word "Interest"?
Have your ever promised a date on payment of borrowed money?
If your answer is YES , this webquest will help you to know the computation on Simple Interest
Definition of terms:
Lender or creditor- a person who invests money or makes finances available for investment.
Borrower or debtor- a person who owes money to a lender or receives funds from one.
Origin or loan date- the date on which the borrower receives the funds.
Repayment date or maturity date- when the money borrowed or loan is due to be paid back.
Time or term (t)- the length of time in years that money is borrowed or invested; the time between the date of origin and the date of maturity.
Principal (P)- on the origin date, the amount borrowed or invested.
Rate (r)- the lender's annual rate, commonly expressed in percent, or the investment's rate increase.
Interest (I)- amount paid or earned for the use of money.
Simple Interest- interest is calculated on the principal and added to it.
Compound Interest - interest that is computed on the principal and also on the accumulated past interests
Maturity value or Future value (F)- amount that the lender receives from the borrower on maturity data after years.
Task
At the end of the lesson, the learner is able
- to define the key concepts of simple and compound interest
- to compute interest, maturity value and present value in simple interest environment, and solve problems involving simple interest
- to value of simple and compound interest in real-world situation specially investment
Process
Annual Simple Interest
I = Prt
where : I = simple interest
P = principal or amount invested or borrowed
r = simple interest rate
t = terms or time in years
Example 1: A bank offers 0.25% annual simple interest rate for a particular deposit. How much interest will be earn if one million pesos is deposited in this savings account for 1 year?
Given : P = ₱ 1,000,000.00 r = 0.25% = 0.0025 t = 1
Find : Interest
Solution : I = Prt
I = (₱ 1,000,000.00) (0.0025) (1)
I = (₱ 1,000,000.00) (0.0025)
I = ₱ 2,500.00
Answer : The interest earned is ₱ 2,500.00
Example 2: How much interest is charged when ₱ 50,000.00 is borrowed for 9 months at an annual rate of 10%?
Given : P = ₱ 50,000.00 r = 10% = 0.10 t = 9/12 = 0.75 Note: when the terms is expressed in months (M),
Find : Interest it should be converted in years by t = M/12
Solution : I = Prt
I = (₱ 50,000.00) (0.10) (0.75)
I = (₱ 5, 000.00) (0.75)
I = ₱ 3,750.00
Answer : The simple interest charged is ₱ 3,750.00
Example 3 : Complete the table by finding the unknown.
|
Principal (P) |
Rate (r) |
Time (t) |
Interest (I) |
| (a) | 2.5% | 4 | ₱ 1,500.00 |
| ₱ 36,000.00 | (b) | 1.5 | ₱ 4,860.00 |
| ₱ 250,000.00 | 0.5% | (c) | ₱ 275.00 |
| ₱ 500,000.00 | 12.5% | 10 | (d) |
Solution:
(a) The unknown principal can be obtained by :
Given : r = 2.5% = 0.025 t = 4 I = ₱ 1,500.00
Find: Principal
Solution : P = I/rt
P = ₱1,500.00/ (0.025) (4)
P = ₱1,500.00/ 0.1
P = ₱ 15,000.00
Answer : The principal is ₱15,000.00
(b) The unknown rate can be obtain by :
Given : P = ₱ 36,000.00 t = 1.5 I = ₱ 4,860.00
Find : rate
Solution : r = [I/Pt] x 100%
r = [₱ 4,860.00/ (₱ 36,000.00) (1.5)] x 100%
r = [₱ 4,860.00/ ₱54,000.00] x 100%
r = 0.09 x 100%
r = 9%
Answer : The rate is 9%
(c) The unknown time can be obtain by :
Given : P = ₱ 250,000.00 r = 0.5% = 0.005 I = ₱ 275.00
Find : time
Solution : t = I/Pr
t = ₱ 275.00/ (₱ 250,000.00) (0.005)
t = ₱ 275.00/ ₱ 1,250
t = 0.22 years
Answer : The time is 0.22 years
(d) The unknown interest can be obtain by:
Given : P = ₱ 500,000.00 r = 12.5% = 0.125 t = 10
Find: Interest
Solution : I = Prt
I = ( ₱ 500,000.00) (0.125) (10)
I = ( ₱ 500,000.00) (1.25)
I = ₱ 625,000.00
Answer : The interest is ₱ 625,000.00
For clarification discussion please watch the video
Evaluation
A. Find the unknown principal (P) , rate (r), time (t) and interest (I) by completing the table. Show your complete solution and send it on my messenger
| Principal (P) | Rate (r) | Time (t) | Interest (I) |
| ₱ 2,000.00 | 5% | 3 | (1) |
| (2) | 12% | 5 | ₱ 20,000.00 |
| ₱ 88,000.00 | (3) | 4 | ₱ 8,000.00 |
| ₱ 500,000.00 | 9.5% | (4) | ₱ 285,000.00 |
| ₱ 1,000,000.00 | 0.5% | 12 | (5) |
B. Solve the following problems. Show your complete solution and send it on my messenger
6. Find the simple interest on a loan of ₱ 65,000.00 if the loan is given at a rate of 20% and is due in 3 years.
7. Jake invested a certain amount at 10% simple interest per year. After 2 years, the interest she received amounted to ₱ 3,000.00. How much did she invest?
8. Miko borrowed ₱ 25,000.00 at 10% annual simple interest rate. How much should he pay after 3 years and 6 months?
9. How long will an amount of ₱ 50,00.00 gain a simple interest of ₱ 10,000.00 at 4% per annum?
10. At what simple interest rate per annum will ₱ 20,000.00 accumulate to ₱ 25,000.00 in 3 years?
Credits
Reference: General Mathematics Learners Material by Department of Education Republic of the Philippines
Teacher Page
Im Sir Jake Magboo 