GALLANOSA NATIONAL HIGH SCHOOL

San Pedro, Irosin, Sorsogon

Quarter 2 Learning Activity Sheet No. 2
RATE, TIME, INTEREST, MATURITY, AND PRESENT VALUES
IN SIMPLE AND COMPOUND INTERESTS

Name of the Student: _________________________ _

Learning Area/Grade Level: GENERAL MATHEMATICS/ GRADE 11
Date: _ _______ ______________ __

I. Introductory Concept:
Previously, you have learned the difference between simple and compound interests. In this
activity sheet, you will further examine and compare the simple and compound methods of
calculating interest. This will also help you decide on what investment will pay you most over
time or will give you low interest as much as possible when you borrow money.

II. Learning Skills from the MELCs:

The learner:
a. computes interest, maturity value, future value, and present value in simple interest
and compound interest environment. (M11GM-IIa-b-1)
b. solves problems involving simple and compound interests. (M11GM-IIb-2)

III. Activities
Let Us Study
Lesson 1: Interest, Maturity, Future, and Present Values in Simple Interest

In computing simple interest, the formula is:

The above formula can be manipulated to derive the following relationships:

Formula for finding Formula for finding Formula for finding

the Principal Amount the Rate the Time

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To find the maturity or future value, you can use either of the following:

Example 1. Given: 𝑃 = ₱18, 500, 𝑟 = 3%, 𝑡 = 5 yrs.

Find the simple interest (𝐼𝑠).
Solution: Rate must be converted in
𝐼𝑠 = 𝑃𝑟𝑡 decimal form before substituting
𝐼𝑠 = ₱18,500 (0.03) (5) in the formula.
𝐼𝑠 = ₱2,775
Example 2. Given: 𝑃 = ₱ 20,000, 𝐼𝑠 = ₱ 4,000, 𝑡 = 4 yrs.
Find the rate (𝑟).
Solution:
𝐼𝑠
𝑟= Express your final answer in
𝑃𝑡
4000 percent by multiplying the
𝑟= decimal value by 100 and affixing
(20,000)(4)
𝑟 = 0.05 the % sumbol.
𝑟 = 5%
Example 3. Given: 𝑃 = ₱40,000., 𝐼𝑠 = ₱700, 𝑟 = 7%. Find time (𝑡).
Solution:
𝐼𝑠
t=
𝑃𝑟
700
t= Express your answer as a unit of
(40,000)(0.07)
t = 0.25 time.
t = ¼ year or 3 months
Example 4. Given: 𝑃 = ₱15,000, 𝑡 = 4 months, 𝑟 = 2%.
Find the maturity value or future value (𝐹).
Solution:
1 𝑦𝑟 4 𝟏
Hint: Time must be expressed in years so: 4 months x = = yr.
12 𝑚𝑜𝑛𝑡ℎ𝑠 12 𝟑

𝐹 = 𝑃 (1 + 𝑟𝑡)
1
𝐹 = 15,000 [1 + (0.02) ( )]
3

𝐹 = ₱15,100

Alternative Solution:
𝐼𝑠 = 𝑃𝑟𝑡 𝐹 = 𝑃 + 𝐼s
1
𝐼𝑠 = (₱15,000) (0.02) ( ) 𝐹 = 15,000 + 100
3
𝐼𝑠 = ₱100 𝐹 = ₱ 15,100

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 Lesson 2: Interest, Maturity, Future, and Present Values in Compound Interest

In computing the compound interest and other related components, the formulas are:

where:
F = maturity or future value
P = principal or present value
r = interest rate, in decimal form
t = term or time, in years
Ic = compound interest

Example 5. Given: P= ₱18,500

r = 3% compounded annually
t = 3 years
Find: a. maturity value (F) and b. compound interest (Ic ).
Solution:
a. 𝐹 = 𝑃 (1 + 𝑟)𝑡 b. 𝐼𝑐 = 𝐹 – P
𝐹 = 18,500 (1 + 0.03)3 𝐼𝑐 = 20,215.45 – 18,500
F = ₱ 20,215.45 𝐼𝑐 = ₱1,715.45

Example 6. Given F = ₱15,000, r = 2% compounded annually for 4 years, find the present value
Solution:
𝐹
P = (1+𝑟)𝑡
15,000
P = (1+0.02)4

P= ₱13,857.68

Compounding More Than Once a Year

In the examples above, the interests are compounded annually. However, there are cases wherein
interest is compounded more than once a year. In this case, additional terms must be clarified such as:
Frequency of conversion (m) - number of conversion periods in one year
Total number of conversion periods (n)
n = mt = frequency of conversion 𝑥 time in years
Rate (j) of interest for each conversion period (𝑗)
𝑟 𝑎𝑛𝑛𝑢𝑎𝑙 𝑟𝑎𝑡𝑒 𝑜𝑓 𝑖𝑛𝑡𝑒𝑟𝑒𝑠𝑡
j= =
𝑚 𝑓𝑟𝑒𝑞𝑢𝑒𝑛𝑐𝑦 𝑜𝑓 𝑐𝑜𝑛𝑣𝑒𝑟𝑠𝑖𝑜𝑛

The formula of Maturity Value (F) for interest compounding m times a year is:

𝒓 𝒎𝒕
𝐹 = 𝑃(𝟏 + 𝐣)𝒏 or 𝐹 = 𝐏 (𝟏 + 𝒎
)
𝑟
where: j = , n = mt
𝑚
P – Principal amount
t - time in year

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Example 7. Find the maturity value and interest if ₱15,000 is deposited Hint: Frequency of conversion
in the bank at 3% compounded quarterly for 5 years. period (m):
Given: Annually – once a year
P = ₱15,000 Semi-annually – twice a year
r = 3% = 0.03 Quarterly – 4 times a year
m = 4 (compounded quarterly) Monthly – 12 times a year
t = 5 years Weekly – 52 weeks a year
Required: a. Maturity value (F); b. Interest Daily- 365 times a year
Solution:
𝑟 𝑚𝑡
a. 𝐹 = P (1 + )
𝑚

0.03 (4)(5)
𝐹 = ₱15,000 (1 + )
4

𝐹 = ₱15,000 (1 + .0075)20
F = ₱17,417.76

b. I= F-P
I = ₱17,417.762- ₱15,000
I = ₱ 2,417.76
Hence, ₱15,000 deposited in the bank at 3% compounded quarterly for 5 years will grow to
₱17,417.762. Thus, the interest earned will be ₱2,417.76.

Example 8. Find the present value of an amount of money invested at 9% compounded semi-annually
if ₱50,000 is due in 5 years.
Given:
F = ₱50,000
r = 9% = 0.09
m = 2 (compounded semi-annually)
t = 5 years
Required: Present value (P)
Solution:

𝐹 = 𝑃(1 + j)𝑛
F 𝑟 0.09
𝑃 = (1 where: j = = = 0.045
+ 𝑗)𝑛 𝑚 2
n = mt = 2(5) = 10

₱ 50,000
𝑃 = (1
+ 0.045)10

P = ₱ 32,196.38
Therefore, an amount of ₱32,196.38 was invested at 9% compounded semi-annually due in 5 years

Lesson 3: Solving Problems Involving Simple and Compound Interest

In solving problems involving simple and compound interests, we can follow the 4 –step rule
of George Polya.

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Let us take the following examples.
1. Mariel deposited ₱ 16,000.00 in a bank that offers a simple interest rate of 1.75%. If she placed
the money for 7 years, how much interest will she earn?
Given: P = ₱ 16,000.00
Explore
r = 1.75%
t= 7 years
Required: Simple Interest
Solution: Plan and Solve
Using the formula of simple interest 𝐼𝑠 = 𝑃𝑟𝑡 we will arrive at:
𝐼𝑠 = (₱ 16,0000) (0.0175) (7)
𝐼𝑠 = ₱ 1,960.00
Therefore, Mariel earned ₱ 1,960.00 as interest.

2. Miguel wanted to apply for a loan from a lending company. The company offers different terms
of the loan which are as follows:
₱ 50,000.00 loan at 1.15% interest compounded semi-annually for 3 years

₱ 50,000.00 loan at 1.25% interest compounded annually for 3 years

For Miguel to choose wisely which term willyears

benefit him more, there is a need for him to analyze
the given conditions first.

P = ₱ 50,000.00 P = ₱ 50,000.00 If he will choose to apply for a

r = 1.15% compounded semi- r = 1.25% compounded loan with 1.15% interest
Given

annually annually compounded semi - annually

t= 3 years t= 3 years for 3 years she will need to pay
an interest amounting to
𝑟 𝑚𝑡 𝐹 = P(1 + 𝑟)𝑡
𝐹 = P (1 + ) ₱ 1,749.99
Future value

𝑚
Maturity or

𝐹 = 50,000(1 + 0.0125)3
0.0115 2(3)
𝐹 = 50,000 (1 + ) F = 51,898.54
2
However, if he chooses to apply
F = 51,749.99
a loan at 1.25%interest
Ic= F-P Ic= F-P compounded annually for 3
Interest

Ic= 51,749.99 –50,000 Ic= 51,898.54 –50,000 years, he will need to pay
Ic = ₱ 1749.99 Ic = ₱ 1898.54 ₱ 1,898.54.

Since this is a loan and he needs to pay the interest, it is better to apply for a loan with 1.15%
interest compounded semi-annually for 3 years. In this way, Miguel will pay the lesser amount.

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 Are you ready to apply what you have learned?

Let Us Practice
Complete the tables below by finding the unknown.
A. Simple Interest
Principal Rate Time Interest Maturity Value
₱45,000 2% 2.5 years (1) (2)
(3) 1.2% 4 years ₱4,560 (4)
₱105,000 3% (5) (6) ₱114,450

B. Compound Interest
Principal Rate Time Interest Maturity Value
10,000 9% 5 years (7) (8)
25,000 3% 4 years (9) (10)

Let Us Practice More

Complete the table by finding the unknown.
Present Rate Interest Interest per Time Total no. of Compound Maturity
Value conversion in conversions Interest Value
period (j) years (n)
₱60,000 3% quarterly (1) 3 yrs (2) (3) (4)
(5) 6% Semi-annually (6) 4 yrs (7) (8) 40,000

Evaluation
Solve the following problems. Show your solutions in finding the correct answer.
1. Ian is investing ₱14,000 for 2 years. The interest rate is 5%. How much interest will Ian earn
after 2 years?
2. Mark invested a certain amount at 5% simple interest per year. After 10 years, he received an
interest of ₱50,000. How much did he invest?
3. Karla borrowed ₱80,000 in a bank at 8% compounded annually, how much will she pay after 3
years?
4. How much money would you need to deposit today at 15% annual interest compounded
annually to have ₱1,500,000 in your account after 9 years?
5. To earn ₱2,000,000 in a bank account after 20 years at 8% interest compounded semi-
annually, how much does a person need to invest at present?

IV. Rubric for Scoring

Rubric Description Weight

Correctness of the Answer The answer presented is exact to what is agreed 70%
which means it follows the number of decimals
present in the final answer to avoid confusion.
Detailed Procedure The procedure was a carefully step by step 30%
procedure not ignoring the importance of each
step

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 V. Answer Key
10. ₱ 28,137.72 5. ₱ 416,578.09
9. ₱ 3,137.72 4. ₱ 426,393.62
8. ₱ 15,386.24 8. ₱ 8423.63 3. ₱ 100,776.96
7. ₱ 5,386.24 7. 8 2. ₱ 50,000
6. ₱ 9450 6. 0.03 1. ₱ 1,400
5. 3 5. ₱ 31,576.37 Evaluation
4. ₱ 99,560 4. ₱ 65,628.41
3. ₱ 95,000 3. ₱ 5628.41
2. ₱ 47,250 2. 12
1. ₱ 2250
1. 0.0075
Let Us Practice Let Us Practice More

VI. References

➢ Department of Education Region IV. General Mathematics – SHS Quarter 2 - Module 2-3
➢ Department of Education Region II. General Mathematics – Grade 11 Quarter 2 –
Learning Activity Sheets

Prepared by:

JENNIE F. OLIVENZA
Special Science Teacher I
LAS Writer

Quality Assured by:

GRAZIELLE R. TAN
Master Teacher II
Subject Group Head - Math and ABM

IVY JILL H. VALMORES

Assistant School Principal II

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