GEN MATH M1-10 Flashcards
The amount of a borrower pays for using money
Interest(I)
The amount of money borrowed or deposit
Principal (P)
The interest paid on one unit (peso) of capital (principal)
Rate of Interest (r)
The amount of time allotted for repayment of the principal plus the interest. It is a term in years
Time(t)
The principal amount plus the interest. Also called FUTURE VALUE (FV) or Maturity Value
Amount(A) or Balance
It is an interest the is computed on the principal amount only.
Simple interest
It is an interest computed on the principal and also on the accumulated interest
Compound Interest
What formula is this?
Is = Prt
Simple Interest
What formula is this?
A = P + Pr = P(1+r)
Compound Interest
A = P(1 + rt)
Maturity Value of Simple Interest
A = P(1 + r)^t
Maturity Value of Compound Interest
True or False
Compound Interest is always Greater than simple Interest
True
Guven:
P= 72,500.00
r= 8%
t= 3 years
What is the simple interest and maturity value?
17,400.00 and 89,900.00
Given:
P= 540,500.00
r= 7%
t= 6 years
What is the compound Interest and Maturity Value?
270,644.76 and 811,144.76
It pertains to the interval for compounding
Compounding more than once a year period
Guven:
P=
A=
r= 12%
t= 5 years
Is= 20,000.00
What is the principal amount and the future Value?
33,333.33 and 53,333.33
P= A/(1 + r/k)^Kt
Derived Formula
Principal amount
Compound Amount - Principal =
Compound Interest
A = P(1 + r/k)^Kt
Compound Future Value
True or False
In Simple Interest we can use the triangle thing to easily remember the formula
(Yung I/PRT)
True
r/K is called the periodic rate
True or False
True
Interest based on a 360 day year
Ordinary Interest
Interest based on a 365-day year
Exact Interest
Lourdes wants to save money to
buy the school supplies for the
coming school year, so her sale
products online. Suppose she earn
₱2,500.00 and deposit it into an
account that earns simple interest of
3%. After 5 months, how much is her
money now?
Simple Interest Problem
After 5 months Lourdes has an amount of 2,531.25.00
a sequence of payments made at equal (fixed) intervals or periods of time
Annuity
the time between successive payments
Payment Interval
time between the first payment interval and last payment
interval
Term of an annuity, t
the amount of each payment
Regular or Periodic payment, R
sum of future values of all the payments to be made during the entire term of the annuity.
Amount (Future Value) of an annuity, F