“SIMPLE INTEREST”
JENELYN A. PITOGO
Prepared by
RODEL C. RESTAURO
SIMPLE INTEREST FORMULA
I = Prt
WHERE:
I = The interest money created in dollars or pesos.
P = the “Principal” starting amount of money.
r = the interest Rate per year ( in decimal form).
t = the time the money is invested or borrowed in years.
INTEREST
In its simplest description,
is a fraction or percentage
being imputed to a sum of
money.
PRINCIPAL AMOUNT
The most commonly used to
refers to the original sum of
money borrowed in a loan
or put into an investment.
INTEREST RATE
The proportion of a loan that
is charged as interest to the
borrower, typically
expressed as an annual
percentage of the loan
outstanding.
TIME OR LOAN PERIOD
Is the agreed date or
time when the loan will
be paid in full.
SIMPLE INTEREST FORMULA
I
P = rt
I
r r= I
P t
Pt
I
I = Prt t = Pr
Solve the problems involving simple interest:
1. Mr. Baba deposits P85, 000.00
for 5% interest rate. If she
withdraws it after 7 years, how
much simple interest will he get?
Solution:
1. Mr. Baba deposits P85, 000.00 for 5% interest rate. If she
withdraws it after 7 years, how much simple interest will he get?
Solution:
Given: I = Prt
r = 5% = 0.05
P = 85,000.00 = (85,000.00)(0.05)(7)
I=? I = 29,750.00
t=7
The simple interest he will get is P29,750.00.
Solve the problems involving simple interest:
2. Sibel borrows P75,
000.00 from Jane which
charges her 8.5% simple
interest for 95 days. Find
the exact simple interest.
Solution:
2. Sibel borrows P75, 000.00 from Jane which charges her
8.5% simple interest for 95 days. Find the exact simple interest.
Given: Solution: I = Prt
I =? = (75,000.00)(0.085)(0.26)
P = 75,000.00
I = 1,657.5
r = 8.5%= 0.085
t = 95/365 = 0.26 The exact simple interest is P1,657.5.
Solve the problems involving simple interest:
3. Thomas took loan from a bank
at the rate of 12% simple interest.
After 3 years he had to pay P5,
400.00 interest only for the period.
How much was the principal
amount borrowed?
Solution:
3. Thomas took loan from a bank at the rate of 12% simple interest.
After 3 years he had to pay P5,400.00 interest only for the period.
How much was the principal amount borrowed?
Given: Solution: �
t=3 � =
��
I = 5,400.00 =
5,400.00
P=? (0.12)(3)
5,400.00
r = 12% = 0.12 =
0.36
� = ��, ���. �� The principal amount he
borrowed is P15,000.00.
Solve the problems involving simple interest:
4. After 2 months, Mr. Cruz paid
P750.00 interest for the sum of
the money he borrowed at P90,
780.00 to buy seeds for his farm.
Find the interest rate.
Solution:
4. After 2 months, Mr. Cruz paid P750.00 interest for the sum of
the money he borrowed at P90,780.00 to buy seeds for his farm.
Find the interest rate.
�
Solution: � =
Given: ��
750.00
P = 90,780.00 =
I = 750.00 (90,780.00)(0.17) � = �. ��(���%)
r=? = �%
750.00
t = 2/12 = 0.17 = = 0.048 The interest is 5%.
15,432.6
� = �. �� �� �%
Solve the problems involving simple interest:
5. Money is invested at 6%
simple interest. In how many
months will it take P13, 000.00 to
earn P340.00?
Solution:
5. Money is invested at 6% simple interest. In how many months
will it take P13,000.00 to earn P340.00?
�
Solution: � =
��
Given: 340.00
P = 13,000.00 =
(13,000.00)(0.06)
I = 340.00
340.00 � = �. �(��������)
r = 6% = 0.06 = = 0.43 = �. � ≈ � ������
t=? 780
The 5 months will it take
� = �. � P13,000.00 to earn P340.00.
Solve the problems involving simple interest:
6. Gemma borrowed P35, 000.00
on February 14 at 15% simple
interest. How much interest she pay
on October 30 of the same year?
Solution:
6. Gemma borrowed P35,000.00 on February 14 at 15% simple
interest. How much interest she pay on October 30 of the same
year?
Solution:
Given: I = Prt
r = 15% = 0.15 = (35,000)(0.15)(0.70)
P = 35,000
I=?
I = 5,250.7
t = 257 days (Feb. 14 to Oct. 30) The interest she pay on October
30 of the same year is P5,250.7.
t = 257/365 = 0.70
�
+ � �� � � �!
