GEN MATH
Ma’am Parba’s Class
Suppose I will give
you ₱1,000.00 today,
what would you do
with it?
DECISION MAKING
You want to deposit your ₱ 1, 000 in
savings account for 5 years. Bank A
offers 6% simple interest rate per year
while Bank B offers 6% compounded
annually. Which will you choose and
why?
SIMPLE AND COMPOUND
INTEREST
Objectives
1.
illustrates simple and compound interests.
2.
distinguishes between simple and
compound interests.
ACTIVITY 1
Match the terminologies in column B to
its definition or statement in column A.
Write your answer on the blanks
provided below the trivia question inside
the box. Your answer should reveal an
important Filipino value that everyone
should possess.
What Filipino value is shown when a person
bows down towards another person older
than him or takes his hand or her hand and
presses it on the forehead? This is an important
Filipino value that the younger generations
should never forget and performed with the
right hand
and saying "Mano Po" to the elders.
_____ _____ _____ _____ _____ _____ _____
1
4
3
2
4
6
5
A
B
1. It is the amount of time in years the money is S. Creditor
borrowed or invested.
2. It is the date on which the total amount R. Time or
borrowed with interest is to be completely repaid.
Term
R
P
3. It refers to the person or institution that invests the
money or makes the funds available.
4. It is the amount of money borrowed or invested
on the origin date.
5. It is the amount after t years that the lender
receives from the borrower on the maturity date.
6. It is the date on which money is received by the
borrower.
S
E
T
C
C. Origin/
Loan Date
E. Principal
P. Maturity
date
T. Maturity/
Future
What Filipino value is shown when a person
bows down towards another person older
than him or takes his hand or her hand and
presses it on the forehead? This is an important
Filipino value that the younger generations
should never forget and performed with the
right hand
and saying "Mano Po" to the elders.
E _____
S _____
E
_P _____
C _____
T
_____
_____
R _____
1
4
3
2
4
6
5
DECISION MAKING
You want to deposit your ₱ 1, 000 in
savings account for 5 years. Bank A
offers 6% simple interest rate per year
while Bank B offers 6% compounded
annually. Which will you choose and
why?
Bank A
TIME t PRINCIPAL
YEARLY INTEREST
BALANCE AT END YEAR
ANSWER
SOLUTION
1
₱1000
₱1000x0.06X1 ₱60
2
3
₱1000
₱1000x0.06X2 ₱120 ₱1000+1120=₱1120
₱1000
₱180
4
₱1000x0.06
X3
₱1000
₱240 ₱1000+240=₱1240
5
₱1000
₱1000x0.06
X4
₱1000x0.06
X5
₱1000+60=₱1060
₱1000+180=₱1180
₱300 ₱1000+₱300=₱1300
TIME PRINCIPAL
t
1
2
3
4
5
Bank B
YEARLY INTEREST
ANSWER
SOLUTION
₱1000x0.06X ₱60
1
₱1060x0.06X ₱63.60
₱1060
1
₱1123.60x0.06
₱1123.60
X1
₱67.42
₱1000
₱1191.02
₱1191.02 x0.06X1
₱1262.48
₱1262.48
BALANCE AT END YEAR
₱1000+60=₱1060
₱1060+63.60=₱1123.60
₱1123.60+67.42=
₱1191.02
₱1191.02+71.46=
₱71.46
₱1262.48
₱1262.48+75.75=
₱75.75
₱1338.23
INTEREST GAINED
BANK A (Simple Interest)
₱1,300-₱1000=₱300
BANK B (Compound interest)
₱1338.23-₱1000=₱338.23
ACTIVITY 2
Is it a FACT OR a BLUFF?
Based on the given illustration, read and analyze each
statement whether it is a fact or just a bluff., if the answer is
BLUFF tell the word or phrase that will make the statement
correct.
1. Simple interest changes throughout
the investment term.
BLUFF
ACTIVITY 2
Is it a FACT OR a BLUFF?
Based on the given illustration, read and analyze each
statement whether it is a fact or just a bluff., if the answer is
BLUFF tell the word or phrase that will make the statement
correct.
2. Simple interest computation will always
be based on the original principal.
FACT
ACTIVITY 2
Is it a FACT OR a BLUFF?
Based on the given illustration, read and analyze each
statement whether it is a fact or just a bluff., if the answer is
BLUFF tell the word or phrase that will make the statement
correct.
3. Interest is the amount of money
invested or borrowed originally.
BLUFF
ACTIVITY 2
Is it a FACT OR a BLUFF?
Based on the given illustration, read and analyze each
statement whether it is a fact or just a bluff., if the answer is
BLUFF tell the word or phrase that will make the statement
correct.
4. Simple interest is the product of the
principal, rate of interest, and time.
FACT
ACTIVITY 2
Is it a FACT OR a BLUFF?
Based on the given illustration, read and analyze each
statement whether it is a fact or just a bluff., if the answer is
BLUFF tell the word or phrase that will make the statement
correct.
5. In compound interest, principal
increases as interest compounds and
gets added to it.
FACT
ACTIVITY 2
Is it a FACT OR a BLUFF?
Based on the given illustration, read and analyze each
statement whether it is a fact or just a bluff., if the answer is
BLUFF tell the word or phrase that will make the statement
correct.
6. In simple interest, the interest from the
previous year also earns interest.
BLUFF
Using the Venn Diagram below, give the similarities and
differences between simple and compound interest
Compound
Interest
The interest remains
Your
The interest grows
constant throughout money
every year.
the year.
grows Computed based on
over time the principal and
Computed based on
accumulated past
the principal.
interests.
Simple Interest
Why do you think it is
important to learn about
simple and compound
interest?
Choose the letter of the best answer. Write the
chosen letter on a separate sheet of paper.
1. What interest remains constant throughout the
investment term?
a. simple
c. annuity due
b. compound
d. ordinary annuity
2. It is an interest computed based on the
principal amount.
a. simple
c. annuity due
b. Compound
d. ordinary annuity
3. What is the difference between simple and
compound interest?
a. Simple yields higher interest than compound interest.
b. Simple interest has a shorter term than compound
interest.
c. Simple interest is always better than compound
interest.
d. Simple interest is computed based on the principal
while compound interest is computed based on the
principal and also on the accumulated past interests.
4. Which of the following statement is true about the
borrower or debtor?
a. It is the amount of money borrowed or invested on
the origin date.
b. It is the interest computed on the principal and also
on the accumulated past interests
c. It refers to the person (or institution) who owes the
money or avails of the fund from the lender.
d. It refers to the person (or institution) who invests the
money or makes the funds available.
5. It is an amount after t years that the lender
receives from the borrower on the maturity date.
a. loan date
c. maturity value
b. maturity date d. term
6. It is the amount of money borrowed or
invested on the origin date.
a. future value
c. maturity value
b. principal value d. repayment value
7. A person (or institution) who invests the money
or makes the funds available.
a. Lender c. Both a and b
b. Creditor d. None of the choices.
8. It refers to an interest that is computed based
on the principal and interest accumulated every
conversion period.
a. simple c. annuity due
b. compound d. ordinary annuity
9. Someone who has the privilege of using a
fund and promises to pay at some future date is
called
a. Lender c. Both a and b
b. Creditor d. None of the choices.
10. The amount calculated on the principal and
accumulated interest from previous periods on a
deposit or loan is
a. simple
c. annuity due
b. compound
d. ordinary annuity
ASSIGNMENT:
Read and answer the problem by illustrating the simple and
compound interest.
Due to the COVID-19 pandemic Miss Cruz a female resident
of Brgy. Marikit thinks of a business that can provide for her
needs as well as the need of her neighbors so she can be of
help even in this trying time.
Having no money at hand, help her decide where to
borrow from a bank that has a start-up capital of ₱50,000.00
at a 7% simple interest rate payable within 5 years or a bank
that has a start-up capital of ₱50,000.00 at 7% interest rate
compounded annually and payable within 5 years.
Compute the interest yield.
See you next meeting!
THANK YOU!