Mathematics of

Finance
 Financial Literacy
• Financial literacy is the
education and understanding
of various financial areas
including topics related to
managing personal finance,
money and investing.
 News
• Many Filipinos seen still ‘financially
illiterate’- Inquirer
• In a statement, the BSP said Filipino
adults could correctly answer only 3 out of
7 financial literacy-related question.
• Citing the results of a study by the World
Bank, only 2 percent of Filipino adults
answered all questions about financial
literacy correctly.
• Have you ever tried
borrowing money?
 TERMINOLOGIES
• Borrower/Debtor-The person who
borrows money for any purpose
• Lender/Creditor- The person or
institution that lends the money.
• Interest- The payment for the use of
borrowed money.
Simple Interest
Formula
I = PRT
 I = PRT
• I = interest earned (amount of money the
bank pays you)
• P = Principal amount invested or
borrowed.
• R = Interest Rate usually given as a
percent (must changed to decimal before
plugging it into formula)
• T = Time (must be measured in years) or
converted to years by dividing by 12 months
 Final Amount
• The sum of the of the principal and
the interest which is accumulated at
a certain time.
• F= P + I
= P + PRT
= P (1+RT)

Where F is the Final Amount

 Converting
• Change % to decimal • Answers

1) 12% 1) .12 Move 2 places

2) 5% 2) .05 to left & drop % sign
3) 2½% 3) .025
4) 8.5% 4) .085

• Change from decimal to %

5) .098 5) 9.8%
6) .455 6) 45.5%

Move 2 places
to right & add % sign
 I = PRT
Solve for one of variables:
• Solving for I • Solving for other
• Plug in numbers variables
for P, R, & T. • Plug in what you
• Then multiply know.
• Multiply the
numbers that are
on same side then
divide by that
answer.
1. A savings account is set up so that the simple interest earned on the
investment is moved into a separate account at the end of each year. If
an investment of ₱ 5,000 is invested at 4.5%, what is the total simple
interest accumulated in the checking account after 2 years.

• I = PRT • Interest paid by bank

• I= (5,000)(.045)(2) is unknown
• I= ₱ 450 • Principal (invested)
• Rate changed to
decimal
• Time is 2 years
• Multiply
2. A savings account is set up so that the simple interest earned on the
investment is moved into a separate account at the end of each year. If
an investment of ₱ 7,000 is invested at 7.5%, what is the total simple
interest accumulated in the checking account after 3 years.

• I = PRT • Interest paid by bank

• I= (7,000)(.075)(3) is unknown
• I= ₱ 1575 • Principal (invested)
• Rate changed to
decimal
• Time is 3 years
• Multiply
3. When invested at an annual interest rate of 6% an account
earned ₱ 180.00 of simple interest in one year. How much
money was originally invested in account?
3. When invested at an annual interest rate of 6% an account
earned ₱ 180.00 of simple interest in one year. How much
money was originally invested in account?

• P=
𝐼
• Interest paid by
𝑅𝑇
180
bank
• P= = ₱ 3000 • Principal (invested)
(.06)(1)
is unknown
• Rate changed to
decimal
• Time is 1 year
4. When invested at an annual interest rate of 7% an account
earned ₱ 581.00 of simple interest in one year nine months.
How much money was originally invested in account?
4. When invested at an annual interest rate of 7% an account
earned ₱ 581.00 of simple interest in one year nine months.
How much money was originally invested in account?

• P=
𝐼
• Interest paid by
𝑅𝑇
bank
581
• P= • Principal (invested)
(.07)(1.75)
• = ₱ 4742.86 is unknown
• Rate changed to
decimal
• Time is 1 year 9
months= 1
9
=1.75
12
 5. A savings account is set up so that the simple interest earned on
the investment is moved into a separate account at the end of each
year. If an investment of ₱ 7,000 accumulate ₱ 910 of interest in the
account after 2 years, what was the annual simple interest rate on
the savings account?
 5. A savings account is set up so that the simple interest earned on
the investment is moved into a separate account at the end of each
year. If an investment of ₱ 7,000 accumulate ₱ 910 of interest in the
account after 2 years, what was the annual simple interest rate on
the savings account?

• I = PRT • Interest paid by bank

• R=
𝐼 • Principal (invested)
𝑃𝑇
910 • Rate is unknown
• R=
(7,000)(2) • Time is 2 years
• R=0.065 • Multiply
• R=6.5% • Divide
• Change to %
 6. A savings account is set up so that the simple interest earned on
the investment is moved into a separate account at the end of each
year. If an investment of ₱ 2,000 accumulate ₱ 360 of interest in the
account after 4 years, what was the annual simple interest rate on
the savings account?
 6. A savings account is set up so that the simple interest earned on
the investment is moved into a separate account at the end of each
year. If an investment of ₱ 2,000 accumulate ₱ 360 of interest in the
account after 4 years, what was the annual simple interest rate on
the savings account?

• R=
𝐼
• Interest paid by bank
𝑃𝑇
360 • Principal (invested)
• R=
(2,000)(4) • Rate is unknown
• =0.045 • Time is 4 years
• R=4.5% • Multiply
• Divide
• Change to %
7. Sylvia bought a 6-month ₱ 1900 certificate of deposit. At the end
of 6 months, she received a ₱ 209 simple interest. What rate of
interest did the certificate pay?
7. Sylvia bought a 6-month ₱ 1900 certificate of deposit. At the end
of 6 months, she received a ₱ 209 simple interest. What rate of
interest did the certificate pay?

𝐼 • Interest paid by
• R=
𝑃𝑇 bank
• R=
209
• Principal (invested)
(1,900)(0.5)
• Rate is unknown
• =0.22
• Time is 6 months
• R=22% (divide by 12)=0.5
• Multiply
• Divide
• Change to %
8. I earned ₱ 75 of interest over 5 years with a rate of 3%.
How much money did I initially deposit?
 8. I earned ₱ 75 of interest over 5 years with a rate of 3%.
How much money did I initially deposit?

𝐼
P=
𝑅𝑇
75 • Interest paid by
P= bank - ₱ 75
(.03)(5)
• Principal (invested)
=500 unknown
• Rate is .03
P= ₱ 500
• Time is 5 years

₱ 500 will be initially deposited.

 9. Find the interest and the final amount of ₱ 10, 000 at 5½%
simple interest for 3 years.

•I=PRT • Interest paid by

bank - unknown
• I= (10,000)(0.055)(3)
• Principal is 10,000
I= ₱ 1,650
• Rate is
5½%=0.055
F=P+I
• Time is 3 years
=10,000+1,650
= ₱ 11,650

The interest is ₱ 1,650 and the final amount is ₱ 11,650.

 10. Ricardo Dalisay borrowed ₱ 112,000 at 11% simple
interest for 5 years and 3 months. Find the final amount and
interest.

•I=PRT • Interest paid by

bank - unknown
• I= (112,000)(0.11)(5.25)
• Principal is
I= ₱ 64,680 112,000
• Rate is 11%=0.11
F=P+I
• Time is 5 years
=112,000+64,680
4months
= ₱ 176,680 3
= 5 =5.25
12
The interest is ₱ 64,680 and the final amount is ₱ 176,680.
 OCTOBER is
STATISTICS MONTH!
 STATISTICAL
TERMINOLOGIES
 STATISTICAL
TERMINOLOGIES
Statistics Qualitative Graph Grouped
Collect Quantitative Table Ungrouped
Organize Measurement Frequency Event
Present Scales Distribution Combinations
Analyze Population Class Chance
Interpret Sample Intervals Probability
Data Random Limits Normal
Variable Systematic Boundaries Curve
Continuous Cluster Mark Hypothesis
Dependent Direct Size Accept
Independent Indirect Mean Reject
Summation Interview Median Add
Numbers Experiment Mode Subtract
Parameter Text Average Divide
 Activity:
Using 15 Statistical
terms, compose a
poem. Underline the
terms used. Be
creative.