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Colegio de San Gabriel Arcangel

Here are the solutions to the problems in Activity 2: 1. P13,154.50 (discounted P13,454.50 at 3% for 130 days) 2. P13,500.00 (present value of P15,024.00 at 11% for 8 months) 3. 5% (interest rate that makes P8,520 the present value of P9,500 due in 6 months) 4. 1 year (time it takes for P17,000 at 3.5% to grow to P17,230) 5. 6% (rate that makes P2,110 the present value of P2,850 due in 90 days) 6. 1 year (

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73 views3 pages

Colegio de San Gabriel Arcangel

Here are the solutions to the problems in Activity 2: 1. P13,154.50 (discounted P13,454.50 at 3% for 130 days) 2. P13,500.00 (present value of P15,024.00 at 11% for 8 months) 3. 5% (interest rate that makes P8,520 the present value of P9,500 due in 6 months) 4. 1 year (time it takes for P17,000 at 3.5% to grow to P17,230) 5. 6% (rate that makes P2,110 the present value of P2,850 due in 90 days) 6. 1 year (

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Colegio de San Gabriel Arcangel

City of San Jose del Monte, Bulacan, Philippines


COLLEGE OF LIBERAL ARTS AND SOCIAL SCIENCES

Program : Bachelor of Arts In Psychology


Course code : GECO 4
Description : Mathematics In The Modern World

LAS #15
Name:______________________ Score :____________________
Date : _____________________ Section :____________________

Activity Title : Simple Interest, Simple Discount

Learning Target: 1. I can find the present value given the final amount.

References : 1. Sirug, Winston S. Mathematics In the Modern World, Manila:


Mindshapers Co. Inc.
2.Anasin Gil. Module in Mathematics of Investment, Unpublished.

DISCUSSION:
Finding the Present Value (Discounting at Simple Interest Rate)
Present Value – means current value of specified future amount. It is the value now of a sum of
money expected to be received in the future, calculated by subtracting the interest and other
value that will accrue in the intervening period.
F
Formula: Since F = P ( 1 + rt), therefore P =
(1 + rt )

In Algebra this can be written also as P = F ( 1 + rt)-1

Example 1: If money is worth 6%, find the present value on P35,000


due in 3 years.

Solution: F = P35,000 r = 6% t=3

P = F ( 1 + rt)-1
P = P35,000( 1 + .06 * 3 )-1
P = P29,661.02

Example 2: Discount P15,000 for 8 months at 6% simple interest

8
Solution: F = P15,000 r = 6% t=
12
P = F ( 1 + rt)-1
8 -1
P = P15,000( 1 + .06 * )
12
P = P14,423.08
Example 3: What principal will amount to P35,000 in 2 years if the interest rate is 6%
Solution: F = P35,000 r = 6% t=2

P = F ( 1 + rt)-1
P = P35,000( 1 + .06 * 2 )-1
P = P31,250.00

ACTIVITY 1

Name: ______________________________ Score: _____Rating: ______

Course, Yr. & Section: _______________ Date: ____________

Complete the table below

Principal (P) Rate (r) Time (t) Final Amount (F)

1. 20,000.00 5% 3 years

2. 2½% 6 months 16,500.00

3. 17,500.00 5 months 20,000.00

4. 30,000.00 3% 36,000.00

5. 3,750.00 4% 1 ½ year

6. 7% 3 ½ months 49,000.00

7. 22,500.00 9 months 27,000.00

8. 14,500.00 6% 15,022.00

9. 7¼% 15 months 11,015.00

10. 6 ⅓% 11 months 23,420.00


ACTIVITY 2

Name: ______________________________ Score: _____Rating: ______

Course, Yr. & Section: _______________ Date: ____________

Solve the following problems.

1. Discount P13,454.50 for 130 days at 3% simple interest.

2. Find the present value on P15,024.00 for 8 months at a simple interest rate of 11%.

3. If P8,520.00 is the present value of P9,500.00 which is due at the end of 6 months, Find the
simple interest rate.

4. When must P17,230.00 be due if its present value today at 3 ½ % is P17,000.00

5. At what rate is P2,110.00 the present value of 2,850.00 due in 90 days?

6. How long will it take P8,070.00 to accumulate to P9,020.00 if invested at 4 ¼ %?

7. What principal will amount to P67,500.00 in 9 months if the interest rate is 12%?

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