Lord, thank you for the
unique gifts You have given
us. Fill us with fresh
enthusiasm and a heart
that is excited to learn and
grow. Cover us with Your
enduring love, give us
confidence and grace, and
equip us with the ability to
persevere through trials.
CHECKING OF
ASSIGNMENT
ACTIVITY 1.1
A B
privilege of borrowing money. e
1. It is the amount that is charged for the a.
𝑰 𝒔 = 𝑷𝒓𝒕
2. It refers to a person or institution who b. Principal
f
owes money.
3. It is the amount of money originally
invested or borrowed. b c.
𝑭 =𝑷 (𝟏+𝒓 )
𝒕
4. It is the formula for computing simple
interest. a d. Lender/Creditor
5. It refers to the person/institution who e. Interest
d
made the funds available.
f. Borrower / Debtor
Complete the table below
by finding the
unknown.
Principal Rate Time Interest Future
Value
15,00
(a) 2.5% 4 1,500 (e)16,500
0
36,000 (b)
9% 1.5 4,860 40,860
250,000 0.5% (c) 0.22 275 250,275
500,000 12.5% 10 (d)625,00 1,125,000
0
Objective
define s:
compound interest;
Compute compound interest,
maturity value and present
value; and
Solve problems involving
compound interest.
1 2 3
4 5
amount after t years that the
lender receives from the
borrower on the maturity
date
MATURITY VALUE OR
FUTURE VALUE
𝑰 𝒄=𝑭 − 𝑷
Compound Interest
It is the amount paid or
earned for the use of
money.
Interest
𝐼 𝑆 = 𝑃𝑟𝑡
Simple Interest
date on which money
is received by the
borrower.
Origin or Loan Date
COMPOUND
INTEREST
Compound Interest (
is the interest
computed on the
principal and also on
the accumulated past
interest.
COMPOUND
INTEREST
FORMULA
COMPOUND INTEREST FORMULA
𝑰 𝒄 =𝑭 − 𝑷
Where:
𝐼 𝐶 =𝐶𝑜𝑚𝑝𝑜𝑢𝑛𝑑𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡
P = Principal or amount
F = Future Value
invested
FUTURE VALUE FORMULA
𝒕
𝑭 = 𝑷 ( 1+𝒓 )
WHERE:
F = Future value
P = Principal Amount
r = compound interest rate
t = time or time in years
Formula for Present
Value
𝑭
𝑷= 𝒕
( 𝟏+𝒓 )
WHERE:
F = Future value
P = Principal Amount
r = compound interest rate
t = time or time in years
Steps to find
the simple
interest
Step 1: Identify the given and
the unknown
Step 2: Substitute the given to
the formula, then solve
Example:
If ₱ 20,000 is deposited in a
savings account at an annual
rate of 5%, what will be the
amount in the account at the
end of 3 years if the interest
is compounded annually?
Step 1: Identify the given and the Example:
unknown
Given: If ₱ 20,000 is
P = 20,000
r = 5% = 0.05 𝑭 =? deposited in a
savings account
t = 3 year at an annual
Step 2: Substitute the given to rate of 5%, what
the formula, then solve will be the
𝑭 = 𝑷 (𝟏+𝒓 )
𝒕 amount in the
3 account at the
𝐹 =20,000 (1 +0.05 ) end of 3 years if
the interest is
compounded
annually?
Example:
What amount must be deposited
by a student in the bank that pays
2% compounded annually so that
after 12 years have ₱ 100, 000?
Step 1: Identify the given and the Example:
unknown
Given: What amount
F = 100,000
r = 2% = 0.02
𝑷 =? must be
deposited by a
t = 12 student in the
bank that pays
Step 2: Substitute the given to 2% compounded
the formula, then solve 𝑭 annually so that
𝑷 = 𝒕 after 12 years
( 𝟏+𝒓 ) have ₱ 100,
𝟏𝟎𝟎 , 𝟎𝟎𝟎 000?
𝑷=
( 𝟏 +𝟎 . 𝟎𝟐 ) 𝟏𝟐
𝟏𝟎𝟎 , 𝟎𝟎𝟎
𝑷=
𝟏 . 𝟐𝟔𝟖𝟐
𝑷 =𝟕𝟖 , 𝟖𝟓𝟏 . 𝟗𝟐
Students edition
Direction:
Each group will be given exact 1 min. to
answer the question and every right answer is
equivalent to 5 points and given with 2
lifeline once distinctively:
Brain storming
You can talk with Pass
the whole member You can pass the
of the group to question to the
answer. (30 sec.) other group
member.
1st Question:
Which is the compound interest if you
invest 1000 pesos for 3 years and get 10%
interest compounded at the end of each
year?
A. 249 B. 349
C. 449 D. 559
1st Question:
Which is the compound interest if you
invest 1000 pesos for 3 years and get
10% interest compounded at the end
of each year?
A. 249 B. 349
C. 449 D. 559
2nd Question:
Which of the following functions is used
to solve for the maturity value under
compound interest?
A. B.
C. D.
2nd Question:
Which of the following functions is used
to solve for the maturity value under
compound interest?
A. B.
C. D.
3rd Question:
What is being asked in the following
problem? In order to have ₱130,000 in 2
years, how much should you invest if the
annual compound interest is 4.5%?
A. Principal B. Maturity value
C. Interest D. Interest
rate
3rd Question:
What is being asked in the following
problem? In order to have ₱130,000 in 2
years, how much should you invest if the
annual compound interest is 4.5%?
A. Principal B. Maturity value
C. Interest D. Interest
rate
4th Question:
Anthony borrowed 150,000 pesos from a
lending company where he needs to pay an
interest rate of 3% compounded annually in 3
years. Find the maturity value of the loan.
A. ₱159, 900 B. ₱179, 900
C. ₱199, 000 D. ₱163, 909
4th Question:
Anthony borrowed 150,000 pesos from a
lending company where he needs to pay an
interest rate of 3% compounded annually in 3
years. Find the maturity value of the loan.
A. 159, 990 B. 179,900
C. 199,000 D. ₱163, 909
Activity
Time!
ACTIVITY
Your father asked you about
investment and wanted to
know the interest that will be
earned if he will invest ₱500, 000
in a certain bank that offers an annual
compounding interest of 8% for 5 years.
Complete the table below
to help your father.
Time (t) Amount at the Interest Compound Maturity
start of year t rate (r) Interest Value
1 500,000 8%
2 540,000 8% 43,200
3 8% 629,856
4 8% 50,388.48 680,244.48
5 680,244.48 8% 54,419.56
Complete the table below
to help your father.
Time (t) Amount at the Interest Compound Maturity
start of year t rate (r) Interest Value
1 500,000 8% 40,000 540,000
2 540,000 8% 43,200 583,200
3 583,200 8% 46,656 629,856
4 629,856 8% 50,388.48 680,244.48
5 680,244.48 8% 54,419.56 734,664.0
4
