Scribd
Upload
11 views

Simple Interest

Uploaded by

gwaii
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
11 views

Simple Interest

Uploaded by

gwaii
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 20

Simple Interest

Problem of the Day


Lesson Presentation
Lesson Quizzes
Simple Interest

Learn to compute simple interest.


Simple Interest

What is interest and why does it


exist?
Simple Interest

When you deposit money into a savings


account, the bank invests your money and pays
you interest based on an interest rate

When you take out a loan, you will have


to pay interest on the money you borrow
Simple Interest

Simple Interest:
➢When interest is earned or paid only on the
principal.

Compound Interest:
➢When interest is earned or paid on both the
principal and any interest that has been earned
or accrued previously.
Simple Interest

Interest is the amount of money charged for


borrowing or using money. When you deposit
money into a savings account, you are paid
interest. Simple interest is one type of fee paid
for the use of money.
Simple interest Rate of interest is the
is money paid percent charged or
only on the earned.
principal.
Is = P  r  t
Time in years that
Principal is the amount of the money is
money borrowed or invested. borrowed or invested
Simple Interest
Example: Finding Interest and Total Payment on a
Loan
To buy a car, Jessica borrowed P15,000 for 3
years at an annual simple interest rate of 9%.
How much interest will she pay if she pays the
entire loan off at the end of the third year?
What is the total amount that she will repay?

Is = P  r  t Use the formula.


Simple Interest
Example 2
To buy a laptop computer, Elaine borrowed
P2,000 for 3 years at an annual simple
interest rate of 5%. How much interest will
she pay if she pays the entire loan off at the
end of the third year? What is the total
amount that she will repay?

Is = P  r  t Use the formula.


Simple Interest
Additional Example: Determining the Amount of
Investment Time

Nancy invested P6000 in a bond at a yearly


rate of 3%. She earned P450 in interest. How
long was the money invested?

Is = P  r  t Use the formula.


Simple Interest
Example

TJ invested P4000 in a bond at a yearly rate of


3%. He earned P200 in interest. How long was
the money invested?

Is = P  r  t Use the formula.


Simple Interest
Example: Computing Total Savings
John’s parents deposited P1000 into a savings
account as a college fund when he was born.
How much will John have in this account after
18 years at a yearly simple interest rate of
3.25%?

Is = P  r  t Use the formula.


Simple Interest
Example
Bertha deposited P1000 into a retirement
account when she was 18. How much will
Bertha have in this account after 50 years at a
yearly simple interest rate of 7.5%?

Is = P  r  t Use the formula.


Simple Interest
Example
If an entrepreneur applies for a loan
amounting P500,000 in a bank, interest
of which is P157,500 for 3 years, what
interest rate is being charged?

Is = P  r  t Use the formula.


Simple Interest
Example
When invested at an annual interest
rate of 7%, an amount earned P11,200
of simple interest in 2 years. How much
money was originally invested?

Is = P  r  t Use the formula.


Simple Interest
Lesson Quiz: Part I

1. A bank is offering 2.5% simple interest on a savings


account. If you deposit P5000, how much interest
will you earn in one year? P125

2. Joshua borrowed P1000 from his friend and paid


him back P1050 in six months. What simple annual
interest did Joshua pay his friend? 10%
Simple Interest
Lesson Quiz: Part II

3. The Hemmings borrowed P3000 for home


improvements. They repaid the loan and $600 in
simple interest four years later. What simple annual
interest rate did they pay? 5%

4. Mr. Berry had P120,000 in a retirement account.


The account paid 4.25% simple interest. How much
money was in the account at the end of 10 years?
P171,000
Simple Interest
Lesson Quiz for Student Response Systems

1. To buy a house, Tom borrowed $50,000 for 5


years at an annual simple interest rate of 8%. How
much interest will he pay if he pays off the entire
loan at the end of the fifth year?

A. $4000

B. $8000

C. $20,000

D. $25,000
Simple Interest
Lesson Quiz for Student Response Systems

2. Rob borrowed $2,500 for 18 months and repaid


$2,950. What simple annual interest did he pay?

A. 12%

B. 18%

C. 24%

D. 30%
Simple Interest
Lesson Quiz for Student Response Systems

3. Mary invested $750 in a savings account for 2


years. The total interest earned on the investment
was $105. What was the interest rate on the
account?

A. 7%

B. 14%

C. 28%

D. 140%
Simple Interest
Lesson Quiz for Student Response Systems

4. Rose invested $8,000 in a mutual fund at a


yearly rate of 9%. How much would she have in
the account after 5 years?

A. $8,300

B. $8,720

C. $11,600

D. $15,200

You might also like