2. › In the previous illustrations of simple and
compound interest, we learned that simple
interest is an interest that is computed on
principal and then added to it.
› Compound interest the interest is computed
on the principal and also on the accumulated
past interests.
3. Remember
Simple interest: I=Prt
Maturity Value: A = P+I; A = P + Prt; A=P(1+rt)
Compound interest: 𝐼𝐶 = 𝐴 − 𝑃
Maturity Value: A=P+Pr = P(1+r) *at the end of the year
A=𝑃 1 + 𝑟 𝑡
*compounded annually for
n years
A=P 1 +
𝑟
𝑘
𝑘𝑡
*if compounded k times
per year
5. Illustrative examples
How much interest would Maria pay to her loan amounting to
Php20,000 for 3 years at 6% per year at simple interest?
Given: P= r= t=
Solution: I=Prt
6. Illustrative examples
Find the Future value and the amount of interest if Php20,000
was loaned for a period of 3 years with interest of 6%
compounded annually?
Given: A=? I=? P= r= t=
Solution: A=P 1 + 𝑟 𝑡
7. Determine whether each problem involve simple interest or
compound interest
Simple Interest Compound Interest
1. Mr. Edo invested
Php 30,000 to an
account that pays 4%
annually. How much is
the amount of interest
at the end of the year?
2. What is the interest
rate is being charged
if Mario applies a loan
amounting to
Php60,000 and pays
interest of Php 9,000
in 3 years
8. Determine whether each problem involve simple interest or
compound interest
Simple Interest Compound Interest
3. What is the
interest of
Php38,000 if
invested at 4%
compounded
annually in 2
years?
4. What is the
future value of Php
18,000 at 6% in 2
years compounded
semi annually?
9. Determine whether each problem involve simple interest or
compound interest
Simple Interest Compound Interest
5. What are the
rate of interest
and maturity
value of Php
28,000 if it earns
Php 2,240 in a
year?
10. From the given problems in activity 1, find what is asked.
