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DLP Deferred Annuity

The lesson plan discusses deferred annuities. The objectives are to calculate the present value and period of deferral of a deferred annuity, and construct a time diagram for a deferred annuity. A deferred annuity is a series of payments that starts later than the purchase date. The period of deferral is the time between purchase and when payments begin. Examples show how to find the period of deferral using a time diagram or formula. Real-life applications of deferred annuities include installment purchases, credit cards, real estate, and retirement savings.

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Val Daryl Anhao
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1K views7 pages

DLP Deferred Annuity

The lesson plan discusses deferred annuities. The objectives are to calculate the present value and period of deferral of a deferred annuity, and construct a time diagram for a deferred annuity. A deferred annuity is a series of payments that starts later than the purchase date. The period of deferral is the time between purchase and when payments begin. Examples show how to find the period of deferral using a time diagram or formula. Real-life applications of deferred annuities include installment purchases, credit cards, real estate, and retirement savings.

Uploaded by

Val Daryl Anhao
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Detailed Lesson Plan in General Mathematics

I. Objectives
At the end of the lesson the students will be able to:
1. calculate the present value and period of deferral of a deferred annuity; and
2. construct a time diagram for a deferred annuity.
II. Subject Matter
` Topic: “Deferred Annuity”
References: LM: Dimasuay, Lynie. et.al (2016). General Mathematics, C & E
Publishing, Inc.
TG: Teacher’s Guide for Senior High School General Mathematics
Core Subject pages 213-218
Materials: Visual aids, calculator, laptop and LED Television
Value Focus: Rationality
PPST: Domain 4 – Curriculum and Planning
Time Frame: 1 hour

III. Learning Activities


A. Preparatory Activities

Teacher’s Activity Students’ Activity

1. Prayer
2. Checking of Attendance
3. Review

In order to refresh your memory from our


past lesson, let us have an activity;

Solve this crossword puzzle

Questions:
1. What is the formula to determine the
future value of an ordinary annuity? 1. Sir.
2. What do you call a general annuity in
which the periodic payment is made 2. It is called general ordinary annuity
at the end of the payment interval? Sir.
3. What is the other term for fair market
value? 3. The other term for fair market value is
called an economic value Sir.
4. What is the term that refers to
payment received or payments or
deposits made?
5. It is the price an asset would sell for 4. The term is cash flow Sir.
on the open market when certain
conditions are met.
5. It is fair market value Sir.
Well done!

4. Motivation
Now, let us have an activity, match the word
to the corresponding number:

A B
Annually 2
Semi-annually 0.5
Monthly 12
Daily 1
Biennially 365
Weekly 4
Quarterly 52

You got the answers?

Very good! Thank you very much. Yes Sir!

B. Developmental Activity

Teacher’s Activity Students’ Activity

1. Presentation

Previously, you learned how to solve simple


and general annuity. So far, all the problems on
finding present and future values only dealt
with a single cash flow. However, most of the
financial events happening in people’s lives
rarely happen in just a single event. It is
common for workers to receive their salary
twice a month or monthly, to pay loans,
electricity, water, phone, and other utility bills
monthly, and likewise, be able to set aside
savings regularly with these normal routines in
mind, it is then important to be able to set up a
method to efficiently compute the future and
the present value of a regular stream of cash
Flows
Our lesson for today is about all about Deferred
Annuity.

Here are the learning objectives that you will


attain after our discussion.
At the end of the lesson the we will be able
Please read the objectives: to:
1. calculate the present value and
period of deferral of a deferred
annuity; and
2. construct a time diagram for a
deferred annuity.

Annuity. It is a sequence of equal


2. Discussion payments (or deposits) made at a regular
In order to know what is deferred annuity, we interval of time.
will recall annuity. What is annuity?

Very good. Deferred annuity is another type of It is a series of payments, the same with
annuity that focuses on payments (or deposits) the previous annuity learned but, will start
that starts in more than one period from the on a later date.
present. What does this mean?

Unlike an immediate annuity, which starts


Very good. annual or monthly payments almost
immediately, investors can delay
Investors can take advantage on this kind of payments from a deferred annuity
annuity. Why? indefinitely

You are correct.

Period of Deferral is the time between the


purchase of an annuity and the start of the It is the gap of time or the delay of
payments for the deferred annuity. payment from the purchase until the time
This could mean that? you will start to pay.

Very good!

Using a time diagram, you can count on the


amount of time of deferred annuity.

In this time diagram, the period of deferral is 𝑘𝑘


because the regular payments of R start at time
k + 1. The notation R* represents k “artificial
payments,’’ each equal to R, but are not
actually paid during the period of deferral.

For example:
Find the period of deferral for a monthly
payment of ₱12,000.00 for 9 years that will
start 6 months from now.
In finding the period of deferral, we will
construct a time diagram.
The x on the diagram indicates 5 skip
payments. There are 5 months or 5 periods of skip
This means that? payments.

Yes! Well done!

Another example. However, you will try to


answer the problem.

Semi-annual payments of ₱7,500.00 for 15


years that will start 4 years from now.
Therefore, there are 7 periods or 7 semi-
annual intervals.

One way to find the period of deferral is to


construct a time diagram. However, from time-
to-time problems may involve counting
numerous amounts of time. You may use this .
kind of formula:
k =mt −1
Where k is the period of deferral
m is the frequency of conversion
and t for time.

Example:
Monthly payment of ₱2000.00 for 9 years
starting 7 years from now.
Given: t=7 years; m=12
k =mt −1
k =12 (7 )−1
k =84−1
k =83 years∨83 periods

Alright. Let us have a seatwork, on a scratch


paper solve the period of deferral.

Seatwork: What is the period of deferral if semi-


annual payment of ₱12, 000.00 for 10 years
that will start 5 years from now?
Given: t=5 years; m=2
k =mt −1
Kindly solve this on the board. k =2 (5 )−1
k =10−1
k =9 semi−annual intervals∨9 periods

No Sir.
Excellent. Do you have any question?

If there’s none, let’s apply the concept you’ve


learned in real life situation.

3. Application

Some examples of deferred annuity in real life:


 If you will buy an appliance, some big
stores or appliances center offers
deferred payment.

 A credit card company is offering its


clients to purchase today but to start
paying monthly with their choice of the
term after 3 months.
 A real estate agent is urging a house
and lot buyer to purchase now and start
paying after 3 years when the housing
unit is ready for occupancy.
 A worker who has gained extra income
now and wants to save his money so
that he can withdraw his money monthly
starting on the day of his retirement
from work.

4. Generalization

To sum up our lesson for today, what have you I learned the concept of deferred annuity
learned from our discussion?

Very good. Who can give other realization? There is a lot of application of deferred
annuity in real life situation.

Correct. How can we find the period of deferral By constructing a time diagram.

Do you have questions and clarifications None Sir.


regarding to our topic?

If there’s none, prepare for a quiz.

IV. Evaluation

Teacher’s Activity Students’ Activity

Directions: On a one ½ sheet of paper,


answer the following in 10 minutes.

Find the period of deferral in each of the


following deferral annuity problem:

1. Payment of ₱ 3,000.00 every 3 months for


8 years that will start 6 years. Make a 1.
diagram. 6 years 8 years

Therefore, there are 23 periods.


2. Given: m=12; t= 3
Solution:
k =mt−1
k =1 2 ( )
3
12
−1
k =2
2. Payment of ₱ 700.00 every month for one Therefore, there are 2 periods.
(1) year that will start at the end of the third
month

Directions: Fill in the blanks below with the


correct term to make each statement true
about calculating the present value and
period of deferral of a deferred annuity.

1. A deferred annuity is an annuity 1. Present


whose payments starts in more than 2. Periodic payment
period from the ________. 3. k+1
2. Each payment in an annuity is 4. withdraw
called the ________.
3. A deferred annuity is an annuity
whose first payment takes place at
some predetermined time ______.
4. In retirement planning, payments
on income taxes are deferred until
you ______ the money

V. Assignment

Teacher’s Activity Students’ Activity

Direction: Find the period of deferral in each


of the following deferral annuity problems
(one
way to find the period of deferral is to count
the number of artificial payment (k).
Make a diagram. ½ sheet of paper.

1. Payment of ₱ 1,000.00 every other


month for 2 years that will start after 3
years

2. Payment of ₱ 400.00 every 5 months


for 3 years that will start at the end of
5 years.

Prepared by: Checked by:


VAL DARYL ANHAO LEILANIE T. ABEDEJOS
Substitute Teacher Department Head

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