This document explains simple interest calculations. Simple interest is the amount paid on a loan in addition to the principal. It is calculated using the formula: Interest = Principal x Rate x Time. The document provides examples of calculating simple interest for loans over different periods of time. It also demonstrates calculating the total repayment amount and monthly payments over the loan period.

1. Simple Interest

2. Simple Interest or flat rate
- refer to the amount to be paid on
top of the amount borrowed or lent.
- it may also be the amount earned
by a certain amount of money
deposited in a bank.

3. I – Interest or the amount of interest paid
P – Principal or the amount lent or borrowed
R – Rate or the percentage of the principal
T – Time (in years) of the loan
I = P × R × T

4. Carlo purchased a computer by obtaining a
simple interest loan. The computer costs ₱48,000
and the interest rate on the loan is 12%. If the loan
is to be paid back in monthly installments for 2
years, what is the amount of interest to be in 2
years? What is the total amount to be paid back?
How much will he pay monthly?

5. Given facts:
1. If the loan is to be paid back in monthly
installments for 2 years, what is the
amount of interest to be in 2 years?
I = ₱48,000 × 0.12 × 2
= ₱ 11,520.00
• Principal: P = ₱48,000
• Interest Rate: R = 12% or 0.12
• Payment Time: T = 2 years
I = P × R × T
Carlo needs to pay
₱11,520.00 for the
interest.

6. 2. What is the total amount to be paid back?
= ₱48,000 + ₱11,520
= ₱59,520
3. How much will he pay monthly?
=
₱59,520
24 months
= ₱ 2,480.00
Total amount to be paid = Principal + Interest
Carlo will pay
₱59,520 in all.
Monthly payment =
total amount to be paid
24 months
Carlo has to pay ₱ 2,480.00
every month for two years.

7. A total of ₱ 1,200 is invested at a simple
interest rate of 6% for 4 months. How much
interest is earned on this investment?
Given facts:
= ₱ 1,200 × 0.06 × 0.33
= ₱ 23.76 or ₱ 24.00
• Principal: P = ₱1,200
• Interest Rate: R = 6% or 0.06
• Payment Time: T = 4 mos. or 0.33
Before we can apply the formula, we will need to write the time of 4 months in
terms of years. Since there are 12 months in a year: 4 ÷ 12 = 0.33
I = P × R × T
The interest earned is
₱24.00

8. Practice:
To buy a computer, Raquel borrowed
₱3,000 at 9% interest for 4 years. How much
money did she have to pay back?
Given facts:
= ₱ 3,000 × 0.09 × 4
= ₱ 1,080
• Principal: P = ₱3,000
• Interest Rate: R = 9% or 0.09
• Payment Time: T = 4 years
I = P × R × T
Raquel had to pay back ₱3,000
in principal plus ₱1,080 in
interest for a total of ₱
4,080.00.