CONSUMER

MATHEMATICS
“Wealth, in even the most improbable
cases, manages to convey the aspect of
intelligence.”
-John Kenneth Galbraith
 Consumer math is a branch of
math that uses basic math skills in real life
situations like shopping, calculating taxes,
estimating monthly budget, calculating
interest rate for a loan, etc. Teaching kids
about spending, saving and other aspects of
"money math" will prepare them to make
better financial decisions.
 Joel C. Junio
PSU-Bayambang
1. Find 8% of 500.
2. Find 5% of 12,000
3. Find 10% of 123,500
4. Find 5 ½% of 254,000
5. Find 0.2543% of 25,000
 When you first deposit money in a savings
account, your deposit is called principal.
 The bank takes the money and invests it.
 In return, the bank pays you INTEREST
based on the interest rate.
 Maturity value is the sum of the principal
and the interest.
 SIMPLE INTEREST is interest paid only in the
PRINCIPAL.
 𝑰 = 𝑷𝒓𝒕
Where:
I=interest
P=principal
r= the interest rate per year
T=the time in years
 For instance, you put P280,000 in a
bank which gives you 0.75% interest. If you
leave that money in the bank for the entire
year, (1)what will be the amount? (2)what will
be the amount after 90 days?
1. Suppose you deposit P14,000 in a savings
account. The interest rate is 5% per year.
a. Find the interest earned in 6 years.
b. Find the maturity value after 6 years
c. Given: Maturity Value=P20,000
Find the time of investment.
1. Principal: P12, 500
rate: 5 %
time: 6 months
2. Principal: P120,000
rate: 5 ¼%
time: 3 years
 Compound Interest is when the bank
pays interest on the Principal AND the
Interest already earned.
 The Balance is the Principal PLUS the
Interest.
 The Balance becomes the Principal on
which the bank figures the next
interest payment when doing
Compound Interest.
Ordinary Interest-360 days(Banker’s Rule)
Exact Interest- 365 days
 Take the Php280,000 you put into
your bank. If you do not touch it for a year and
the interest is compounded daily with interest
rate of 0.75%, what will be the amount of your
money?
1. Ms. Sue Ramirez issued a promisory note on
May 8, 2017 to BPI amounting to P100,000
with interest at 6%. The due date is October 8,
2017. Determine the maturity value to be paid?
It is a legal written statement issued by
a person who owes a certain amount
from another person or company. The
person who borrowed is bound to pay a
certain amount on specific date
You deposit P10,000 in an account
that earns 5% interest compounded
annually(once per year). What is the
balance in your account after 4
years?
 Principal @ Interest Balance at the
Beginning of (I=Prt) End of Each Year
Year
Year 1: P10,000
 You can find a balance using
compound interest in one step with
the compound interest formula.
 •An INTEREST PERIOD is the length of
time over which interest is calculated.
 The Interest Period can be a year or
less than a year.
 𝒓 𝒏𝒕
𝑨=𝑷 𝟏+
Where:
𝒏
A= Maturity Value
r= rate of interest
n=interest period
t=time
1. Find the balance on a deposit of
125,000 earning 6% interest
compounded
a. annually
b. semi-annually
c. quarterly
1. If P32,000 is invested for 9 months
at 5% simple interest, calculate:
a. the amount of simple interest
earned
b. the total amount at the end of
the term.
2. How long will it take to earn P1000 simple
interest, investing P85,000 at 4.25% ?
3. Kim has P18 000 to invest for 2 years. She
has the following options:
a. A term deposit at 4% compounded
semi-annually.
b. A term deposit at 2% for the first year
compounded semi-annually and 2% for the
second year compounded semi-annually.
Time deposit or certificate of deposit is a bank
product which is almost the same as a savings
account. With time deposit, the money will be
kept by the bank for a fixed period of time (30
days, 60 days, 90 days, or more) in exchange
for an interest rate higher than that to a
savings account.
 Assume that you opened a
Php100,000 time deposit account that earns
2% per annum. You let it stay there for 32
days. Considering the 20% withholding tax
charged to peso time deposits, what will be
the interest income?
 Leoj has Php500,000 and is
looking around for a bank where he can
leave his money for six months so it
can earn interest via time deposit. Help
him complete the table so he can
decide which bank to choose.
 Bank Interest Divisor Interest Interest
rate after 181 after
days taxes
Lejo Bank 2.25% /365

Joel Bank 2% /365

Jole Bank 1.625% /360

Eloj Bank 1.25% /360

Olej Bank 0.5% /360