WEEK 1 R Converting percent to decimal

CORE SUBJECT TITLE: SIMPLE AND COMPOUND INTEREST u To convert a percent to decimal, drop the percept sign and
l move the decimal point two places to the left.
CONTENT STANDARD: The learner demonstrates understanding of key e
concepts of simple and compound interests.
PERFORMANCE STANDARD: The learner investigate, analyze and solve
problems involving simple and compound Definition
interests using appropriate business and
financial instruments. Simple Interest – is calculated only on the original principal amount and
LEARNING COMPETENCY: The learner is able to illustrate simple and is paid at the end of the loan period.
compound interests; to distinguish between Interest – is the fee or rent that lenders charge to borrowers for the
simple and compound interests; computes temporary use of the borrowed money.
interest, maturity value, future value, and Principal – the amount borrowed
present value in simple interest and Rate Interest – is the percentage of the principal that will be charged for
compound interest environment; and solves specified period of time (e.g. daily, weekly, monthly,
problems involving simple and compound yearly, and etc.).
interests.

Lesson 1: Simple Interest

Formula
Introduction (1) 𝑰 = 𝑷𝒓𝒕
𝑰 𝑰 𝑰
(a) 𝑷 = 𝒓𝒕 (b) 𝒓 = 𝑷𝒕 (c) 𝒕 = 𝑷𝒓
Money is borrowed and loaned almost every day in thousands of
transactions totaling hundreds of millions of pesos. Two sides of the same Where I= interest, P = Principal, r = rate of interest, and
deal are borrowing and lending. t = time or term in years or fraction of a year

To find maturity value, simply add interest to the principal

Formula

Maturity Value or (Amount or Balance)

𝑨 =𝑷+𝑰 or 𝑨 = 𝑷 + 𝑷𝒓𝒕 or 𝑨 = 𝑷(𝑰 + 𝒓𝒕)

A = Maturity Value P= Principal I= Interest

1
 Example 2
The principal P of a loan is also called the face value or the present value
of the loan. To buy the school supplies for the coming school year, you get a summer
job at resort. Suppose you save ₱ 4 200.00 of your salary and deposit it into
an account that earns simple interest. After 9 months, the balance
is ₱ 4 263.00. What is the annual interest rate?
Example 1

Teresa borrowed ₱ 120 000.00 from her uncle. If Teresa agreed to pay an
Solution 1:
8% annual interest rate, calculate the amount of interest she must pay if the
loan period is (a) 1 year, (b) 9 months, and (c) 18 months.

Given: 𝑃 = ₱ 4 200.00 𝑰
𝒓=
9 3 𝑷𝒕
Solution: 𝑡 = 9 𝑚𝑜𝑛𝑡ℎ𝑠 𝑜𝑟 𝑜𝑟 𝑦𝑒𝑎𝑟 63
12 4
𝐼 = ₱ 4 263.00 − ₱ 4 200.00 =( 3 )
(4 200)(4)
= ₱ 63.00 = 0.02 or 2%
a. Given: 𝑃 = ₱ 120 000.00 b. Given: 𝑃 = ₱ 120 000.00
𝑟 = 8% 𝑜𝑟 0.08 𝑟 = 8% 𝑜𝑟 0.08
𝑡 = 1 𝑦𝑒𝑎𝑟 9
𝑡 = 9 𝑚𝑜𝑛𝑡ℎ𝑠 𝑜𝑟 𝑦𝑒𝑎𝑟
12
𝑰 = 𝑷𝒓𝒕
𝑰 = 𝑷𝒓𝒕 9
= (120 000)(0.08)(1) = (120 000)(0.08) ( ) Solution 2:
12
= 9 600 = 7 200 Solve for 𝑟 after substituting values for 𝐴, 𝑃,
Given: 𝐴 = ₱ 4 263.00 and 𝑡.
𝑃 = ₱ 4 200.00
3 𝑨 = 𝑷(𝑰 + 𝒓𝒕)
c. Given: 𝑃 = ₱ 120 000.00 𝑰 = 𝑷𝒓𝒕 𝑡 = 𝑦𝑒𝑎𝑟 Apply Distributive Property
4 3
𝑟 = 8% 𝑜𝑟 0.08 18
= (120 000)(0.08) ( ) 4 263 = 4 200 [1 + 𝑟 ( )] Subtract 4 200 from each
12 4
𝑡 = 18 𝑚𝑜𝑛𝑡ℎ𝑠 4 263 = 4 200 + 3 150r side.
18 = 14 400
𝑜𝑟 𝑦𝑒𝑎𝑟 63 = 3 150r Divide each side by 3 150.
12

0.02 = r

2
Example 3 Example 4

If ₱ 10 000.00 in invested at 4.5 % simple interest. How long will it take to Find the maturity value of the following loan amounts:
grow to ₱ 11 800.00? a. ₱ 50 000 borrowed at 9% for 2 years.
b. ₱ 120 000 borrowed at 10% for 8 months.

Solution 1: Solution:
a. Given: 𝑃 = ₱ 50 000 b. Given: 𝑃 = ₱ 120 000
Given: 𝑃 = ₱ 10 000.00 𝑰 𝑟 = 9% or 0.09 𝑟 = 10% or 0.1
𝒕=
𝑷𝒕
𝑟 = 4.5% 𝑜𝑟 0.045 1 800 𝑡 = 2 𝑦𝑒𝑎𝑟𝑠 𝑡 = 8 𝑚𝑜𝑛𝑡ℎ𝑠
𝐼 = ₱ 11 800.00 − ₱ 10 000.00 =( ) 8 2
(10 000)(0.045) 𝑜𝑟 𝑦𝑒𝑎𝑟𝑠 𝑜𝑟 𝑦𝑒𝑎𝑟𝑠
12 3
= ₱ 1 800.00 =4 It will take 4 years
𝑨 = 𝑷(𝑰 + 𝒓𝒕)
𝑨 = 𝑷(𝑰 + 𝒓𝒕)
= 50 000[1 + 2
(0.09)(2)] = 120 000 [1 + (0.1) ( )]
3
= 50 000(1.18) = ₱ 128 000.00
= ₱ 59 000
Solution 2:
Given: 𝐴 = ₱ 11 800.00 Solve for 𝑡 after substituting values for 𝐴, 𝑃,
𝑃 = ₱ 10 000.00 and 𝑟.
𝑟 = 0.045
𝐴 = 𝑃(𝐼 + 𝑟𝑡) Example 5
11 800 = 10 000 (1 + 0.045t)
11 800 = 10 000 + 450t Apply Distributive Property Find the present value of ₱ 86 000.00 at 8% simple interest for 3 years.
1 800 = 450t Subtract 10 000 from each side.
4= t Divide each side by 450. Solution:

Given: = ₱ 86 000.00 𝐴
𝑃=
𝑟 = 8% or 0.08 1 + 𝑟𝑡
86 000
=
1+0.08(3)
𝑡 = 3 𝑦𝑒𝑎𝑟𝑠
= ₱ 69 354.84

3
 Definition

Ordinary Interest or Banker’s Interest – interest based on a 360-day Lesson 2: Compound Interest
year.
Exact Interest – interest based on a 365-day year. Introduction

Is interest due at the end of a certain period is added to the principal and
that sum earns interest for the next period.

Example 6 Formula

You get a 180-day ₱ 200 000.00 loan from a bank at a 10.5% interest. Maturity Value or (Amount or Balance)
Calculate interest using (a) 360-day and (b) 365-day year.
𝑨 =𝑷+𝑰 or 𝑨 = 𝑷 + 𝑷𝒓𝒕 or 𝑨 = 𝑷(𝑰 + 𝒓𝒕)

A = Maturity Value P= Principal I= Interest

Solution
a. 360-day year: b. 365-day year:

Given: 𝑃 = ₱ 200 000.00 Given: 𝑃 = ₱ 200 000.00

𝑟 = 10.5% 𝑟 = 10.5%
180 1 180 1 Formula
𝑡= 𝑜𝑟 𝑡= 𝑜𝑟
360 2 365 2 Future Value of Compound Period:

𝒓 𝑲𝒕 𝒓
𝑰 = 𝑷𝒓𝒕 𝐼 = 𝑃𝑟𝑡 𝑨 = 𝑷 (𝟏 + ) , where is called periodic rate.
𝑲 𝑲
1 180
= 200 000 (0.105) ( ) = 200 000 (0.105) ( )
2 365
= ₱ 10 500.00 = ₱ 10 365.16

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 Example 1 Example 2

If ₱ 320 000.00 is invested for 5 years at 8% compounded quarterly, find What amount must be invested in order to have ₱ 128 376.52 after 8 years
(a) the compound amount and (b) the compound interest. if money is worth 6% compounded semi-annually?

Solution: Solution:
We need to find the principal P, knowing that the compound amount is
a. Given: 𝑃 = ₱ 320 000.00 b. 𝐶𝑜𝑚𝑝𝑜𝑢𝑛𝑑 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡
Given: 𝐴 = ₱ 128 376.52 𝑟 𝐾𝑡
𝑟 = 8% or 0.08 𝐴 = 𝑃 (1 + )
𝐾=4 = 𝐶𝑜𝑚𝑝𝑜𝑢𝑛𝑑 𝐴𝑚𝑜𝑢𝑛𝑡 − 𝑟 = 6% or 0.06 𝐾
𝐴
𝑡=5 𝑃𝑟𝑖𝑛𝑐𝑖𝑝𝑎𝑙 𝐾=2 𝑃= 𝑟 𝐾𝑡
(1+𝐾)
𝒓 𝑲𝒕 = ₱ 475 503.17 − ₱ 320 000.00 𝑡 = 8 years
𝑨 = 𝑷 (𝟏 + ) P =?
𝑲 = ₱ 155 503.17 128 376.52
0.08 4(5) = 0.06 2(8)
= 320 000 (1 + ) (1+ )
4 2
= 320 800.00 (1 + 0.02)4(5)
= 320 800.00 (1.02)20 =
128 376.52
(1.03)16
= ₱ 475 503.17
= 80 000.003 𝑜𝑟 ₱ 80 000.00

Formula

Present Value of Compound Period:

𝑨
𝑷= 𝒓 𝑲𝒕
(𝟏+𝑲)

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WEEK 2 Annuity Uncertain – annuity payable for an indefinite duration (example:
CORE SUBJECT TITLE: SIMPLE AND GENERAL ANNUITIES insurance); dependent on some certain events.

CONTENT STANDARD: The learner demonstrates understanding of key Simple annuity – interest conversion or compounding period is equal or
concepts of simple and general annuities. the same as the payment interval.
PERFORMANCE STANDARD: The learner investigate, analyze and solve
problems involving simple and general General annuity – interest conversion or compounding period is unequal
annuities using appropriate business and or not the same as the payment interval.
financial instruments.
LEARNING COMPETENCY: The learner is able to illustrate simple and Ordinary annuity (𝑨𝒐 ) annuity in which the periodic payment is made at
general annuities; distinguishes between the end of each payment interval.
simple and general annuities; finds the future
value and present value of both simple Annuity due – an annuity in which the periodic payment is made at the
annuities and general annuities; calculates beginning of each payment interval.
the fair market value of a cash flow stream
that includes an annuity; and calculates the Differed annuity – the periodic payment is not made at the beginning nor
present value and period of deferral of a at the end of each payment interval, but some later
deferred annuity. date.

General Ordinary Annuity – first payment is made at the end of every

payment interval
Lesson 1: Simple Annuity
General Annuity Date – first payment is made at the beginning of every
Introduction payment interval

A large number of personal and business transactions involved a series of Perpetuities – a series of periodic payments which are to run infinitely or
equal regular payments. forever.

Future Value of annuity – is the total accumulation of the payments and

interest earned
Definition
Present Value of annuity – is the principal that must be invested today
to provide the regular payments of an
Annuity – affixed of money paid to someone at regular intervals, subject annuity.
to fixed compound interest rate.

Annuity Certain – payable for a definite duration. Begins and ends on a

definite or fixed date (monthly payment of car loan)

6
Example 1
Determine if the given situations represent simple annuity or general Lesson 2: Simple Ordinary Annuity
annuity.
a. Payment are made at the end of each month for a loan than charges Introduction
1.05% interest compounded quarterly.
Formula
b. A deposit of ₱ 5 500.00 was made at the end of every three months
to an account that earns 5.6% interest compounded quarterly. Future Value of Simple Ordinary Annuity

Solution: The future value FV of simple ordinary annuity is

(1+𝑖)𝑛 −1
a. Since the payment interval at the end of the month is not equal to 𝐹𝑉 = 𝑃 [ ]
𝑖
the compounding interval, quarterly, the situation represents a where 𝐹𝑉 = 𝐹𝑢𝑡𝑢𝑟𝑒 𝑉𝑎𝑙𝑢𝑒 𝑜𝑟 𝐴𝑚𝑜𝑢𝑛𝑡 𝑖𝑛
general annuity. 𝑃 = 𝑃𝑒𝑟𝑖𝑜𝑑𝑖𝑐 𝑃𝑎𝑦𝑚𝑒𝑛𝑡
𝑖 = 𝑖𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑟𝑎𝑡𝑒 𝑝𝑒𝑟 𝑝𝑒𝑟𝑖𝑜𝑑
b. Since the payment interval at the end of every three months (or
𝑟 → 𝑎𝑛𝑛𝑢𝑎𝑙 𝑟𝑎𝑡𝑒
quarterly) is equal to the compounding interval, quarterly, the where 𝑖 =
𝐾 → 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑐𝑜𝑛𝑣𝑒𝑟𝑠𝑖𝑜𝑛 𝑝𝑒𝑟𝑖𝑜𝑑𝑠 𝑖𝑛 𝑎 𝑦𝑒𝑎𝑟
situation represents a simple annuity.
𝑛 = 𝑡𝑜𝑡𝑎𝑙 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑐𝑜𝑛𝑣𝑒𝑟𝑠𝑖𝑜𝑛 𝑝𝑒𝑟𝑖𝑜𝑑𝑠
𝑛 = 𝑡(𝐾) 𝑤ℎ𝑒𝑟𝑒 𝑡 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑦𝑒𝑎𝑟𝑠

Example 2
Determine whether the situation describes an ordinary annuity or an annuity Present Value of Simple Ordinary Annuity
due.
The present value PV of simple ordinary annuity is
a. Jun’s monthly mortgage payment is ₱ 35 148.05 at the end of each
month. 𝑃[1 − (1 + 𝑖)−𝑛 ]
𝑃𝑉 =
𝑖
b. The rent for the apartment is ₱ 7 000.00 and due at the beginning of Where 𝑃𝑉 = 𝑃𝑟𝑒𝑠𝑒𝑛𝑡 𝑉𝑎𝑙𝑢𝑒 𝑜𝑟 𝐴𝑚𝑚𝑜𝑢𝑛𝑡
each month. 𝑃 = 𝑃𝑒𝑟𝑖𝑜𝑑𝑖𝑐 𝑃𝑎𝑦𝑚𝑒𝑛𝑡
𝑖 = 𝑖𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑟𝑎𝑡𝑒 𝑝𝑒𝑟 𝑝𝑒𝑟𝑖𝑜𝑑
Solution: 𝑟 → 𝑎𝑛𝑛𝑢𝑎𝑙 𝑟𝑎𝑡𝑒
where 𝑖 =
𝐾 → 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑐𝑜𝑛𝑣𝑒𝑟𝑠𝑖𝑜𝑛 𝑝𝑒𝑟𝑖𝑜𝑑𝑠 𝑖𝑛 𝑎 𝑦𝑒𝑎𝑟
a. Because the payments are made at the end of each month, Jun’s
stream of monthly mortgage payments is an ordinary annuity. 𝑛 = 𝑡𝑜𝑡𝑎𝑙 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑐𝑜𝑛𝑣𝑒𝑟𝑠𝑖𝑜𝑛 𝑝𝑒𝑟𝑖𝑜𝑑𝑠
𝑛 = 𝑡(𝐾)𝑤ℎ𝑒𝑟𝑒 𝑡 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑦𝑒𝑎𝑟𝑠
b. Since the payments come at the beginning of each month, the
stream of rental payments is an annuity due
7
Example 1 Future Value of Simple Ordinary Annuity Example 3 Present Value of Simple Ordinary Annuity

If you pay ₱ 50.00 at the end of each month for 40 years on account that Rose works very hard because she wants to have enough money in her
pays interests at 10% compounded monthly, how much money do you have retirement account when she reaches the age 60. She wants to withdraw
after 40 years? ₱ 36 000.00 every 3 months for 20 years starting 3 months after she retires.
How much must Rose deposit at retirement at 12% per year compounded
Solution: quarterly for the annuity?
(1+𝑖)𝑛 −1
𝐹𝑉 = 𝑃 [ ]
Given 𝑃 = ₱ 50.00 𝑖
0.1 480
𝑟 10% 0.1 (1+ 12 ) −1 Solution:
𝑖= = = = 50 [ ]
𝐾 12 12 0.1
𝑛 = 𝑡(𝐾) = 40(12) = 480 12
The principal that Rose must deposit at retirement is the present value of
𝐹𝑉 =? = ₱ 316 203.98
the annuity payments.

Example 2 Future Value of Simple Ordinary Annuity

Given: 𝑃[1 − (1 + 𝑖)−𝑛 ]
Alex and Tony are twins. After graduation and being finally able to get a 𝑃 = ₱36 000.00 𝑃𝑉 =
𝑖
good job, they plan for retirement as follows. 𝑟 12
i = = % or
𝐾 4
 Starting at age 24, Alex deposit ₱ 10 000.00 at the end of each year for 36 years. 36 000[1 − (1 + 0.03)−80 ]
0.03 𝑃𝑉 =
 Starting at age 42, Tony deposit ₱ 20 000.00 at the end of each year for 18 𝑛 = 𝑡 ∙ 𝐾 = 20(4) = 0.03
years. 80 = ₱ 1 087 227.48

Who will have the greater amount at retirement if both annuities earn 12% per year
compounded annually?

Solution:

For Alex’s plan For Tony’s plan

Given: 𝑃 = ₱ 10 000.00 Given: 𝑃 = ₱ 20 000.00
𝑟 12% 𝑟 12%
𝑖= = = 0.12 𝑖= = = 0.12
𝐾 1 𝐾 1
𝑛 = 𝑡(𝐾) = 36(1) = 36 𝑛 = 𝑡(𝐾) = 18(1) = 18
𝐹𝑉 =? 𝐹𝑉 =?
(1 + 𝑖)𝑛 − 1 𝐹𝑉 = 𝑃
(1+𝑖)𝑛 −1
𝐹𝑉 = 𝑃 𝑖
𝑖 (1+0.12)18 −1
(1 + 0.12)36 − 1 = 20 000
0.12
= 10 000
0.12 = ₱ 1 114 994.30
= ₱ 4 844 631.16

8
 Lesson 3: Simple Annuity Due Example 1 Future Value of Simple Annuity Due

Introduction Suppose Mr. and Mrs. Mariano deposited ₱ 20 000.00 at the beginning of
each year for 5 years in an investment that earns 10% per year compounded
Formula annually, what is the amount or future value of the annuity?

Future Value of Simple Annuity Due Solution:

(1+𝑖)𝑛 −1
The future value FV of simple ordinary annuity is 𝐹𝑉 = 𝑃 [ ] (1 + 𝑖)
Given 𝑃 = ₱ 20 000.00 𝑖
(1+𝑖)𝑛 −1 𝑟 10% (1+0.1)5 −1
𝐹𝑉 = 𝑃 [ ] (1 + 𝑖) 𝑖 = 𝐾 = 1 𝑜𝑟 0.1 = 20 000 [ ] (1 + 0.1)
𝑖 0.1
𝑛 = 𝑡 (𝐾 ) = 5 (1) = 5 = ₱ 134 312.20
where 𝐹𝑉 = 𝐹𝑢𝑡𝑢𝑟𝑒 𝑉𝑎𝑙𝑢𝑒 𝑜𝑟 𝐴𝑚𝑜𝑢𝑛𝑡 𝑖𝑛
𝑃 = 𝑃𝑒𝑟𝑖𝑜𝑑𝑖𝑐 𝑃𝑎𝑦𝑚𝑒𝑛𝑡
𝑖 = 𝑖𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑟𝑎𝑡𝑒 𝑝𝑒𝑟 𝑝𝑒𝑟𝑖𝑜𝑑,
𝑟 → 𝑎𝑛𝑛𝑢𝑎𝑙 𝑟𝑎𝑡𝑒
where 𝑖 = Example 2 Present Value of Simple Annuity Due
𝐾 → 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑐𝑜𝑛𝑣𝑒𝑟𝑠𝑖𝑜𝑛 𝑝𝑒𝑟𝑖𝑜𝑑𝑠 𝑖𝑛 𝑎 𝑦𝑒𝑎𝑟
𝑛 = 𝑡𝑜𝑡𝑎𝑙 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑐𝑜𝑛𝑣𝑒𝑟𝑠𝑖𝑜𝑛 𝑝𝑒𝑟𝑖𝑜𝑑𝑠
Hope borrows money for the renovation of her house and repays by making
𝑛 = 𝑡(𝐾) 𝑤ℎ𝑒𝑟𝑒 𝑡 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑦𝑒𝑎𝑟𝑠
yearly payments of ₱ 50 000.00 at the beginning of each year for a period
of 10 years at an interest rate of 8% compounded annually. How much did
Present Value of Simple Annuity Due Hope borrow?

 Starting at age 24, Alex deposit ₱ 10 000.00 at the end of each year
The present value PV of simple ordinary annuity is
𝑃[1 − (1 + 𝑖)−𝑛 ] for 36 years.
𝑃𝑉 = (1 + 𝑖)  Starting at age 42, Tony deposit ₱ 20 000.00 at the end of each year
𝑖
for 18 years.
Where 𝑃𝑉 = 𝑃𝑟𝑒𝑠𝑒𝑛𝑡 𝑉𝑎𝑙𝑢𝑒 𝑜𝑟 𝐴𝑚𝑚𝑜𝑢𝑛𝑡
Who will have the greater amount at retirement if both annuities earn 12%
𝑃 = 𝑃𝑒𝑟𝑖𝑜𝑑𝑖𝑐 𝑃𝑎𝑦𝑚𝑒𝑛𝑡
per year compounded annually?
𝑖 = 𝑖𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑟𝑎𝑡𝑒 𝑝𝑒𝑟 𝑝𝑒𝑟𝑖𝑜𝑑
𝑟 → 𝑎𝑛𝑛𝑢𝑎𝑙 𝑟𝑎𝑡𝑒
where 𝑖 = Solution:
𝐾 → 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑐𝑜𝑛𝑣𝑒𝑟𝑠𝑖𝑜𝑛 𝑝𝑒𝑟𝑖𝑜𝑑𝑠 𝑖𝑛 𝑎 𝑦𝑒𝑎𝑟
𝑛 = 𝑡𝑜𝑡𝑎𝑙 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑐𝑜𝑛𝑣𝑒𝑟𝑠𝑖𝑜𝑛 𝑝𝑒𝑟𝑖𝑜𝑑𝑠 Given 𝑃 = ₱ 50 000.00 𝑃[1−(1+𝑖)−𝑛 ]
𝑛 = 𝑡(𝐾) 𝑤ℎ𝑒𝑟𝑒 𝑡 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑦𝑒𝑎𝑟𝑠 𝑃𝑉 = (1 + 𝑖)
𝑟 8% 𝑖
𝑖= = 𝑜𝑟 0.08 50 000[1−(1+0.08)−10 ]
𝐾 1 = (1 + 0.08)
𝑛 = 𝑡(𝐾) = 10(1) = 0.08
10 = ₱ 362 344.40

9
 Example 1 Regular Payment of an Annuity
Lesson 4: Regular Payment of an Annuity
Mary borrows ₱ 500 000 to buy a car. She has two options to repay her
loan. The interest is compounded monthly.
Introduction
Option 1: 24 monthly payments every beginning of the month at 12%
Formula per year.
Regular Payment (P) of an Annuity Simple Ordinary Annuity Option 2: 60 monthly payments every end of the month at 15% per year.
Find:
(𝐹𝑉)𝑖
𝑃𝑉 = a. Mary’s monthly payments under each option
(1+𝑖)𝑛 −1
a. The interest Mary pays under each option
(𝑃𝑉)𝑖
𝑃𝑉 =
1−(1+𝑖)−𝑛

𝑃𝑉 = 𝑃𝑟𝑒𝑠𝑒𝑛𝑡 𝑉𝑎𝑙𝑢𝑒 Solution:

𝐹𝑉 = 𝐹𝑢𝑡𝑢𝑟𝑒 𝑉𝑎𝑙𝑢𝑒 a. For option 1 a. For option 2
𝑖 = 𝑖𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑟𝑎𝑡𝑒 𝑝𝑒𝑟 𝑝𝑒𝑟𝑖𝑜𝑑
𝑟 → 𝑎𝑛𝑛𝑢𝑎𝑙 𝑟𝑎𝑡𝑒 Given: 𝑃𝑉 = ₱ 500 000 Given: 𝑃𝑉 = ₱ 500 000
where 𝑖 = 𝑟 12% 𝑟 15%
𝐾 → 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑐𝑜𝑛𝑣𝑒𝑟𝑠𝑖𝑜𝑛 𝑝𝑒𝑟𝑖𝑜𝑑𝑠 𝑖𝑛 𝑎 𝑦𝑒𝑎𝑟 𝑖= = 𝑜𝑟 0.01 𝑖= = 𝑜𝑟 0.0125
𝑛 = 𝑡𝑜𝑡𝑎𝑙 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑐𝑜𝑛𝑣𝑒𝑟𝑠𝑖𝑜𝑛 𝑝𝑒𝑟𝑖𝑜𝑑𝑠 𝐾 12 𝐾 12
𝑛 = 𝑡(𝐾) 𝑤ℎ𝑒𝑟𝑒 𝑡 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑦𝑒𝑎𝑟𝑠 𝑛 = 24 𝑛 = 60
𝑃 =? 𝑃 =?
Regular Payment (P) of an Annuity Simple Annuity Due ((Simple Ordinary Annuity)))
(𝑃𝑉)𝑖 ((Simple Annuity (𝑃𝑉)𝑖
𝑃= 𝑃𝑉 =
(𝐹𝑉)𝑖 [1−(1+𝑖)−𝑛 ](1+𝑖) 1−(1+𝑖)−𝑛
Due Formula)))
𝑃=
[(1+𝑖)𝑛 −1](1+𝑖)
(500 000)(0.0125)
(500 000)(0.01) =
𝑃=
(𝑃𝑉)𝑖
= 1 − (1 + 0.0125)−60
[1−(1+𝑖)−𝑛 ](1+𝑖) [1 − (1 + 0.01)−24 ](1 + 0.01)
6 250
𝑃𝑉 = 𝑃𝑟𝑒𝑠𝑒𝑛𝑡 𝑉𝑎𝑙𝑢𝑒 5 000) =
= 0.5254323974
𝐹𝑉 = 𝐹𝑢𝑡𝑢𝑟𝑒 𝑉𝑎𝑙𝑢𝑒 0.214558211
𝑖 = 𝑖𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑟𝑎𝑡𝑒 𝑝𝑒𝑟 𝑝𝑒𝑟𝑖𝑜𝑑 = ₱ 11 894.97
𝑟 → 𝑎𝑛𝑛𝑢𝑎𝑙 𝑟𝑎𝑡𝑒
where 𝑖 = = ₱ 23 303.70
𝐾 → 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑐𝑜𝑛𝑣𝑒𝑟𝑠𝑖𝑜𝑛 𝑝𝑒𝑟𝑖𝑜𝑑𝑠 𝑖𝑛 𝑎 𝑦𝑒𝑎𝑟
𝑛 = 𝑡𝑜𝑡𝑎𝑙 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑐𝑜𝑛𝑣𝑒𝑟𝑠𝑖𝑜𝑛 𝑝𝑒𝑟𝑖𝑜𝑑𝑠
𝑛 = 𝑡(𝐾)𝑤ℎ𝑒𝑟𝑒 𝑡 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑦𝑒𝑎𝑟𝑠

10
 Future Value of Deferred Annuity
b. The interest paid is the difference between the total amount paid and (1 + 𝑖)𝑛 − 1
𝐹𝑉 = 𝑃 [ ]
the principal borrowed. 𝑖
where 𝐹𝑉 = 𝑃𝑟𝑒𝑠𝑒𝑛𝑡 𝑉𝑎𝑙𝑢𝑒
For Option 1: 𝑃 = 𝑅𝑒𝑔𝑢𝑙𝑎𝑟 𝑃𝑎𝑦𝑚𝑒𝑛𝑡
24 payments of ₱ 23 303.70: 24 × 23 303.70 = ₱ 559 288.80 𝑖 = 𝑟𝑎𝑡𝑒 𝑝𝑒𝑟 𝑐𝑜𝑛𝑣𝑒𝑟𝑠𝑖𝑜𝑛 𝑝𝑒𝑟𝑖𝑜𝑑
The total interest paid is ₱ 559 288.80 − ₱ 500 000 = 𝑟 → 𝑎𝑛𝑛𝑢𝑎𝑙 𝑟𝑎𝑡𝑒
₱ 59 288.80 where 𝑖 =
𝐾 → 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑐𝑜𝑛𝑣𝑒𝑟𝑠𝑖𝑜𝑛 𝑝𝑒𝑟𝑖𝑜𝑑𝑠
Thus, the total interest paid is ₱ 59 288.80
𝑛 = 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑝𝑎𝑦𝑖𝑛𝑔 𝑝𝑒𝑟𝑖𝑜𝑑𝑠
For option 2 𝑛 = 𝑡(𝐾) where t is the number of years
𝑑 = 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑑𝑒𝑓𝑒𝑟𝑟𝑒𝑑 𝑝𝑒𝑟𝑖𝑜𝑑
60 payments of ₱ 11 894.97: 60 × 11 894.97 = ₱ 713 698.20
The total interest paid is ₱ 𝟕𝟏𝟑 𝟔𝟗𝟖.

Example 1
Lesson 5: Deferred Annuity

Introduction Find the present value of a deferred annuity of ₱ 1 500 every 3 months for 8
years that is deferred 3 years if money is worth 6% converted or
It is an annuity in which the first payment is not made at the beginning nor compounded quarterly.
at the end of the payment interval but at a later date.
Solution:
Formula
Present Value of Deferred Annuity Given: 𝑃 = ₱ 1 500.00 t = 8 years
1 − (1 + 𝑖)−(𝑛+𝑑) 1 − (1 + 𝑖)−𝑑 r = 6% 𝑛 = 8(4) = 32
𝑃𝑉 = 𝑃 [ − ] K=4 𝑑 = 3(4) = 12
𝑖 𝑖 6%
where 𝑃𝑉 = 𝑃𝑟𝑒𝑠𝑒𝑛𝑡 𝑉𝑎𝑙𝑢𝑒 𝑖= = 0.0015
4
𝑃 = 𝑅𝑒𝑔𝑢𝑙𝑎𝑟 𝑃𝑎𝑦𝑚𝑒𝑛𝑡
𝑖 = 𝑟𝑎𝑡𝑒 𝑝𝑒𝑟 𝑐𝑜𝑛𝑣𝑒𝑟𝑠𝑖𝑜𝑛 𝑝𝑒𝑟𝑖𝑜𝑑 1−(1+𝑖)−(𝑛+𝑑) 1−(1+𝑖)−𝑑
𝑃𝑉 = 𝑃 [ − ]
𝑖 𝑖
𝑟 → 𝑎𝑛𝑛𝑢𝑎𝑙 𝑟𝑎𝑡𝑒 1−(1+0.015)−(32+12) 1−(1+0.015)−12
where 𝑖 = = 1 500 [ − ]
𝐾 → 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑐𝑜𝑛𝑣𝑒𝑟𝑠𝑖𝑜𝑛 𝑝𝑒𝑟𝑖𝑜𝑑𝑠 0.015 0.015
𝑛 = 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑝𝑎𝑦𝑖𝑛𝑔 𝑝𝑒𝑟𝑖𝑜𝑑𝑠 = ₱ 31 699.68
𝑛 = 𝑡(𝐾) where t is the number of years
𝑑 = 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑑𝑒𝑓𝑒𝑟𝑟𝑒𝑑 𝑝𝑒𝑟𝑖𝑜𝑑

11
 STOCKS BONDS
WEEK 3 A method of funding or raising A method of funding debt, or
CORE SUBJECT TITLE: STOCKS AND BONDS money for equity by enabling raising money through investor
investors to be part of the borrowing.
CONTENT STANDARD: The learner demonstrates understanding of basic company's owners.
concepts of stocks and bonds.
PERFORMANCE STANDARD: The learner is able to use appropriate Per day, stock prices differ. These Interest payments and a return of
financial instruments involving stocks rates are recorded in different their capital are promised to
and bonds in formulating conclusions media (newspapers, television, investors at the maturity date.
and making decisions. internet, etc.).
LEARNING COMPETENCY: The learner is able to illustrate stocks and
bonds; distinguishes between stocks and Investors can earn if stock prices Investors still need the credit
bonds; describes the different markets for rise, but if stock prices drop or rating of the borrower to be
stocks and bonds; and analyzes the different worse if the company goes considered. Government bonds
market indices for stocks and bonds. bankrupt, they can lose money. pose less risk than companies
because the government has
guaranteed funding (taxes) from
Lesson 1: Stocks and Bonds which it can pay its loans. Bonds
issued by the government pose
less risk.
Introduction
Bonds are security-bearing interest that as specified in the bond Higher risk but with possibility of Lower risk but lower yield.
certificate, promises to pay the sum of money at a certain maturity date. higher returns
Bondholders are lenders to an entity that may be a government or private
corporation, unlike stockholders. The national government, government If the investment is for the long It could be suitable for pensioners
departments, government owned and operated companies, non-bank term (10 years or more), it may be (because of the guaranteed fixed
suitable. This will allow investors income) or for those who need the
corporations, banks and multilateral agencies are some of the bond
to wait until stock prices rise if they money in the near future (because
issuers.
ever go down. they are unable to afford a stock
Bondholders do not vote at the annual meeting of the institution, but are market opportunity).
the first to demand the earnings of the institution. The bondholders will
earn the face value of the bond upon the maturity date. The bondholders
may collect coupons (payments/interests), usually done semi-annually,
aside from the face sum due on the maturity date, depending on the
coupon rate specified in the bond certificate.

12
 Definition
Example 1
 Stocks – share of a firm's ownership
 Dividend – to share in the benefit of the company Determine the amount of the semi-annual coupon for a bond with a face
 Dividend Per Share – Dividend ratio to the number of shares value of ₱ 300,000 that pays 10%, payable semi-annually for its coupons.
 The stock market – a place where it is possible to purchase or sell
stocks. In the Philippines, the stock market is regulated by the Solution:
Philippine Stock Exchange (PSE).
 Market value – a stock's present price at which it can be sold Given: Face Value F = 300,000
 Stock Yield Ratio – the annual dividend per share ratio and the per Coupon rate r = 10%
share market value. Present stock yield, also called.
 Par Value – as stated on the company certificate, the sum per Find: Amount of the semi-annual coupon
share. It is determined by the corporation, unlike market valuation,
and remains constant over time. Annual coupon amount: 300 000 (0.10) = 30 000.
1
30,000 ( ) = 15,000
Definition of Terms in Relation to Bonds 2

Semi-annual coupon amount:

 Bond – interest-bearing security which promises to pay
(1) a stated amount of money on the maturity date, and Thus, the amount of the semi-annual coupon is ₱ 15,000.
(2) regular interest payments called coupons.
 Coupon –periodic interest payment that the bondholder receives Note:
during the time between purchase date and maturity date; usually The coupon rate is used only for computing the coupon amount, usually
received semi-annually. paid semi-annually. It is not the rate at which money grows. Instead
 Coupon Rate –the rate per coupon payment period; denoted by r current market conditions are reflected by the market rate, and is used to
 Price of a Bond –the price of the bond at purchase time; denoted compute the present value of future payments.
by P
 Par Value or Face Value - the amount payable on the maturity
date; denoted by F.
If P = F, the bond is purchased at par.
If P < F, the bond is purchased at a discount.
If P > F, the bond is purchased at premium.

 Term of a Bond – fixed period of time (in years) at which the bond
is redeemable as stated in the bond certificate; number of years
from time of purchase to maturity date.
 Fair Price of a Bond –present value of all cash inflows to the
bondholder.

13
 Stock Tables Various information about stock prices can be reported. The
following table shows how information about stocks can be presented
Lesson 2: Market Indices Stocks and Bonds (values are hypothetical).

52WK 52WK
Introduction
HI LO STOCK HI LO DIV VOL(100s) CLOSE NETCHG
A stock market index is a measure of a portion of the stock market 94 44 AAA 60 35.5 .70 2050 57.29 0.10
88 25 BBB 45 32.7 .28 10700 45.70 – 0.2

Stock Index Tables

Stock indices are reported in the business section of magazines or  52-WK HI/LO – highest/ lowest selling price of the stock in the past
newspapers, as well as online 52 weeks
(http://www.pse.com.ph/stockMarket/home.html). The following table
shows how a list of index values is typically presented (values are  HI/LO – highest/ lowest selling price of the stock in the last trading
hypothetical). day

Index Val Chg %Chg  STOCK – three-letter symbol the company is using for trading

PSEI 7,523.93 - 14.20 - 0.19  DIV – dividend per share last year

Financials 4,037.83 6.58 0.16  VOL (100s) – number of shares (in hundreds) traded in the last
trading day. In this case, stock AAA sold 2,050 shares of 100 which
Holding Firms 6,513.37 2.42 0.037 is equal to 205,000 shares.

Industrial 11,741.55 125.08 1.07  CLOSE- closing price on the last trading day.

Property 2,973.52 - 9.85 - 0.33  NETCHG- net change between the two last trading days. In the case
of AAA, the net change is 0.10. The closing price the day before the
Services 1,622.64 - 16.27 - 1.00 last trading day is ₱ 57.29 – ₱ 0.10 = ₱ 57.19.

Mining and Oil 11,914.73 28.91 0.24

Buying or Selling Stocks To buy or sell stocks, one may go to the PSE
personally. However, most transactions nowadays are done by making a
 Val – value of the index phone call to a registered broker or by logging on to a reputable online
 Chg – change of the index value from the previous trading day trading platform. Those with accounts in online trading platforms may often
(i.e., value today minus value yesterday) encounter a table such as the following.
 %Chg – ratio of Chg to Val (i.e., Chg divided by Val)

14
 Lesson 3: Bond Market Indices

Introduction

A bond market index is a measure of a portion of the bond market.

In the table, the terms mean the following: Example 2

 Bid Size – the number of individual buy orders and the total Consider the following listing on stocks and answer the questions that
number of shares they wish to buy. follow:
 Bid Price – the price these buyers are willing to pay for the stock

 Ask Price – the price the sellers of the stock are willing to sell the
stock

 Ask Size – how many individual sell orders have been placed in
the online platform and the total number of shares these sellers
wish to sell. For Stocks GGG and HHH:

Example, the first row under Bid means that there are a total of 122 traders 1. What was the lowest price of the stock for the last 52 weeks?
who wish to buy a total of 354,100 shares at ₱ 21.60 per share. On the other 2. What was the dividend per share last year?
hand, the first row under Ask means that just one trader is willing to sell 3. What was the annual percentage yield last year?
his/her 20,000 shares at a price of ₱ 21.80 per share. 4. What was the closing price in the last trading day?
5. What was the closing price the day before the last trading day?

Solution:

For Stock GGG:

1. Lowest Price = ₱ 105.00
2. Dividend per Share =₱ 3.50
3. YLD% = 2.8%
4. Closing Price = ₱ 118.50
5. Closing Price (the day before the last trading day)
= ₱ 118.50 + ₱ 0.50 = ₱ 119.00

15
 For Stock HHH: 2. Open-ended and Closed-ended Loans
1. Lowest Price = ₱ 12.00
2. Dividend per Share = ₱ 0.90 (a) An Open-ended Loan – is a loan that can be borrowed and over
3. YLD% = 1.1% and over. Credit and lines of credit are common typed of open-
4. Closing Price = ₱ 15.80 ended loans. These loans have a credit limit and each time a
5. Closing Price (the day before the last trading day) borrower make a purchase, the available credit decreases.
= ₱ 15.80 - ₱ 0.10 = ₱ 15.70 (b) Closed—ended Loan – is a type of loan that cannot be borrowed
once they’ve been repaid.
WEEK 4
CORE SUBJECT TITLE: BUSINESS AND CONSUMER LOANS 3. Mortgage – is a very common type of debt instrument, used by many
individuals to purchase housing.
CONTENT STANDARD: The learner demonstrates understanding of basic
concepts of business and consumer loans. 4. Student Loan – is a loan provided to students to help defray the
PERFORMANCE STANDARD: The learner is able to decide wisely on the costs of college education.
appropriateness of business or consumer
loan and its proper utilization. 5. Personal Loan – is a loan granted to an individual and it is also
LEARNING COMPETENCY: The learner is able to illustrate business and called signature loan.
consumer loans; distinguishes between
business and consumer loans; and solves 6. Demand Loan – is an unconventional loan unusual for a very short
problems involving business and consumer time, typically less than 180 days.
loans (amortization, mortgage).

Business Loan Consumer Loan

Lesson 1: Basic Concepts on Business and 1. Collateral real state, equipment, furniture, real state
Consumer Loans fixtures, inventory, or personal
assets of the business owners
Introduction 2. Guarantor the business owners have to does not require a
sign the loan as guarantors guarantor
Differences between Business Loan and Consumer Loan 3. Documentation requires credit report, tax requires a credit
returns, and the last three report or tax returns
A. Types of Loans years of financial statements
4. Terms shorter and includes a higher longer than the
1. Secure and Unsecured Loans interest rate business loan
5. Follow-up annual reviews of the no further follow-up
relationship are often once the loan is
(a) Secure Loan – the borrower pledged dome assets, like card or
conducted released
property as collateral.
(b) Is a monetary loan that is not secured against the borrower’s
assets.

16
B. Five C’s of Credit
(2) Compute for the total installment cost, we get
Credit Score – is a measure of factory that may affect the borrower’s
ability to repay credit. 𝑇𝑜𝑡𝑎𝑙 𝐼𝑛𝑠𝑡𝑎𝑙𝑙𝑚𝑒𝑛𝑡 𝐶𝑜𝑠𝑡
= 𝐷𝑜𝑤𝑛 𝑃𝑎𝑦𝑚𝑒𝑛𝑡 + (𝑚𝑜𝑛𝑡ℎ𝑙𝑦 𝑃𝑎𝑦𝑚𝑒𝑛𝑡 𝑥 𝑁𝑜. 𝑜𝑓 𝑃𝑎𝑦𝑚𝑒𝑛𝑡𝑠)
1. Character – is based from the borrower’s credit history, the ledger 𝑇𝑜𝑡𝑎𝑙 𝐼𝑛𝑠𝑡𝑎𝑙𝑙𝑚𝑒𝑛𝑡 𝐶𝑜𝑠𝑡 = 150,000 + (17,500 𝑥 48)
attempts to determine if he/she possess the honesty and reliability 𝑇𝑜𝑡𝑎𝑙 𝐼𝑛𝑠𝑡𝑎𝑙𝑙𝑚𝑒𝑛𝑡 𝐶𝑜𝑠𝑡 = 150,000 + 840,00
to repay the debt which includes past payment experience, review a 𝑇𝑜𝑡𝑎𝑙 𝐼𝑛𝑠𝑡𝑎𝑙𝑙𝑚𝑒𝑛𝑡 𝐶𝑜𝑠𝑡 = ₱ 990, 00
credit bureau report.

2. Capacity – refers to the borrower’s ability to repay the debt.

(3) Compute the finance charge, we get
3. Capital – determine by the lender if the borrower has any valuable
asset. 𝐹𝑖𝑛𝑎𝑛𝑐𝑒 𝐶ℎ𝑎𝑟𝑔𝑒 = 𝑇𝑜𝑡𝑎𝑙 𝐼𝑛𝑠𝑡𝑎𝑙𝑙𝑚𝑒𝑛𝑡 – 𝐶𝑎𝑠ℎ 𝑉𝑎𝑙𝑢𝑒
𝐹𝑖𝑛𝑎𝑛𝑐𝑒 𝐶ℎ𝑎𝑟𝑔𝑒 = 990,000 − 850, 000
4. Collateral – a form of security for the lender. 𝐹𝑖𝑛𝑎𝑛𝑐𝑒 𝐶ℎ𝑎𝑟𝑔𝑒 = ₱ 140,000

5. Condition – a national and local economic condition in which the

intended purpose of the loan depends.
(4) Finally, we determine the annual percentage rate, we get
C. Annual Percentage Rate (APR)
24 𝑥 𝐹𝐶
𝐴𝑃𝑅 = Formula
Example: 𝐴𝐹 𝑥 (1 + 𝑛)
Arlene decides to buy a brand new car for ₱850,000. She makes a
down payment of ₱150,000 and monthly payments of ₱17, 500 for 48 24 𝑥 140, 000
𝐴𝑃𝑅 =
months. Find the appropriate annual percentage rate. 700, 000 𝑥 (1 + 48)

Solution: 3, 360, 000

𝐴𝑃𝑅 =
34, 300, 000
(1) Compute for the amount finance, we get
𝐴𝑃𝑅 = 0.0979 𝑜𝑟 9.79%
𝐴𝑚𝑜𝑢𝑛𝑡 𝐹𝑖𝑛𝑎𝑛𝑐𝑒 = 𝐶𝑎𝑠ℎ 𝑣𝑎𝑙𝑢𝑒 – 𝐷𝑜𝑤𝑛 𝑃𝑎𝑦𝑚𝑒𝑛𝑡
𝐴𝑚𝑜𝑢𝑛𝑡 𝐹𝑖𝑛𝑎𝑛𝑐𝑒 = 850,000 – 150,000
𝐴𝑚𝑜𝑢𝑛𝑡 𝐹𝑖𝑛𝑎𝑛𝑐𝑒 = ₱ 700, 000

17
 Lesson 2: Amortization
1−(1+𝑖)−𝑛
𝐴𝑛 = 𝑅 [ ] Formula
Introduction 𝑖

𝐴𝑛 𝑖
Amortization of loan – is the repayment of a loan by periodic payments, 𝑅= Formula
1−(1+𝑖)−𝑛
with the possible exception of the last payment,
are equal in amount.
Example:
Amortization period – is the length of time over which a loan is scheduled
A loan of 7 quarterly payments of ₱8, 300 is to be made, to pay for a
to be fully repaid, the two parties (lender and
borrower) agrees on the amount of a loan, the rate loan at 10% compounded quarterly. Find the value of the loan and
of interest, and the repayment frequency. construct an amortization schedule.

Amortization schedule – is a list of several periods of payments showing Solution:

the principal and the interest parts of those To determine the value of the loan we will use the present value
payments and the outstanding balance (or formula of an ordinary simple annuity as reflected:
principal) after each payment.

OPBI = Outstanding Principal at Beginning of Interval

POP = Previous Outstanding Principal Given:
PRP = Previous Repayment of Principal 𝑅 = ₱8,300 𝑗 = 10% = 0.10 𝑡=
IDEI = Interest Due at End of Interval 1𝑦𝑒𝑎𝑟 𝑎𝑛𝑑 9 𝑚𝑜𝑛𝑡ℎ𝑠
𝑗 0.10
RII = Rate of Interest per Interval 𝑚=4 𝑛=7 𝑖= = = 0.025
𝑚 4
TPEI = Total Payment at End of Interval
RPEI = Repayment of Principal at End of Interval 1−(1+𝑖)−𝑛
𝐴𝑛 = 𝑅 [ ]
𝑖

1−(1+0.025)−7
Recall the variables used in ordinary simple annuity which is significant in 𝐴𝑛 = 8,300 [ ]
0.025
solving authorization:
𝐴𝑛 = 8,300(6.349390597)
𝐴𝑛 = ₱52, 699.942
𝑆𝑛 = 𝐹𝑢𝑡𝑢𝑟𝑒 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑛 𝑛 − 𝑝𝑎𝑦𝑚𝑒𝑛𝑡 𝑜𝑟𝑑𝑖𝑛𝑎𝑟𝑦 𝑠𝑖𝑚𝑝𝑙𝑒 𝑎𝑛𝑛𝑢𝑖𝑡𝑦
𝐴𝑛 = 𝑃𝑟𝑒𝑠𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑛 𝑛 − 𝑝𝑎𝑦𝑚𝑒𝑛𝑡 𝑜𝑟𝑑𝑖𝑛𝑎𝑟𝑦 𝑠𝑖𝑚𝑝𝑙𝑒 𝑎𝑛𝑛𝑢𝑖𝑡𝑦 The present value of the loan is ₱52, 699.942.
𝑅 = 𝑆𝑖𝑧𝑒 𝑜𝑓 𝑒𝑎𝑐ℎ 𝑎𝑛𝑛𝑢𝑖𝑡𝑦 𝑝𝑎𝑦𝑚𝑒𝑛𝑡
𝑗 = 𝑁𝑜𝑚𝑖𝑛𝑎𝑙 𝑖𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑟𝑎𝑡𝑒
𝑚 = 𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑐𝑜𝑛𝑣𝑒𝑟𝑠𝑎𝑡𝑖𝑜𝑛 𝑝𝑒𝑟 𝑦𝑒𝑎𝑟
𝑡 = 𝑇𝑖𝑚𝑒 𝑝𝑒𝑟𝑖𝑜𝑑 (𝑡𝑒𝑟𝑚)𝑜𝑓 𝑡ℎ𝑒 𝑙𝑜𝑎𝑛 𝑜𝑟 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡
𝑛 = 𝑆𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑝𝑎𝑦𝑚𝑒𝑛𝑡𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑎𝑛𝑛𝑢𝑖𝑡𝑦
𝑖 = 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑟𝑎𝑡𝑒 𝑝𝑒𝑟 𝑐𝑜𝑚𝑝𝑜𝑢𝑛𝑑𝑖𝑛𝑔 𝑝𝑒𝑟𝑖𝑜𝑑
18
 For WEEK 5 and WEEK 6
Outstanding Total CORE SUBJECT TITLE: LOGIC
Interest at Repayment of
Principal at Payment at
Period 2.5% Due at Principal at
Beginning of End of CONTENT STANDARD: The learner demonstrates understanding of key
End of Interval End of
Interval Interval concepts of propositional logic; syllogisms and
Interval
fallacies.
PERFORMANCE STANDARD: The learner is able to judiciously apply logic
1 52,699.942 1,317.499 8,300.000 6,982.501
in real-life arguments.
LEARNING COMPETENCY: The learner is able to illustrate and symbolizes
2 45,717.441 1,142.936 8,300.000 7,157.064 propositions; distinguishes between simple
and compound propositions; performs the
3 38,560.377 964.009 8,300.000 7,335.991 different types of operations on propositions;
determines the truth values of propositions;
4 31,224.386 780.610 8,300.000 7,519.390 illustrates the different forms of conditional
propositions; and illustrates different types of
5 23,704.996 592.625 8,300.000 7,707.375 tautologies and fallacies.

6 15,997.621 399.941 8,300.000 7,900.059 Lesson 1: Propositions and Symbols

Introduction
7 8,097.561 202.439 8,300.000 8,097.561
Logic is the science of the correctness or incorrectness of reasoning, or
Total 5,400.058 58,100.000 52,699.942 the study of the evaluation of arguments. Probably the best-known
application mathematical logic is in the area of higher mathematics and in
the field of computer science where the software development makes use
of logic circuit design. It can also be used in law, philosophy and other
OPBI = POP – PRP = 45,717.441 − 7157.064 = ₱38,560.377 disciplines.

IDEI = RII x OPBI = 0.025(38, 560. 377) = ₱964.009 Kind of Sentences

TPEI = Periodic Payment (R) = ₱8,300.00 1. Simple sentences – is a sentence that has one independent
clause.
RPEI = TPEI – IDEI = 8, 300.00 − 964.009 = ₱7, 335.991 2. Compound sentence – is a sentence that contains two or more
independent clauses joined by conjunctions (for, nor, but, or, yet,
so), semicolons, or semicolon followed by a conjunctive adverb.
3. Complex sentences – is a sentences that contains one
independent clauses and one or more dependent clauses.
4. Compound-complex sentence is a compound sentence with one
or more independent clauses.

19
 According to the purpose of the speaker or writer, sentences are Definition
classified as follows:
Propositional logic is a declarative sentence subject for affirmation or
1. Declarative sentence – is used to make statement of fact, wish, denial. It is a statement with truth value; either true (T) or false (F), but not
intent, or feeling. both. Denoted by small letters.
Example: I wish I could visit my grandparents this summer.
Example:
2. Imperative sentence – is used to state a command, request, or 𝑝: I am beautiful. 𝑝 is the proposition
direction.
Example: Please do not answer in chorus.
1. SIMPLE PROPOSITION – a proposition that conveys one
3. Interrogative sentence – is used to ask a question. thought with no connecting words.
Example: Did you prepare for the final examinations?
Example: Rowena is passing in Mathematics.
4. Exclamatory sentence – is used to express strong feelings.
Example: The teacher shouted, “Keep quiet”. 2. COMPOUND PROPOSITION – contains two or more simple
propositions that are put together using connective words.
PROPOSITION – is a declarative sentence that can be classified as true Example: Rowena is passing in Mathematics but she is failing in
or false, but not both. Social Science.

Example 3. CONJUNCTION – two simple propositions connected using the

word 𝑎𝑛𝑑.
Decide whether each of the following is a proposition or is not a
proposition. Example: Today is Friday and tomorrow is Saturday.

1. The number 4 is even and less than 12. 4. DISCONJUNCTION – two simple propositions that are
2. Malolos is the capital of Bulacan. connected using the word 𝑜𝑟.
3. How old are you?
4. Open your eyes. Example: I will pass the math exam or I will be promoted.
5. Aaron’s solution is incorrect.
5. CONDITIONAL – two simple propositions that are connected
Solution: using the words 𝑖𝑓 … 𝑡ℎ𝑒𝑛.
1. Proposition
2. Proposition Example: If you will recite the poem, then you will pass the oral
3. Not a poposition (a question) examination.
4. Not a proposition ( a command)
5. Not a proposition (a paradox)

20
 6. BICONDITIONAL – conjunction of two conditional statement SYMBOLS – are used to simplify work in logic. If 𝑥 are frequently used
where the antecedent and consequent of the first statement have letters in algebra, the letters 𝑝, 𝑞 or 𝑟 are often used to represent
been switched in the second statement. proposition in logic.

Example: If two sides of a triangle are congruent, then the angle Connective Symbol Type of Statement
opposite them are congruent, and if two angles are triangle are
congruent, then the sides opposite them are congruent. 𝑎𝑛𝑑 ∧ 𝑐𝑜𝑛𝑗𝑢𝑛𝑐𝑡𝑖𝑜𝑛

𝑜𝑟 ∨ 𝑑𝑖𝑠𝑗𝑢𝑛𝑐𝑡𝑖𝑜𝑛
7. NEGATION – is a statement that is false whenever the given
statement is true, and true whenever the given statement is
𝑛𝑜𝑡 ∼ 𝑛𝑒𝑔𝑎𝑡𝑖𝑜𝑛
false.
𝑖𝑓 … 𝑡ℎ𝑒𝑛 → 𝑐𝑜𝑛𝑑𝑖𝑡𝑖𝑜𝑛𝑎𝑙
Example: The negation of the statement “Herbert is good” can
be written as: 𝑖𝑓 𝑎𝑛𝑑 𝑜𝑛𝑙𝑦 𝑖𝑓 (𝑖𝑓𝑓) ↔ 𝑏𝑖𝑐𝑜𝑛𝑑𝑖𝑡𝑖𝑜𝑛𝑎𝑙
Herbert is not good
It is not the case that Herbert is good.

Example
Example
Give the negation of the statement:
Let p represent the proposition “He has green thumb” and q represent the
Her aunt’s name id Lucia. proposition “He is a senior citizen”.

Solution: Convert each compound proposition into symbols.

(a) Her aunt’s name is not Lucia.
(a) He has green thumb and he is a senior citizen.
(b) It is not the case that her aunt’s name is Lucia.
(b) He does not have green thumb or he is not a senior citizen.

(c) It is not the case that he has green thumb or is a senior citizen.

(d) If he has green thumb, then he is not a senior citizen.

21
 3. The truth table of compound proposition of n components
statements, each represented by a different letter, has 2 number
of rows.

For example,

 A compound proposition with two different letters (simple

statements) has 22 or 4 rows.

 A compound proposition with three different letters

(simple statements) has 23 or 8 rows.

Lesson 2: Truth Tables

Introduction

Constructing Truth Tables

1. Determine if the final result is a conjunction, disjunction, or

negation. Recall dominant connectives and the use of
parentheses.

2. Complete the columns under

(a) the simple statements (P, Q,…)
(b) the connectives negations inside parentheses
(c) any remaining statements and their negations
(d) any remaining connectives reaching the final column as
determined in Step 1. Number the column in the order they
are completed and highlight the column containing the final
answer.

22
Example Lesson 3: Forms of Conditional Proposition

Construct a truth table for

Introduction
(a) ∼ (𝑃 ∧ 𝑄) (b) ∼ (𝑃 ∨ 𝑄) (c) ∼ (𝑃 ∧∼ 𝑄)
A conditional statement has two parts:

(a) Hypothesis (or antecedent), denoted by 𝑃 and

Solution:
(b) Conclusion (or consequent), denoted by 𝑄.
(a)
In symbol, the statement, “If 𝑃, then 𝑄”, is written as 𝑃 → 𝑄
P Q 𝑃 ∧ 𝑄 ∼ (𝑃 ∧ 𝑄)
T T T F Example 1
T F F T
F T F T Determine whether each of the following statements is a proposition or
F F F T not. If a proposition, give its truth value.

1. 𝑞: Rhombuses are squares.

(b) Solution: 𝑞 is a proposition. Its truth value is false.

P Q 𝑃 ∧ 𝑄 ∼ (𝑃 ∧ 𝑄) 2. 𝑟: Is an equilateral triangle an isosceles triangle?

T T T F Solution: It is not a proposition as it is not a declarative statement.
T F T F
F T T F 3. 𝑠: Triangle ABC is a right triangle.
F F F T Solution: It is a declarative sentence yet the truth value cannot be
determined. Hence, this is not a proposition.
(c)
4. 𝑡: My seatmate will get a perfect score in the Logic Exam.
P Q ∼ 𝑄 𝑃 ∧∼ 𝑄 ∼ (𝑃 ∧∼ 𝑄) Solution: 𝑡 is a proposition. Yet, the truth value will only be
T T F F T determined after the exam.
T F T T F
F T F F T 5. 𝑢: Welcome to the Philippines!
F F T F T Solution: This is an exclamatory sentence. So, this is not a
proposition.

23
QUALITATIVE CATEGORIES OF PROPOSITIONS Singular The subject term A prime number has only
Proposition denotes a single two factors.
Propositions are categorized as affirmative or negative. The following are person or thing. 2 is an even number.
examples of affirmative propositions:

1. A quadrilateral has four sides. When quality and quantity are combined, propositions may be classified
2. The Philippines is a member of the ASEAN. based on its mood as follows:
3. Whales are mammals.
4. A circle has no sides.
5. Humans are cousins of monkeys. Types Universal Particular
Proposition Proposition
The following are examples of negative propositions:
Affirmative A I
1. A right triangle has no obtuse angle. Proposition Example: All 𝑥𝑥 are Example: Some 𝑥𝑥 is
2. Tomato is not a fruit. 𝑦𝑦. 𝑦𝑦.
3. Parallel lines never intersect.
4. Heroes are not immortals. Negative Proposition E O
5. Philippines is never an island. Example: All 𝑥𝑥 is not Example: Some 𝑥𝑥 is
𝑦𝑦. not 𝑦𝑦.
QUANTITATIVE CATEGORIES OF PROPOSITIONS

Propositions are further classified according to quantity or the different The letters A, E, I and O are used to refer propositions.
possible extensions of their subject terms.
A – is used to refer universal affirmative propositions.
Type of
Categorical Description Examples E – is used to refer universal negative propositions.
Proposition
I – is used to refer particular affirmative propositions.
Universal The subject term is All quadrilaterals are
Proposition taken in full polygons. O – is used to refer particular negative propositions.
extension. No parallel lines meet.
Every integer is a real
number.
Particular The subject term is Some algebraic
Proposition taken only in expressions are
particular extension. polynomials.
Some children are
overweight.

24
Example 2
Lesson 4: Simple and Compound Propositions
Determine whether each statement is A, E, I or O propositions.
Introduction
1. There are snakes in every forest. Definition
Solution: The statement is affirmative. And the word “every”
suggests a universal usage. Hence, the statement is an Simple proposition is a declarative statement that cannot be broken
A proposition. down any further into other component
propositions. In other words, simple propositions
2. Some crocodiles are found in the city. are sentences having one thought. Simple
propositions are also called atomic propositions
Solution: The statement is affirmative. And the word “some” because they are the building blocks of
suggests a particular usage. Hence, the statement is an propositional logic.
I proposition.
Compound proposition is a proposition formed by combining two or
3. Not all lamb is tame. more simple categorical propositions by some
logical connectors. Some logical connectors
Solution: The statement is negative. The word “not all” suggests used in compound propositions are 𝒏ot, 𝒂nd
a particular usage. Hence, the statement is an O or , 𝒊f−𝒕 𝒕hen , and others.
proposition.

4. Children are never as free as a bird.

Example 1
Solution: The statement is negative. The word “children”
suggests a universal usage. Hence, the statement is an For each of the following propositions, determine whether it is a simple or
E proposition. compound proposition.

5. Every odd number multiplied by 2 is an even number. 1. Rhombuses are squares.

Solution: This is a simple proposition.
Solution: The statement is affirmative. The word “every” suggest
a universal usage. Hence, the statement is an A 2. It is not the case that √5 is a rational number.
proposition Solution: The word “not” in this case is a logical connector. Hence,
this is a compound proposition.

3. 7 is a prime number.
Solution: This is a simple proposition.

25
 4. If the sky is cloudy, then it will rain. 2. 𝑝 → 𝑞
Solution: The words “if” and “then” is a logical connector. Hence, Solution: If Anna is a MAPEH teacher, then she is a LET passer.
this is a compound proposition.
3. 𝑞 →𝑝
5. A triangle is equilateral if and only if it is equiangular. Solution: If Anna is a LET passer then she is a MAPEH teacher.
Solution: The phrase “if and only if” is a logical connector. Hence,
this is a compound proposition 4. ~𝑞 ˅ ~𝑝
Solution: Anna is not a LET passer or she is not a MAPEH
teacher.
Connectives that are used relating proposition 𝑝𝑝 to another proposition 𝑞𝑞
to form a new proposition. 5. ~𝑝 ↔ 𝑞
Solution: Anna is not a MAPEH teacher if and only if she is a LET
Symbol Connectives Connecting 𝒑 and 𝒒 in passer.
symbols

˄ And 𝒑˄𝒒 Example 3

but Write each compound sentence in symbolic form.
yet
˅ Or 𝒑˅𝒒 1. If the sky is cloudy, then probably it will rain.
Solution: Let 𝑝𝑝 be the sentence “The sky is cloudy.” and 𝑞𝑞 be
→ implies 𝒑→𝒒 the sentence “Probably it will rain.” So, 𝑝 → 𝑞.
if….., then
↔ is equivalent to 𝒑↔𝒒 2. A triangle is right if and only if it has a 90-degree angle.
if and only if Solution: Let 𝑝𝑝 be the sentence “A triangle is right.” and 𝑞𝑞 be
the sentence “A triangle has a 90-degree angle.” So,
~ Not ~𝒑 𝑝 ↔ 𝑞.

3. 2 is prime and even.

Solution: Let 𝑝𝑝 be the sentence “2 is prime.” and 𝑞𝑞 be the
Example 2 sentence “2 is even.” So, 𝑝 ˄ 𝑞.

Given that 𝑝 is the statement “Anna is a MAPEH teacher.” and 𝑞 is the 4. Study hard or you will fail.
statement “Anna is a LET passer.” Write each symbolism in ordinary Solution: Let 𝑝𝑝 be the sentence “Study hard.” and 𝑞𝑞 be the
English sentence. sentence “You will fail.” So, 𝑝 ˅ 𝑞.

1. 𝑝 ˄ 𝑞 5. Prices are going up but wages are not.

Solution: Anna is a MAPEH teacher and she is a LET passer. Solution: Let 𝑝𝑝 be the sentence “Prices are going up.” and 𝑞𝑞
be the sentence “Wages are not going up.” So, 𝑝 ˄
~𝑞.
26
Reference

Orlando A. Oronce General Mathematics First Edition REX Book Store

Ian June L. Garces, Phd General Mathematics (Chan.Miro.Quiming)
Crisologo, L., Hao, L., Miro, E., Palomo, E., Ocampo, S., and Tresvalles,
R. General Mathematics Teacher’s Guide. Department of Education-
Bureau of Learning Resources, Ground Floor Bonifacio Bldg, DepEd
Complex Meralco Avenue, Pasig City, Philippines 1600. Lexicon Press
Inc. (2016). [email protected].
Banigon, Ricardo Jr., Camilon, Maita, Manalo and Catalina. General
Mathematics. 1st ed. Manila, Philippines: Educational Resource
Corporation. (2016) Crisologo, L., Hao, L., Miro, E., Palomo, E.,
Ocampo, S., and Tresvalles, R. General Mathematics Teacher’s Guide.
Department of Education- Bureau of Learning Resources, Ground Floor
Bonifacio Bldg, DepEd Complex Meralco Avenue, Pasig City,
Philippines 1600. Lexicon Press Inc. (2016). [email protected].
Image in the Cover Page of Module 10. Usage Rights (Labeled for
Reuse) https://bit.ly/3cQWpOO Orines, F. General Mathematics. 2nd
ed.Manila, Philippines: Phoenix Publishing House Inc. (2016), Chapter
5 pp. 1 – 55 Oronce, O. General Mathematics. 1st ed. Manila,
Philippines: Rex Publishing House (2016), pp.226 - 335.

27
MASTERY CHECK 3. 𝑷 = ₱ 2 100; 𝒓 = 𝟏𝟕%; 𝒕 = 𝟏𝟎 6. 𝑷 = ₱ 34 000; 𝒓 = 𝟗%; 𝒕 =
𝟕
WEEK 1
Activity 1

Name: ___________________________________Strand:___________
Direction: Compute the simple Interest earned given the principal (P), rate
of interest (r), and time (t). Show your solution. (2 points each
item)

1. 𝑷 = ₱ 10 000; 𝒓 = 𝟓%; 𝒕 = 𝟑 4. 𝑷 = ₱ 55 000; 𝒓 𝟐𝟎% =

; 𝒕 = 𝟏𝟐 7. What amount of interest will be charged on ₱ 7 300 borrowed for 3 years
at a simple interest rate of 12% per annum?

2. 𝑷 = ₱ 131 000; 𝒓 = 𝟑%; 𝒕 = 𝟓 5. 𝑷 = ₱ 38 000; 𝒓 =

𝟏𝟐%; 𝒕 = 𝟖 8. If a nine-month term deposit at a bank a simple interest rate of 9% per
annum, how much will have to be deposited to earn ₱ 225 of interest?

28
9. Aaron makes an investment by lending ₱ 24 000 to Bartholome for 2 2. 𝑃 = ₱ 121 000; 𝑟 = 4.5%; 𝑡 = 3 𝑦𝑒𝑎𝑟𝑠; 𝑆𝑒𝑚𝑖 − 𝐴𝑛𝑛𝑢𝑎𝑙 𝐶𝑜𝑚𝑝𝑜𝑢𝑛𝑑𝑖𝑛𝑔
years at an interest rate of 11% per annum. What is the maturity value
of the investment?

3. 𝑃 = ₱ 2 700; 𝑟 = 19%; 𝑡 = 11 𝑦𝑒𝑎𝑟𝑠; 𝑀𝑜𝑛𝑡ℎ𝑙𝑦 𝐶𝑜𝑚𝑝𝑜𝑢𝑛𝑑𝑖𝑛𝑔

Activity 2

Name: ____________________________________Strand:___________
Direction: Compute the following: Show your solution. (2 points each 3
item) 4. ₱ 12 500 𝑎𝑡 7 % 𝑐𝑜𝑚𝑝𝑜𝑢𝑛𝑑𝑒𝑑 𝑠𝑒𝑚𝑖 − 𝑎𝑛𝑛𝑢𝑎𝑙𝑙𝑦 𝑓𝑜𝑟 12 𝑦𝑒𝑎𝑟𝑠
4

Future Value:

1. 𝑃 = ₱ 15 000; 𝑟 = 6%; 𝑡 = 2 𝑦𝑒𝑎𝑟𝑠; 𝑄𝑢𝑎𝑟𝑡𝑒𝑟𝑙𝑦 𝐶𝑜𝑚𝑝𝑜𝑢𝑛𝑑𝑖𝑛𝑔

1
5. ₱ 51 000 𝑎𝑡 8 % 𝑐𝑜𝑚𝑝𝑜𝑢𝑛𝑑𝑒𝑑 𝑞𝑢𝑎𝑟𝑡𝑒𝑟𝑙𝑦 𝑓𝑜𝑟 8 𝑦𝑒𝑎𝑟𝑠
2

29
 3
9. ₱ 36 000 𝑎𝑡 9 % 𝑐𝑜𝑚𝑝𝑜𝑢𝑛𝑑𝑒𝑑 𝑚𝑜𝑛𝑡ℎ𝑙𝑦 𝑓𝑜𝑟 4 𝑦𝑒𝑎𝑟𝑠
4
Present Value:

6. 𝑃 = ₱ 45 000; 𝑟 10% =; 𝑡 = 9 𝑦𝑒𝑎𝑟𝑠; 𝑐𝑜𝑚𝑝𝑜𝑢𝑛𝑑𝑒𝑑 𝑎𝑛𝑛𝑢𝑎𝑙𝑙𝑦

1
10. ₱ 120 000 𝑎𝑡 10 % 𝑐𝑜𝑚𝑝𝑜𝑢𝑛𝑑𝑒𝑑 𝑞𝑢𝑎𝑟𝑡𝑒𝑟𝑙𝑦 𝑓𝑜𝑟 6 𝑦𝑒𝑎𝑟𝑠
2

7. 𝑃 = ₱ 28 000; 𝑟 = 9%; 𝑡 = 8 𝑦𝑒𝑎𝑟𝑠; 𝑐𝑜𝑚𝑝𝑜𝑢𝑛𝑑𝑒𝑑 𝑞𝑢𝑎𝑟𝑡𝑒𝑟𝑙𝑦

8. 𝑃 = ₱ 30 000; 𝑟 = 3.5%; 𝑡 = 7 𝑦𝑒𝑎𝑟𝑠; 𝑐𝑜𝑚𝑝𝑜𝑢𝑛𝑑𝑒𝑑 𝑚𝑜𝑛𝑡ℎ𝑙𝑦

30
 ASSESSMENT 1
Principal (P) Interest Rate Time (t) Maturity
(r) Value (A)
Name: _________________________________Strand: ____________ ₱ 35 600 6% 9 𝑚𝑜𝑛𝑡ℎ𝑠

Direction: Compute the following: Show your solution. ₱ 140 250 10% 15 𝑚𝑜𝑛𝑡ℎ𝑠
(2 points each item)
₱ 75 800 1 2 𝑦𝑒𝑎𝑟𝑠
A. Complete the table by finding the simple interest. 8 %
2
Principal (P) Interest Rate Time (t) Amount of ₱ 340 200 11% 6 𝑦𝑒𝑎𝑟𝑠
(r) Interest (I)
₱ 72 500 8% 3 𝑦𝑒𝑎𝑟𝑠 ₱ 1 400 500 9% 10 𝑦𝑒𝑎𝑟𝑠

₱ 3 000 12% 6 𝑚𝑜𝑛𝑡ℎ𝑠

₱ 48 200 11% 1
2 𝑦𝑒𝑎𝑟𝑠
2

₱ 161 500 4 4 𝑦𝑒𝑎𝑟𝑠

10 %
5

₱ 450 000 1 5 𝑦𝑒𝑎𝑟𝑠

9 %
2

31
MASTERY CHECK 3. Jemima has been contributing ₱ 460 at the end of each quarter for the
past 18 quarters to a savings plan that earns 9% compounded
WEEK 2 quarterly. What amount will she accumulate if she continues with the
Activity 1 Simple Ordinary Annuity plan for another year?

Name: __________________________________Strand:___________
Direction: Compute the following: Show your solution.
(5 points each item)

1. Determine the present value on July 7 of ₱ 6 800 paid at the end of

each subsequent calendar quarter for 7 years if money is worth 6%
compounded quarterly.

2. Find the present value of an ordinary annuity of ₱ 1 230 payable

monthly for 2 years and 6 months if money is worth 18% compounded
monthly.

32
 4. 𝑷 = ₱ 50 000; 𝒊 = 𝟎. 𝟎𝟐; 𝒏 = 𝟏𝟎
Activity 2 Future Value

Name: __________________________________Strand:___________
Direction: Compute the following using the different formula of future
value below: Show your solution. (30 points)

(1+𝑖)𝑛 −1 (3 points each item)

(1) 𝐹𝑉 = 𝑃 [ ]
𝑖

(1+𝑖)𝑛 −1
(2) 𝐹𝑉 = 𝑃 [ ] (1 + 𝑖) (3 points each item)
𝑖

5. 𝑷 = ₱ 2 500; 𝒊 = 𝟎. 𝟎𝟐; 𝒏 = 𝟔

1. 𝑷 = ₱ 4 000; 𝒊 = 𝟎. 𝟎𝟑; 𝒏 = 𝟒

2. 𝑷 = ₱ 15 000; 𝒊 = 𝟎. 𝟎𝟒; 𝒏 = 𝟖

3. 𝑷 = ₱ 40 000; 𝒊 = 𝟎. 𝟎𝟓; 𝒏 = 𝟕

33
 2. 𝑷 = ₱ 20 000; 𝒊 = 𝟎. 𝟎𝟓; 𝒏 = 𝟔 5. 𝑷 = ₱ 60 000; 𝒊 =
𝟎. 𝟎𝟗; 𝒏 = 𝟏𝟏
Activity 3 Present Value

Name:
_____________________________________Strand:______________
Direction: Compute the following using the different formula of present
value below: Show your solution. (30 points)

𝑃[1−(1+𝑖)−𝑛 ]
(1) 𝑃𝑉 = (3 points each item)
𝑖

𝑃[1−(1+𝑖)−𝑛 ]
(2) 𝑃𝑉 = (1 + 𝑖) (3 points each item)
𝑖

1. 𝑷 = ₱ 6 000; 𝒊 = 𝟎. 𝟎𝟑; 𝒏 = 𝟓 4. 𝑷 = ₱ 35 000; 𝒊 =

𝟎. 𝟎𝟐; 𝒏 = 𝟒 3. 𝑷 = ₱ 4 500; 𝒊 = 𝟎. 𝟎𝟕; 𝒏 = 𝟓

34
 ASSESSMENT MASTERY CHECK
(Deferred Annuity)
WEEK 3
Name: _________________________________Strand: ____________
Activity 1
Direction: Read and analyze the problem carefully. Show your solution.
(10 points)
Name: __________________________________Strand:___________
Problem:
Direction: Read and answer the following question. (3 points each item)
A deferred annuity is purchased that will pay 5 000 per quarter for 10 years
after being deferred for 5 years and with interest rate of 6% compounded
quarterly. What is the present value of the annuity? Consider the following listing on stocks and answer the questions that
follow:

For Stock JJJ:

_____________ 1. What was the highest price of the stock for the last 52
weeks?

_____________ 2. What was the dividend per share last year?

_____________ 3. What was the annual percentage yield last year?

_____________ 4. What was the closing price in the last trading day?

_____________ 5. What was the closing price the day before the last
trading day?

35
For Stock KKK:

_____________ 1. What was the lowest price of the stock for the last 52 ____5. The amount payable on the maturity date of a bond.
weeks?
A. Market value C. Face value
_____________ 2. How many shares were traded in the last trading day? B. Cash value D. Stock value

_____________ 3. What was the dividend per share? ____6. The current price of a stock at which it can be sold.

_____________ 4. What was the closing price in the last trading day? A. Stock market index C. Market value
B. Bond market index D. Dividend per share
_____________ 5. What was the closing price the day before the last
trading day? ____7. A measure of the portion of a stock.

A. Stock market index C. Market value

ASSESSMENT B. Bond market index D. Dividend per share

Name: _________________________________Strand: ___________

____ 8. The price the sellers of the stock are willing to sell the stock.
Direction: Choose the letter that corresponds to the correct answer. Write
the letter of your choice on a short bond paper. (2 points each item) A. Bid Price C. Ask Size
B. Ask Price D. Bid Size

For numbers 1 – 4, choose your answer from the following: ____ 9. The price these buyers are willing to pay for the stock.

A. Stock B. Bond C. Coupon D. Dividend A. Bid Price C. Ask Size

B. Ask Price D. Bid Size
____1. A share in the ownership of a company.
____ 10. The number of individual buy orders and the total number of
____2. A share in the company’s profit. shares they wish to buy.

____3. A periodic interest payment that the bondholder receives during the A. Bid Price C. Ask Size
time between purchase date and maturity date. B. Ask Price D. Bid Size

____ 4. An interest-bearing security which promises to pay a stated

amount of money on the maturity date, and regular interest
payments.

36
MASTERY CHECK
Activity 2 (Amortization)
WEEK 4
Activity 1 (APR)
Name: __________________________________Strand:___________
Direction: Read and analyze the problem. Solve and complete the table.
Name: ___________________________________Strand:____________
Direction: Read and analyze the problem carefully. Show your solution. Problem: A ₱30,600 loan at 15% compounded semiannually is to be
(10 points) amortized every 6 months for 3 years. Find the quarterly payment
and construct an amortization schedule.
Problem: A contractor in Mindanao purchases a computer system
for ₱ 1, 200,000. After making a down payment of ₱ 300, 000, he Solution:
agreed to payments of ₱ 43, 000 per month for 24 months. Find
the total installment cost and the annual percentage rate. (a) Given: (6 points)

𝐴𝑛 𝑖
(b) Compute using the formula: 𝑅 = (4 points)
1−(1+𝑖)−𝑛

(c) What is the amortization payment? ______________ (1 point)

37
 (d) Complete the table (8 points)
MASTERY CHECK
WEEK 5 and WEEK 6
For
Outstanding Interest at Total Activity 1
Repayment
Principal at 7.5% Due at Payment at
Period of Principal
Beginning End of End of
at End of
of Interval Interval Interval
Interval Name: __________________________________Strand:____________
Direction: Classify each proposition as simple or compound. Classify
1 30,600.000 2,295.000 6,519.174 4,224.174
each compound proposition as negation, conjunction,
disconjuction, conditional or biconditional.
2 26,375.826 1,978.187 6,519.174 4,540.987
4,881.561 _______________________ 1. My friend took his master’s degree in
3 21,834.839 1,637.613 6,519.174 Spain.

4 16,953.278 1,271.496 6,519.174 5,247.678 _______________________

5 11,705.600 877.920 6,519.174 5,641.254

_______________________ 2. Roses are red, but violet are blue.
6 6,064.346 454.826 6,519.174 6,064.348
_______________________
Total 8,515.042 39,115.044 30,600.002

_______________________ 3. You are entitled to a 30% discount if you

are a member.
_______________________

_______________________ 4. Roel was on time, but Tom was late.

_______________________

38
 Activity 3
_______________________ 5. Either he watches a movie or dines with
his friends.
_______________________ Name: ____________________________________Strand:___________
Direction: Determine whether each statement is 𝐴, 𝐸, 𝐼 or 𝑂 proposition.
(2 points each item)
_______________________6. If it is an acute angle, then it is an acute
angle.
_______ 1. Every problem has a solution.
_______________________

_______ 2. Some typhoons are not Pacific Ocean-origin.

Activity 2 _______ 3. No man is an island.

Name: __________________________________Strand:_____________
Direction: Determine whether each of the following statements is a _______ 4. Respect is always earned.
proposition or not. If it is a proposition, give its truth value.
(2 points each item)
_______ 5. Not every shiny object is silver.

_______________________ 1. Every problem has a solution.

_______________________ 2. Find a number greater than 1.

_______________________ 3. Let’s go!

_______________________ 4. Natural numbers are subset of the real

numbers.

_______________________ 5. I am lying.
39
 Activity 4 ASSESSMENT
Name: _________________________________Strand:______________
Name: _________________________________Strand: ____________
Direction: Determine whether each statement is a simple or compound
statement (2 points each item) Direction: Choose the letter that corresponds to the correct answer. Write
the letter of your choice on a short bond paper. (2 points each
item)

_______________________ 1. It is not the case that √5 is a rational ____1. What is the sequence of statements that demonstrates that a
number. theorem is true?

A. Argument B. Premise C. Proof D. Theorem

_______________________ 2. Jose Rizal is a National Hero.

____ 2. Which of the following illustrates this logical equivalence

_______________________ 3. Either Math is fun or it is boring. P → Q ≡ ~ Q → ~ P?

A. Contrapositive Law C. Identity Law

_______________________ 4. 5 is an integer. B. Distributive Law D. Negation Law

____ 3. Which of the following statement is a proposition?

_______________________ 5. If you sleep early, then you will wake up
early. A. Good luck! C. What is the time now?
B. Get me a glass of milkshake. D. The only odd prime
number is 2.

____ 4. What is the truth value of the statement 4 + 3 = 7 𝑜𝑟 5 is not

prime’?

A. False C. Cannot be determined

B. True D. Neither true nor false

40
____ 5. Which of the following option is true? ____ 10. Two simple propositions connected using the word 𝑎𝑛𝑑.

A. If the Sun is a planet, then elephants will fly. A. Compound Proposition C. Simple Proposition
B. 3 + 2 = 8 if and only if 5 − 2 = 7 B. Conditional D. Conjunction
C. 1 > 3 and 3 is a positive integer
D. −2 > 3 or 3 is a negative integer

____ 6. Let 𝒑: I am in Bangalore. 𝒒: I love cricket. Which of the following is

𝒑 → 𝒒?

A. I love cricket
B. I am not in Bangalore
C. If I am in Bangalore then I love cricket
D. If I love cricket then I am in Bangalore

____ 7. What is the truth value of the statement below? ‘If 9 is prime then
3 is even’.

A. False C. Cannot be determined

B. True D. Neither true nor false

____ 8. A proposition that conveys one thought with no connecting words.

A. Simple Proposition C. Conditional

B. Conjunction D. Compound Proposition

____ 9. Contains two or more simple propositions that are put together
using connective words.

A. Compound Proposition C. Conjunction

B. Negation D. Simple Proposition

41