GENERAL MATHEMATICS

WEEK 1 and WEEK 2

Simple and Compound Interest
Name: __________________________________ Score:_________________
Grade & Section:__________________________ Date:__________________

Learning Outcome(s): At the end of the lessons, the learner is able to: a) illustrate simple and compound
interests; b) distinguish between simple and compound interests; c) compute interest, maturity value, future
value, and present value in simple interest and compound interest environment; and d) solve problems involving
simple and compound interests.
Exercises 1.1 Warm Up [10 points]
Suppose your grandparents have given you 15,000 pesos and you plan to invest it for 3 years. Metrobank offers
2% simple interest rate per year while BDO offers 2% compounded annually. Illustrate simple and compound
interest in the table below for you to be able to choose which bank has a better offer.
Table 1. Simple Interest
Time Principal Interest rate (r) Simple Interest (Is) Maturity Value (F)
(t) (P) Solution Answer (Amount after t years)

1 2% (2)
2 (1) 2% (3)
3 2% (4)
Table 2. Compound Interest
Time Amount at the Interest rate (r) Compound Interest (Ic) Maturity Value (F)
(t) start Solution Answer (Amount after t years)
of the year t

1 (5) 2% (6)
2 2% (7) (8)
3 2% (9) (10)

Exercises 1.2 Independent Practice [10 points]

A. Distinguish whether the given statements below illustrate simple or compound
interest. Write your answers on the space provided before each number.
__________ 1. Computed on the principal and then added to it.
__________ 2. Computed on the principal and on the accumulated past interests.
__________ 3. It is computed with this formula I = Prt.
__________ 4. It is computed with this formula I = [P(1+r)t]−P or F – P.
__________ 5. It has bigger maturity value among the two types of interest.
B. Fill in the table with the missing values. Table 1. Simple Interest
TIME ANNUAL RATE MATURITY VALUE
PRINCIPAL (P)
(t) (r) (F)
P20, 000 4 19% (1)
(2) 6 11% P145, 000
Table 2. Compound Interest
TIME ANNUAL RATE MATURITY VALUE
PRINCIPAL (P) PERIOD (m)
(t) (r) (F)
P135, 000 10 18% Annually (3)

(4) 8 20% Quarterly P950, 250

P44, 500 5 10% Monthly (5)

1
Assessment 1.1 [11 points]
Choose the letter of the correct answer and write it on the space provided.
____ 1. It is the amount paid or earned for the use of money.
A. Principal B. Present Value C. Interest D. Future Value
____ 2. What is the equivalent interest period of compounding quarterly?
A. 1 month B. 3 months C. 4 months D. 6 months
____ 3. How many periods of conversion does compounding semi-annually will have in 3 years?
A. 2 B. 4 C. 6 D. 8
For 4 -7. Georgina wanted to borrow P125, 000. If the bank offers her 6.5% annual simple interest rate and give
her 3 years to repay the amount.
____ 4. What do you call with P125, 000?
A. Payment B. Principal C. Future Value D. Interest
____ 5. How much interest will she pay?
A. 2,708.33 B. 14,625.00 C. 24,375.00 D. 27,083.33 ____ 6. How much will she pay after 3 years?
A. 152, 083.33 B. 149,375.00 C. 139,625.00 D. 127,708.33
____ 7. If Georgina wanted to repay her debt for only 1 year, how much must she repay then?
A. 8,125.00 B. 16,250.00 C. 133,125.00 D. 141,125.00
____ 8. Liza borrowed an amount of 150,000 which she paid with an interest of 6,500 at the end of 3 years
compounded quarterly, what nominal rate was used in her money?
A. 1.42% B. 5.05% C. 2.53% D. 15.15%
For 9-11. How long will a principal of 25,000 of Mark will earn an amount of 3000 when invested at 3%
compounded monthly?
____ 9. What is the rate of interest for each conversion period (j)?
A. 0.0025 B. 0.0075 C. 0.015 D. 0.03
____ 10. How many conversion periods will cover the investment (n)?
A. 22.38 B. 32.23 C. 45.39 D. 54.21
____ 11. How long will he wait to achieve the amount he wanted (t)?
A. 3 yrs 9 mos. B. 3 yrs 10 mos C. 9 yrs 3 mos D. 9 yrs 10 mos

Assessment 1.2 [4 points]

Create a simple word problem that involves simple and compound interest. Involve family members in this
activity (e.g. ask them how much interest do banks pay).

Closure [5 points]
3-2-1 Exit Card
List 3 things you learned today.

List 2 things you’d like to learn more about.

List 1 question you have.

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