1. Simple Interest

2. Simple Interest or flat rate
- refer to the amount to be paid on
top of the amount borrowed or lent.
- it may also be the amount earned
by a certain amount of money
deposited in a bank.

3. I – Interest or the amount of interest paid
P – Principal or the amount lent or borrowed
R – Rate or the percentage of the principal
T – Time (in years) of the loan
I = P × R × T

4. Carlo purchased a computer by obtaining a
simple interest loan. The computer costs ₱48,000
and the interest rate on the loan is 12%. If the loan
is to be paid back in monthly installments for 2
years, what is the amount of interest to be in 2
years? What is the total amount to be paid back?
How much will he pay monthly?

5. Given facts:
1. If the loan is to be paid back in monthly
installments for 2 years, what is the
amount of interest to be in 2 years?
I = ₱48,000 × 0.12 × 2
= ₱ 11,520.00
• Principal: P = ₱48,000
• Interest Rate: R = 12% or 0.12
• Payment Time: T = 2 years
I = P × R × T
Carlo needs to pay
₱11,520.00 for the
interest.

6. 2. What is the total amount to be paid back?
= ₱48,000 + ₱11,520
= ₱59,520
3. How much will he pay monthly?
=
₱59,520
24 months
= ₱ 2,480.00
Total amount to be paid = Principal + Interest
Carlo will pay
₱59,520 in all.
Monthly payment =
total amount to be paid
24 months
Carlo has to pay ₱ 2,480.00
every month for two years.

7. A total of ₱ 1,200 is invested at a simple
interest rate of 6% for 4 months. How much
interest is earned on this investment?
Given facts:
= ₱ 1,200 × 0.06 × 0.33
= ₱ 23.76 or ₱ 24.00
• Principal: P = ₱1,200
• Interest Rate: R = 6% or 0.06
• Payment Time: T = 4 mos. or 0.33
Before we can apply the formula, we will need to write the time of 4 months in
terms of years. Since there are 12 months in a year: 4 ÷ 12 = 0.33
I = P × R × T
The interest earned is
₱24.00

8. Practice:
To buy a computer, Raquel borrowed
₱3,000 at 9% interest for 4 years. How much
money did she have to pay back?
Given facts:
= ₱ 3,000 × 0.09 × 4
= ₱ 1,080
• Principal: P = ₱3,000
• Interest Rate: R = 9% or 0.09
• Payment Time: T = 4 years
I = P × R × T
Raquel had to pay back ₱3,000
in principal plus ₱1,080 in
interest for a total of ₱
4,080.00.