# The simple interest is given by Is = P rt The maturity value is given by F = P + Is where Is = simple interest F = maturity or future value P = principal r = rate of interest t = time or term EXAMPLE 1

The simple interest is given by

Is = P rt

The maturity value is given by

F = P + Is

where

Is = simple interest

F = maturity or future value

P = principal

r = rate of interest

t = time or term

EXAMPLE 1. H&G Company offers 15% annual simple interest rate for a

particular deposit. If John deposited 1 hundred thousand pesos, (a)how much

will be the interest earned in his savings account for 1 year? (b) How much

will be the total amount on his account?

Given:

P = 100, 000

r = 15% = 0.15

t = 1 year

Is = P rt

= (100000)(0.15)(1)

= 15000

F = P + Is

= 100000 + 15000

= 115000

EXAMPLE 2. How much interest is charged when P35,000 is borrowed for

9 months at an annual simple interest rate of 10%? Find the maturity value.

Given:

P = 35, 000

r = 10% = 0.1

t =

9

12 = 0.75 year

Is = P rt

= (35000)(0.1)(0.75)

= 2625

F = P + Is

= 35000 + 2625

= 37625

EXAMPLE 3. At an annual interest of 8% an amount earned P35,500 of

simple interest in 5 years. Find the principal money invested.

Given:

r = 8% = 0.08

t = 5years

Is = 35500

P =

Is

rt

=

35500

(0.08)(5)

= 87500