COT1 GM SI

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Multiple Choice

Date on which the money borrowed or loaned is to be completely repaid.

• Conversion Period

• Maturity Date

• Loan Date

• Original Date

Multiple Choice

This refers to the accumulated amount obtained by adding the principal and the Simple interest.

• Maturity Value

• Compound Interest

• Present Value

• Simple Interest

Multiple Choice

This refers to the interest rate per conversion period.

• Compound Interest

• Periodic Rate

• Rate of Interest

• Simple Interest

Multiple Choice

What is the formula in computing the simple interest on a given financial transaction?

• 𝑰=𝑷𝒓𝒕

• 𝑰=𝑷𝒓𝒕2

• 𝑰=𝑷𝒓2𝒕

• 𝑰=r𝑷𝒕

Multiple Choice

This refers to the amount paid or earned for the use of money

• Conversion Period

• Interest

• Principal

• Rate

Multiple Choice

30 months is equivalent to

• 2.5 years

• 2.75 years

• 3 years

• 3.25 years

Multiple Choice

Annual rate, usually in percent, charged by the lender, or rate of increase of the investment.

• Compound Interest

• Periodic rate

• Rate of Interest

• Simple Interest

Multiple Choice

Person (or institution) who owes the money or avails of the funds from the lender.

• Interest

• Term

• Creditor

• Debtor

Multiple Choice

Person (or institution) who invests the money or makes the funds available.

• Interest

• Term

• Creditor

• Debtor

Multiple Choice

How much was the interest if Sophia borrowed ₱45,000.00 and paid a total of ₱55,500.00 at the end of the term?

• ₱10,500.00

• ₱45,000

• ₱11,500.00

• ₱100,500.00

What do you see in the picture?

Unsa ang gina symbolize the liso?

What does this seed symbolize?

Objectives

​At the end of the lesson, the learners are expected to

a. Describe Simple Interest

b. Compute simple interest, maturity value and present value

c. Relate real-life problems involving simple interest 

Ideas that make the business grow

Open Ended

Can you give an example of business that involves interest. Mga negosyo o transaction na naay interest

Open Ended

How do you describe INTEREST? Unsa diay ng interest

Open Ended

How does Interest work? Sa unsang ppaagi maka kuha og interest?

Unlocking of terms

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.

•Repayment date or maturity date – date on which the money borrowed or loaned is to be completely repaid.

Unlocking of terms

Unlocking 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.  

•Principal or present value (P) – amount of money borrowed or invested on the origin date.

•Rate of interest or simply 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.

•Maturity Value or Future Value (F) – amount after t years that the lender receives from the borrower on the maturity date; equal to the sum of principal and the interest earned.

Formula for Simple Interest

I=Prt

The product of the principal, rate and time is equals to Interest.

Where I is the symbol used to denote the Simple Interest.

P is the symbol used to denote the principal

r - is the annual interest rate used in the transaction and is expressed in decimal form

t – is the time in years representing the period when the transaction is in effect.

EXAMPLE

1. Find the simple interest and the maturity value of a loan of P5000, for 9 months at 12%.

We are going to identify first the given:

P = 5000

r = 12% or 0.12 take note the rate should always be converted into decimal form

t = 9 months ( since 12 months is the equivalent for 1 year then we simply divide the 9 months to 12 to get the decimal form, 9/12 or 0.75.

Using the formula, we are going to substitute the numerical value to the formula.

I = Prt

I = 5000 x 0.12 x 9/12 or 0.75

I = 450

Poll

Did you follow or understand the solution of Example 1?

• YES

• NO

EXAMPLE (Maturity Value)

Then for us to get the maturity value, we simply add the principal amount to the interest.

S= P + I

S= 5000+450

S= 5450

Therefore the Interest is equals to 450 and the maturity value is equals to 5450.

Poll

Did you follow or understand the solution of Maturity Value?

• YES

• NO

EXAMPLE 2

P35,000 is invested in a financing institution for 18 months at 9%. Find the Interest.

EXAMPLE 2

Given:

P = 35000

r = 0.09

t = 18 months (or simply divide 18 by 12 months to get the exact time)

I = Prt

I = 35000 x 0.09 x 1.5

I = 4725

Poll

Did you follow or understand the solution of Example 2?

• YES

• NO

EXAMPLE 2 (continuation)

P35,000 is invested in a financing institution for 18 months at 9%. Find the Maturity Value.

EXAMPLE 2 (continuation)

Maturity value, simply add the principal amount to the interest.

S = P + I

S = 35000 + 4725

S = 39725

Poll

Did you follow or understand the solution of Example 2 maturity value?

• YES

• NO

EXAMPLE 3

What rate must P24,500 be invested for 112 years to earn P3,750.

Recall

Simple Interest formula: I=Prt

When we look for Principal , we use the formula P= I/rt

When we look for rate , we can use this formula   r=  I/Pt

When we look for time, we can use this formula   t=  I/Pr

EXAMPLE 3

Given:

P = 24,500

t = 1.5

I = 3750

Equation:

r= I/Pt

r= (3750/24500x1.5)

r = 3750/36750 =0.10204 or 10.20%

Poll

Did you follow or understand the solution of Example 3 ?

• YES

• NO

Group Activity (5 minutes)

GROUP 1:  Define Simple Interest and Give Examples

GROUP2: Relate real-life problems involving Simple Interest in different disciplines

GROUP3: Solve a given problem in Simple Interest (1)

GROUP 4: Solve a given problem in Simple Interest (2)

GROUP 5: Generalize the lesson on Simple Interest

Group Activity

Group 3.

Find the ordinary interest and amount.

Given: P = 25,000

t = 90 days

r = 8%

Group 4.

A loan for 23,200 was repaid with P 25,080 after 6 months, what rate was used?

​Ready for a short Quiz...

Multiple Choice

1. This refers to the accumulated amount obtained by adding the principal and the Simple interest.

• Maturity Value

• Compound Interest

• Present Value

• Simple Interest

Multiple Choice

2. Date on which the money borrowed or loaned is to be completely repaid.

• Conversion Period

• Maturity Date

• Loan Date

• Original Date

Multiple Choice

3. What is the formula in computing the simple interest on a given financial transaction?

• 𝑰=𝑷𝒓𝒕

• 𝑰=𝑷𝒓𝒕2

• 𝑰=𝑷𝒓2𝒕

• 𝑰=r𝑷𝒕

Multiple Choice

4. This refers to the interest rate per conversion period.

• Compound Interest

• Periodic Rate

• Rate of Interest

• Simple Interest

Multiple Choice

5. This refers to the amount paid or earned for the use of money

• Conversion Period

• Interest

• Principal

• Rate

Multiple Choice

6. 30 months is equivalent to

• 2.5 years

• 2.75 years

• 3 years

• 3.25 years

Multiple Choice

7. Annual rate, usually in percent, charged by the lender, or rate of increase of the investment.

• Compound Interest

• Periodic rate

• Rate of Interest

• Simple Interest

Multiple Choice

8. Person (or institution) who invests the money or makes the funds available.

• Interest

• Term

• Creditor

• Debtor

Multiple Choice

9. How much was the interest if Sophia borrowed ₱45,000.00 and paid a total of ₱55,500.00 at the end of the term?

• ₱10,500.00

• ₱45,000

• ₱11,500.00

• ₱100,500.00

Multiple Choice

10. How much is the simple interest on this financial transaction, P = ₱5,000.00, r = 6%, and t = 2 years?

• ₱120.00

• ₱600.00

• ₱1,200.00

• ₱6,000.00

Assignment ( 1 whole sheet)

Formulate own problem with complete solution that involve simple interest based on your real-life problem/application, your output will be graded using the performance rubric below.