SERAPION C. BASALO MEMORIAL COLLEGES, INC.

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SEMI-DETAILED LESSON PLAN IN GENERAL MATHEMATICS

Lesson 4.2 Compound Interest: Solving for Principal amount, rate of interest, and time
or term.

Prepared by: Checked by:

NELLY ROSE C. MORTIZ JOHN LESTER A. CALANDINGAN

Pre-Service Teacher Cooperating Teacher
 CONTENT STANDARD
The learner demonstrates key concepts of simple and compound interests, and simple and
general annuities.

PERFORMANCE STANDARD
The learner is able to investigate, analyze and solve problems involving simple and compound
interests and simple and general annuities using appropriate business and financial instruments.

LEARNING COMPETENCIES
Computes interest, maturity value, future value, and present value in simple interest and
compound interest environment and solves problems involving simple and compound interests.
M11GM-IIb-1, M11GM-IIb-2

I. LEARNING OBJECTIVES
At the end of the discussion, the learners should be able to;
a. Understand the concept of compound interest.
b. Value the importance of compound interest in dealing with business matters that involves
money.
c. Solve problems involving compound interest.

II. SUBJECT MATTER

Topic: Compound Interest
Materials: Visual Aids, markers, bond papers, and calculator
Reference: General Mathematics (pp. 196-202) by Orlando A. Oronce
Values Integration: Respect and Honesty

III. PROCEDURE
Teachers’ Activity Learners’ Activity
Preliminaries
 Classroom Management
(Students will arrange their chairs
“Before our class starts, kindly arrange your chairs properly
and pick up pieces of garbage on
and pick-up any pieces of trash on the floor and put it directly
the floor)
into the trash bin”
 Prayer
“Everybody stands for a prayer”
(Everybody will stand for the prayer)
  Greetings
“Good afternoon class!” “How was your day?” Good afternoon Ms. Nelly!

 Checking of Attendance
“Classroom secretary, please kindly list down all the
(Classroom secretary will list down
absentees this afternoon and give it to me right after
the absentees)
our discussion!”
A. ACTIVITY

a. Review
(Teacher will ask the topic that was discussed yesterday) (Students response)

“Class, what is maturity value?” “ang tibuok mabayran mam, apil ang
Again… tubu ug ang principal amount!”
“What is maturity value?”
“Maturity value is the amount to be
paid on the due date of a loan.”
“Very Good!”
“How can we solve the maturity value class?” “Maturity value is solve by adding
the principal amount that we have in
the beginning and the interest
earned on that principal amount after
“Very Good!” the completion of the period.”

“Now! To easily calculate maturity value, what formula should “A= P+I”
we use?”
“Or!” “A= P (1+rt)”
“Very Good!”

b. Drill (4 PICS 1 WORD)

 The teacher will show a picture (4 pics).
 The students’ task is to guess what word is being (Students participate)
portrayed in the picture.
 (Students will actively participate)

Follow up question/s:
1. Do you think
these words are
related to each
other?
2. In what way?
(Students response may vary)

c. Motivation (The Boat is Sinking) (5 minutes)

Instructions:
ù The students are given the premise that the imaginary
boat they are on is sinking and therefore have to form
groups to make it to safety.
ù The teacher starts by saying “The boat is sinking…
group yourselves into…” he/she also assigns the
number of people the group has to form.
ù Once everyone has formed their group the teacher will
make sure to count if no one is out of place. If there
was then that student would be the “IT” and thereby
answer a question related to a topic discussed.
ù The activity should be done in 5 minutes.

Possible Consequences:
1. Give the simple interest formula.
2. Give the maturity value formula.
3. If r is the interest rate, what is P? (Students participate)
4. If P is the principal amount, what is t?
5. To solve for maturity value, the interest and principal
amount is given. What operation will you use to solve
the maturity value?

Mechanics:
a)The class will be
divided into two
groups.
b)The group will
choose a RUNNER
who will go in front to
guess the word that is
presented by the
(Students actively participate)
pictures projected in
the TV.
c)If the answer is
correct, 1 point will be (Students analyze and solve the
given trivia question)
given to the group
where the member
belongs.
d)The group who got
3 points will be the
winner.
Mechanics:
a)The class will be
divided into two
groups.
b)The group will
choose a RUNNER
who will go in front to
guess the word that is
presented by the
pictures projected in
the TV.
c)If the answer is
correct, 1 point will be
given to the group
where the member
belongs.
d)The group who got
3 points will be the
win
d. Activity Proper (Match Me, Complete Me!) 5 minutes
Group Activity: A Race
General Instructions:
 The teacher will divide the class into 3 groups through
counting.
 The teacher will provide terminologies.
 The students’ task is to match column A with column B
and complete the trivia using the letters from column
B.
 The group who finishes the task first will receive an
award. The group/s who will finish it last will do the
consequence.
Instructions:
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 one of the products that we should be
proud of as a Filipino.
A B
1. It is the amount paid or O. Borrower or debtor
earned for the use of
money.
2. It refers to the person or N. Compound Interest
institution who owes money
or avails of the funds from
the lender.
3. It is the interest computed T. Interest
on the principal and also on
the accumulated past
interest
4. It is the percentage of the C. rate of interest
principal that will be
changed for a specified
period of time.
5. It refers to maturity value. U. Future value
 This is one of the fruit bearing trees found in the
Philippines. We are second to the highest exporter of this
product all over the world. It is also traditionally called “the
tree of life” because all the parts of this tree have varied
uses, from housing materials, novelty items up to food
products.

_____ _____ _____ _____ _____ _____ _____

4 2 4 2 3 5 1

B. ANALYSIS
The teacher will ask the following questions.
1. How will you define interest in your own words? (Random student will answer)
2. Based on the definition given will you able to know
some important terms in simple business math? If yes (Random students will answer)
try to elaborate just one term.
3. Are all the terms given, important in finding compound (Random students will answer)
interest?
C. ABSTRACTION
(Students participate)

When we add the Compound Interest is the addition

principal and the of interest to the principal sum of a

loan or deposit, or in other words,

interest we
interest on principal plus interest.
The compound interest for an
amount depends on both Principal

called it Maturity and interest gained over periods.

Values and we
write it in form
 (Students pay attention to details)

of S=P+ I
(The teacher will instruct the students to read the definition of
maturity value)

When the interest due at the end of a certain period is added

to the principal and that sum earns interest for the next
(Students pay attention to details)
period, the interest paid is called compound interest.
In general, when interest is compounded annually for n
years, the amount (or future value) is
r
A= P(1+ )nt
n
A = maturity value
P = principal
r = rate of interest
t = time
n = frequency of conversion in a year (Students will analyze and solve the
Note: interest is paid on interest, compound interest is always problem)
greater than simple interest.

Frequency of Conversions (n)

Annually 1
Semi-annually 2
Quarterly 4
Semi-quarterly 8
Monthly 12
Bi-monthly 6
Weekly 52
Daily (normal days) 365
Daily (leap year) 366 (Students pay attention to details)
Example 1:
Find the compound amount on deposit at the end of 1 year if
P20,000 is deposited at 4% compounded (a) annually (b)
semi-annually.
(a) annually
Given: Solution:
r
P=20,000 A= P(1+ )nt
n
0.04 1(1)
r = 0.04 = 20,000(1+ )
1
(Students pay attention to details)
t=1 A = P20 800
n=1

(b) semi-annually
Given: Solution:
r
P=20,000 A= P(1+ )nt
n
0.04 2(1)
r = 0.04 = 20,000(1+ )
2
t=1 A = P20 808
n=2

Now, at this point, what if P, r, and t are the ones missing and (Students pay attention to details)
is needed to be found. What formula will be used?

If P is missing, use the formula,

A
nt
P= r
(1+ )
n
If t is missing, use the formula,
A
log
t= P
n¿¿
If r is missing, use the formula, (Students pay attention to details)

r = n( nt
√ A
P
−1)

Example 2: Principal amount is missing

Find the principal amount on deposit at the end of 1 year if
P20,800 is the compounded amount at 4% compounded
annually.
Given: Solution:
A
nt
A=20,800 P= r
(1+ )
n
20,800
1(1)
r = 0.04 = 0.04
(1+ )
1
t=1 P = P20 000 (Students pay attention to details)
n=1

Example 3: Time is missing

If P320,000 is invested at 8% compounded quarterly. How
long does is take to have P475,503.17 compounded amount.
Given: Solution:
A
log
A=475, 503.17 t= P
n¿¿
475,503.17
log
P= 320,000 = 320,000
4¿¿
r = 0.08 t=5
n= 4

Example 3:
Lauro deposited P64,600 in a savings account which pays an
interest compounded semi-quarterly. If he had a compounded
amount of P88,821.17, what is the rate of interest for 4
years?

Given: Solution:

A=88, 821.17 r = n( nt
√ A
P
−1)

P= 64,600 = 8 [8(4)
√ 88 ,821.17
64 , 600
−1]

t=4 r = 0.08
n= 8
D. APPLICATION
In a ½ sheet of paper. Answer the question.
1. What is the relevance of studying compound interest in
your daily lives?
2. If you invest money, what do you prefer, simple
interest or compound interest?
3. When you have a loan or you borrow money, what
interest would you want best? Simple interest or
compound interest?

E. GENERALIZATION

Always remember that Compound Interest is the addition of

interest to the principal sum of a loan or deposit, or in other
words, interest on principal plus interest. The compound
interest for an amount depends on both Principal and interest
gained over periods.
In general, when interest is compounded annually for n
years, the amount (or future value) is
r
A= P(1+ )nt
n

Also, in solving the P, r, and t, use the following formula:

If P is missing, use the formula,
A
nt
P= r
(1+ )
n
If t is missing, use the formula,
A
log
t= P
n¿¿
If r is missing, use the formula,

r = n( nt
√ A
P
−1)

In addition, compound interest is important when dealing with

investments and loan. As an individual it is necessary to
know and understand these concepts so that in the future you
will know how to solve or calculate your own investment and
loan amount that is with compound interest.
 Further, how can you show respect towards other people
when dealing with business matters? Will you be able to (random student will answer)
show honesty with regards with money matters?

IV. EVALUATION
In a ½ sheet of paper. Solve the following problems involving compound interest. Show your
solutions.
1. Find the maturity (future) value of the indicated principal.

a. P30,000 at 8% compounded semi-annually for 10 years.

b. P152,000 at 9% compounded daily for 4 years.

2. Find the principal amount on deposit at the end of 4 years if P41, 600 is the
compounded amount at 8% compounded annually.

V. ASSIGNMENT

In a ¼ sheet of paper.
1. Your brother asked you about investment and wanted to know the interest that will be
earned if he will invest ₱200,000.00 in a certain bank that offers a quarterly compounding
interest of 6% for 8 years.