- Students are instructed to thoroughly review slides before attempting 3 worksheets to submit to their math teacher - The document covers simple and compound interest, including definitions and formulas - Examples are provided to demonstrate calculating simple interest based on principal, rate, and time, and compound interest calculated annually over multiple time periods

1. Instruction to students:
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• Please go through the slides thoroughly,
2
before attempting the worksheets attached.
1
4
• Please print out the worksheets and submit
to your math teacher.
• You need to submit 3 worksheets in total.

2. 1
2
Chapter 6
4
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Mathematics in Practical Situation

3. SIMPLE INTEREST
Simple interest is the
2
interest paid on the
principal only for
1
4
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each time period.

4. FORMULA
2
PRT
I= 1
4
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100

5. SIMPLE INTEREST
• Interest (I): Interest
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2
• PRINCIPAL(P): the amount of
money invested or borrowed
1
• RATE (R): rate in % per annum
• TIME: in years 4

6. A sum of $5000 is borrowed for 4 years
Example 1: at 2% per annum. Find the simple interest
and the amount to be paid back.
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Solution:
PRT
2
Interest, I =
100
1
4
5000 × 2 × 4
=
100
= $400
Amount to be paid back = 5000 + 400 = $5400

7. Example 2: If the simple interest on $500
at 2%p.a. is $40, find the
0011 0010 1010 1101 0001 0100 1011 the loan.
Solution:
period of
PRT
2
Interest, I =
100
1
4
500 × 2 × T
40 =
100
40 = 10T
T = 4 years

8. Compound Interest
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• Interest earned after one period is added to
2
the principal to earn more interest for the
next period
1
4

9. Example 3: Find the compound interest on $5000 for
2 years at 4% per annum compounded
Solution:
annually.
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Interest in the first year = 5000 × 4 × 1
100 Method 1
2
= $200
Principal for second year = 5000 + 200 = $5200
1
4
5200 × 4 × 1
Interest in the second year =
100
= $208
Compound Interest = 5200 + 208 = $5408

10. Formula for calculate Compound
Interest
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n
 i 
2
Amount = P1 + 
 100 
1
4
P = Principal amount
I = interest rate per annum, expressed as
percentage
N = number of years compounded

11. Example 3: Find the compound interest on $5000 for
2 years at 4% per annum compounded
Solution:
annually.
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n
 i 
Interest in the second year = P 1 +  Method 2
2
 100 
1
2
 4 
4
= 50001 + 
 100 
= 5408
Compound Interest = $5408

12. 1
2
Please proceed to worksheet 1
4
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