Word Problems

Simple Interest

1. Niel deposits P4,000 at a bank at an interest rate of 4.5% per year. How much interest will he
earn at the end of 5 years?

GIVEN: SOLUTION:
P = P4,000 I = Prt
r = 4.5%
t = 5 years = P4,000 (4.5%)(5)

I=? =₱900

2. Steve borrowed P3,000 from a bank at an interest rate of 12% per year for a 2 year period. How
much interest does he have to pay at the end of 2 years?

GIVEN: SOLUTION:
P = P3,000 I = Prt
r = 12%
t = 2 years = P3,000 (12%)(2)

I=? =₱720

3. How long does it take for a principal of P40,000 at a simple interest rate of 10% to become
P20,000?
SOLUTION:
GIVEN:
I
P = P40,000 𝑡=
r = 10% Pr
I = P20,000
20000
𝑡=
t=? 40000(10%)

20000
𝑡= t=5
4000

4. Aaron deposits P5,000 in a bank which earn him an interest of 10%. What is the total amount he
will get after 2 years?

GIVEN: SOLUTION:
P = P5,000 I = Prt
r = 10% = ₱5,000(10%)(2)
t = 2 years =₱1,000
F = P+I
F=?
= ₱5,000 + ₱1,000
= ₱6,000
5. How long should Klein invest the amount of P60,000 to earn an interest of P2,000 at 4%

SOLUTION:
GIVEN:
I
P = P60,000 𝑡=
r = 4% Pr
I = P2,000
2000
𝑡=
t=? 60000(4%)

2000 5
𝑡= t= or 10 months
2400 6

6. Yuki deposited P10,000 in the bank. After 2 years, it totals P 30,000. What is the simple interest
rate?
SOLUTION:
GIVEN:
I
P = P10,000 𝑟=
t = 6 years Pt
I = P55,000 – P10,000 = P45,000
45,000
r=? 𝑟=
10000(6)

45000
𝑟= r = 0.75 𝑜𝑟 75%
10000
7. Ian invested P50,000 for 5 years at 7% interest rate. Find the total amount he got.

GIVEN: SOLUTION:
P = P50,000 I = Prt
r = 7% = ₱50,000(7%)(5)
t = 5 years =₱17,500
F = P+I
F=?
= ₱50,000 + ₱17,500
= ₱67,500

8. P2,000 was invested for 3 years. I earned P204 in interest. What was the rate

GIVEN: SOLUTION:
P = P2,000 I 1,800
t = 3 years 𝑟= 𝑟=
Pt 2000(3)
I = P2,000 – P200 = P1,800
1,800
𝑟= r = 0.30 𝑜𝑟 30%
r=? 6000

9. An investment earned P10 interest after 1 year. The rate was 5%. What was the principal?

GIVEN: SOLUTION:
r = 5% I 10
t = 1 year 𝑃= 𝑃=
rt 5%(1)
I = P10
10
𝑃= P = P200
P=? 5%
 10. Lina’s investment accumulated a total amount of P80,000 interest after 4 years with an interest
rate of 10%. What was the principal?
GIVEN: SOLUTION:
r = 5% I 10
t = 1 year 𝑃= 𝑃=
rt 5%(1)
I = P10
10
𝑃= P = P200
P=? 5%

DISCOUNT

11. James borrowed P 10,000 for 7 months from Nina who charged 5% simple discount. How much
money did James received?
SOLUTION:
GIVEN:
F = P10,000 D = Fdt
d = 5% = P10,000(5%)(9/12)
t = 9/12 = P375
P=F-D
D=? = P10,000 – P375
= P9,625

12. Joseph agreed to let Jane borrow money for a total of P168,000 for 80 days. If the discount rate
was 10%, what was the total money Jane received?
SOLUTION:
GIVEN:
F = P168,000 D = Fdt
d = 10% = P168,000(10%)(80/360)
t = 80/360 = P3,733.33
P=F-D
D=? = P168,000 – P3,733.33
= P164,266.67

Compound Interest

13. Find the present value of P150,000 due at the end of 9 years. If money is worth 5% compounded
quarterly, how much is the compound interest?

GIVEN: SOLUTION:
F = P150,000 n=txm P= F(1+i)-n I=F-P
j = 5%
=9x4 = ₱150,000 (1 + 1 ¼ %)-36 = P150,000 - ₱ 95,911.37
t = 9 years
m=4 = 36 = ₱150,000 (0.63940916) = P54,088.63
i = j/m = ₱ 95,911.37
= 5/4
= 1 1/4%

14. Accumulate P6,500 at an interest of 10% compounded annually for 25 years.

GIVEN: SOLUTION:
P = P6,500 n=txm F= P(1+i)n
j = 10% = 25 x 1 = ₱6,500 (1 + 10%)25
t = 25 years
= 25 = ₱6,500 (10.83470594)
m=1
i = j/m = ₱ 70,425.59
= 10/1
= 10%
 15. Karen has P8,000 that she invests in an account that pays 7% interest compounded semi-
annually. How much does Karen have at the end of 6 years

GIVEN: SOLUTION:
P = P8,000 n=txm F= P(1+i)n
j = 7% =6x2 = ₱8,000 (1 + 3 1/2%)12
t = 6 years
= 12 = ₱8,000 (1.51106866)
m=2
i = j/m = ₱ 12,088.55
= 5/2
= 3 1/2%

16. Brian wants to have a total of P40,000 in 2 years that pays 5% interest compounded quarterly.
How much should Brian put into his account so that he’ll have P40,000 at the end of 2 years?

GIVEN: SOLUTION:
F = P40,000 n=txm P= F(1+i)-n
j = 5%
=2x4 = ₱40,000 (1 + 1 ¼ %)-8
t = 2 years
m=4 =8 = ₱40,000 (0.90539845)
i = j/m = ₱ 36,215.94
= 5/4
= 1 1/4%

17. Daniel plans to put his savings into an account and leave it there for 3 years. He has a total of
P3,500 as his savings and puts in into an account that earns 4% interest compounded annually.
How much will be in Daniel’s account at the end of 3 years?

GIVEN: SOLUTION:
P = P3,500 n=txm F= P(1+i)n
j = 4% =3x1 = ₱3,500 (1 + 4%)3
t = 3 years
=3 = ₱3,500 (1.12486400)
m=1
i = j/m = ₱ 3937.02
= 4/1
= 4%
Annuity

18. BPI is paying 8% interest compounded quarterly. Find the future value of P10,000 deposited for
6 years.

GIVEN: SOLUTION:
R = P10,000 n=txm S= Rsn˥i
j = 8% = 6 x4 = ₱10,000 (30.4218625)
t = 6 years
= 24 = ₱304,218.63
m=4
i = j/m
= 8/4
= 2%
19. Pamela invested P5,000 at the end of every 6-month period for 5 years, at 5% interest
compounded quarterly. How much is Pamela’s investment worth after 5 years?

GIVEN:
R = P5,000
SOLUTION:
j = 5%
t = 5 years
n=txm S= Rsn˥i
m=4 =5x4 = ₱5,000 (22.5629785)
= 20 = ₱112,814.89
i = j/m
= 5/4
= 1 1/4%

20. Teshin’s Savings & Loan is paying 6% interest compounded annually. What is the future value of
P1,000 for 4 years?

GIVEN: SOLUTION:
R = P1,000
j = 6% n=txm S= Rsn+1˥I - R
t = 4 years
m=1 =4x1 = ₱1,000 s 4+1˥6% - P 1,000
=4 = ₱1,000 s 5˥6% - P1,000
i = j/m = P1,000(5.6370930) – P1,000
= 6/1 = P5,637.09 – P1,000
= 6% = P4,637.09
 PROJECT
IN
MATHEMATICS
OF
INVESTMENT
SUBMITTED TO:
DR. ERLITA GUERRA
PROFESSOR

SUBMITTED BY:
KWENZIE ARBIN N. FORTALEZA
BSA-II STUDENT