The Text Color of Your Answers Should Be In: What's New
The Text Color of Your Answers Should Be In: What's New
The Text Color of Your Answers Should Be In: What's New
Compound Interest
What’s New
1. It is all about both senior high school students, Janice and Jamaica, after
class the two had a conversation about how different they are using their
savings
2. First and foremost, saving money is important because it helps protect you
in the event of a financial emergency. Additionally, saving money can help
you pay for large purchases, avoid debt, reduce your financial stress, leave
a financial legacy, and provide you with a greater sense of financial freedom.
3. No, it is not wrong. Since it is her savings she can spend it however she
likes.
4. She is wise for thinking about her future.
5. ₱2415
6. There are many reasons why I value education, but there is one main reason
why I appreciate it so much. That reason is all due to my loving and caring
parents. Ever since they day I was born my parents always stressed to me
the importance of education because it won’t only help me get a well-paying
job in the future, but that knowledge is the way to success when it comes to
everyday life. I value education so much because no matter how hard or how
long it takes me to comprehend and learn something at least I’m one step
ahead of someone who isn’t. Overall, education should be something
cherished because not everyone has the chance to go to school and learn.
Education is something that most of us take for granted.
What’s More
Activity 1.1
1. If P = ₱4,500, r = 1.25% and t = 5 years, find the simple interest.
What formula will be used? Is = Prt
How are you going to express the rate in percent? Converting from a decimal
to a percentage is done by multiplying the decimal value by 100 and adding
%
How much is the simple interest? ₱281.25
2. If P = ₱5,000, r = 2% and t = 8 mos., find the maturity value.
Which formula will you use? 𝑭 = 𝑷(𝟏 + 𝒓𝒕) or 𝑭 = 𝑷 + 𝑰𝒔
How are you going to express the time in years? Divide 8 months with 12
𝟐
months and use fraction form which is
𝟑
How much is the maturity value? ₱5066.67
Activity 1.2
1. I = ₱260, F = ₱13,260
2. ₱10,416.67
Activity 1.3
Principal Rate Time Interest Maturity
Value
₱45,000 2% 2.5 years ₱2,250 ₱47,250
₱95,000 1.2% 4 years ₱4,560 ₱99,560
₱105,000 3% 3 years ₱9,450 ₱114,450
Guide Answers:
For the first set of values
a) Interest
b) Is = Prt and 𝑭 = 𝑷(𝟏 + 𝒓𝒕) or 𝑭 = 𝑷 + 𝑰𝒔
What I Can Do
PROPOSAL
PRINCIPAL TIME RATE INTEREST AMOUNT
₱50,000 3 years 1.10% ₱1650 ₱51,650
₱50,000 5 years 1.25% ₱3125 ₱53,125
₱50,000 8 years 1.75% ₱7000 ₱57,000
Aside from the amount to be yielded at the end of each term what are the other
factors that you can consider?
List down the possible questions that you will ask to the couple to determine
those factors.
When will you need your money?
How much money will you deposit?
What’s New
Questions
1. Is Michael’s computation correct?
Yes
2. Is the bank’s computation fair? Why?
Yes, since it is a detailed computation and it is the exact amount.
3. How much is the difference in the total amount to be paid between Michael’s
computation and the bank’s computation?
₱272
4. Why do you think the bank’s computation yielded more interest?
Since the bank used compound interest in the computation.
5. Do you think the bank committed an error in the computation of the amount to
be paid?
No
6. If the term of payment will be longer what do you think will happen between the
difference of the amount to be paid in Michael’s computation and the bank’s
computation?
It will increase.
7. If you are Michael and you follow the computation made by the bank do you think
there is a way to lessen the amount to be paid at the end of 3 years? How?
Michael should pay the loan amount fully so the interest will stop increasing.
What’s More
Activity 2.1
1. If P = ₱85,500, and r = 1.25% compounded monthly for 1 year, find the
compound interest.
What is the first component that should be find? Maturity level
What formula will be used? 𝑭 = 𝑷(𝟏 + 𝒓)𝒕
How much is the maturity value? ₱86,574.89
How are will you find the compound interest? We can find the compound interest
when we subtract the maturity value and the present value.
How much is the compound interest? ₱1,074.89
2. If F = ₱50,000 with the rate 1.5% compounded quarterly for 5 years find
the present value and compound interest
Which should be find first present value or compound interest? Present value
How are you going to express the rate in decimal? 0.015
𝑭
What formula will you use in finding the present value? 𝑷 =
(𝟏+𝒋)𝒏
How much is the present value? ₱46,393.68
How will you find the compound interest? By subtracting the maturity value to the
present value.
How much is the compound interest? ₱3,606.32
Activity 2.2
1. F = ₱57,830.22
I = ₱14,830.22
2. P = ₱97,435.81
I = ₱7564.19
Activity 2.3
Present Nominal Interest Interest Time Total Compound Maturity
Value rate (i(m)) compounded per in number of Interest Value
conversion years conversions
period (j) (n)
What I Can Do
Loan Schedule
Loan Maturity Value Monthly
Amount t=1 t=2 t=3 t=4 t=5 payment
₱10,000 10,500 11,025 11,576.25 12,155.06 12,762.82 ₱212.71
₱20,000 21,000 22,050 23,152.5 24,310.13 25,525.63 ₱425.43
₱30,000 31,500 33,075 34,728.75 36,465.3 38,288.4 ₱638.14
₱40,000 42,000 44,100 46,305 48,620.4 51,051.2 ₱850.85
₱50,000 52,500 55,125 57,881.25 60,775.5 63,814 ₱1063.57
₱100,000 105,000 110,250 115,762.5 121,551 127,628 ₱2127.13
₱150,000 157,500 165,375 173,643.75 182,326.5 191,442 ₱3190.7
₱200,000 210,000 220,500 231,525 243,102 255,256 ₱4254.27
₱250,000 262,500 275,625 289,406.25 303,877.5 319,070 ₱5317.83
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