SENIOR HIGH SCHOOL

General Mathematics
Quarter 2 Module 1
Business Mathematics
and Logic
Lesson 1-9

i
DO_Q2_GENERALMATHEMATICS11_ MODULE1_LESSON1-9
Senior High School - General Mathematics
Alternative Delivery Mode
Quarter 2 – Module 1
Third Edition, 2022

Republic Act 8293, section 176 states that: No copyright shall subsist in any work of
the Government of the Philippines. However, prior approval of the government agency or office
wherein the work is created shall be necessary for exploitation of such work for profit. Such
agency or office may, among other things, impose as a condition the payment of royalties.

Borrowed materials (i.e., songs, stories, poems, pictures, photos, brand names,
trademarks, etc.) included in this module are owned by their respective copyright holders.
Every effort has been exerted to locate and seek permission to use these materials from their
respective copyright owners. The publisher and authors do not represent nor claim ownership
over them.

Published by the Department of Education

Development Team of the Module

Writers: Angelique O. Llanera, Nanette D. Parba, Rebecca M. Biñas, Niño Frensie B.

Batas, Oliver G. Mariano
Reviewers: Daisy Lyn F. Mariano, Rebecca M. Biñas
Editor: Marilyn B. Soriano
Illustrator: Nathaniel D.C. Del Mundo
Layout Artist: Oliver G. Mariano, Raphael A. Lopez
Management Team:
MELITON P. ZURBANO, Schools Division Superintendent
FILMORE A. CABALLERO, CID Chief
JEAN A. TROPEL, Division EPS In-Charge of LRMS
MARILYN B. SORIANO, Education Program Supervisor in Mathematics

Printed in the Philippines by ________________________

Department of Education – National Capital Region – SDO VALENZUELA

Office Address: Pio Valenzuela St., Marulas, Valenzuela City

Telefax: (02) 292 – 3247
E-mail Address: [email protected]

ii
 SENIOR HIGH SCHOOL

General Mathematics
(LEARNING AREA)
Quarter 2 Module
(QUARTER NUMBER)1
Lesson
(MODULE 1:
NUMBER)
Simple and Compound
Interests

iii
Introductory Message
This Self-Learning Module (SLM) is prepared so that you, our dear learners, can
continue your studies and learn while at home. Activities, questions, directions,
exercises, and discussions are carefully stated for you to understand each lesson.
Each SLM is composed of different parts. Each part shall guide you step-by-
step as you discover and understand the lesson prepared for you.
Pre-tests are provided to measure your prior knowledge on lessons in each
SLM. This will tell you if you need to proceed on completing this module or if you
need to ask your facilitator or your teacher’s assistance for better understanding of
the lesson. At the end of each module, you need to answer the post-test to self-check
your learning. Answer keys are provided for each activity and test. We trust that
you will be honest in using these.
In addition to the material in the main text. Notes to the Teacher are also
provided to our facilitators and parents for strategies and reminders on how they can
best help you on your home-based learning.
Please use this module with care. Do not Put Unnecessary marks on any part
of this SLM. Use a separate sheet of paper in answering the exercises and tests. And
read the instructions carefully before performing each task.
If you have any questions in using this SLM or any difficulty in answering the
tasks in this module, do not hesitate to consult your teacher or facilitator.
Thank you.

iv
Targets:
1. Illustrate simple and compound interests (M11GM-IIa-1); and
2. Distinguish between simple and compound interests (M11GM-IIa-2).

Choose the letter of the best answer. Write the chosen letter on a separate sheet of
paper.
1. What kind of interest is computed on the principal and also on the accumulated
past interests?
A. compound C. principal
B. interest rate D. simple
2. What kind of interest is computed on the principal and then added to it?
A. compound C. principal
B. interest rate D. simple
3. Which of the following refers to the amount after t years that the lender receives
from the borrower on the maturity date?
A. interest C. present value
B. maturity value D. principal
4. What do you call a person (or institution) who invests the money or makes the
funds available?
A. Creditor C. Both A and B
B. Lender D. None of the choices
5. What is the interest loan of P7,750 for one year if the interest is 4%?
A. P310 C. P8,060
B. P7,750 D. P31,000
6. If P40,000 is deposited in a savings account at an annual rate of 5%. What is the
amount in the account at the end of 5 years if interest is compounded annually?
A. P10,000 C. P50,000
B. P11,200 D. P51,200

1 (DO_Q2_GENMATH11_MODULE1_LESSON1)
7. Throughout the investment term, what do you call an interest that remains
constant?
A. annuity due C. ordinary annuity
B. compound D. simple
8. If t= 3 years; r= 8% simple interest and P = P 120,000.00 then what is the future
value?
A. P28,800 C. P148,800
B. P31,200 D. P151,200
9. What is r in the formula I= Prt?
A. rate of interest C. repaid
B. real value D. revenue
10. Which of the following refers to the amount of money borrowed or invested on
the origin date?
A. interest C. present value
B. maturity value D. principal
11. What do you call a person (or institution) who owes the money or avails of the
funds from the lender?
A. Borrower C. Lender
B. Creditor D. Both B and C
12. Yoru borrowed ₱160,000.00 from a loan firm with a rate of simple interest of
12%. How much will Yoru have to pay at the end of the 6 years?
A. P115,200 C. P275,200
B. P155,200 D. P315, 200
13. Which of the following refers to the date on which money is received by the
borrower.
A. compensation date C. origin date
B. maturity date D. repayment date
14. Jett saved P 20, 000.00 at 8% simple interest for 7 years. At the end of 7 years,
her account contains P 31, 200.00. What do you call P 31, 200.00?
A. interest C. principal
B. maturity value D. rate
15. The interest in the formula I = Prt is ___________________.
A. the percent interest for his year
B. the amount of money borrowed or deposited
C. the amount paid or earned for the use of money
D. the amount the bank owes you for being a customer at their bank

2 (DO_Q2_GENMATH11_MODULE1_LESSON1)
 Lesson Simple and Compound Interests
1

Everyday existence involves the usage of money. To purchase the things you need,
you engage in financial transactions. Perhaps you already learned the importance of
saving as a child. Once you reach adulthood, you could be required to open an
account with a real bank, where you will come across the term "interest." Even
though finding the interest is the bank's responsibility, it is essential to know what
it is and how it is calculated. In this module, you will learn the methods of solving
the value of money under simple and compound interest environments.

Cro$$word Puzzle
Complete the crossword puzzle by answering the questions below.

Across
2. the amount of money borrowed or invested on the origin date
4. the date on which money is received by the borrower

3 (DO_Q2_GENMATH11_MODULE1_LESSON1)
6. amount after t years that the lender receives from the borrower on the maturity
date
7. the amount paid or earned for the use of money
9. person (or institution) who invests the money or makes the funds available
Down
1. date on which the money borrowed or loan is to be completely repaid
3. person (or institution) who owes the money or avails of the funds from the lender
5. annual rate, usually in percent, charged by the lender, or rate of increase of the
investment
8. amount of time in years the money is borrowed or invested; length of time
between the origin and maturity dates

Due to the COVID-19 pandemic that resulted in a digital revolution, you

wanted to buy a new device so that you can cope in school but you do not have
enough savings to pay for it. How are you going to obtain that new device?
1. How do credit card companies earn income from their services?
2. How do banks, credit unions, and appliance retailers profit from their
customers?
When you borrow money, you are charged interest on the amount you
borrowed. What does it mean when a bank or credit card company charges interest?
The bank or company, being the lender, is the one earning the interest. The
customer, being the borrower, is the one who has to pay off the interest. Technically,
interest is defined as the price for the privilege of borrowing money; thus, it is often
referred to as interest earnings from the point of view of the lender.
To better understand the lesson, the terminologies and their meanings are listed
below.
Lender or creditor – person (or institution) who invests the money or makes the
funds available
Borrower or debtor – person (or institution) who owes the money or avails of the
funds from the lender
Origin or loan date – the date on which money is received by the borrower.
Repayment date or maturity date – date on which the money borrowed or loan is
to be completely repaid
Time or term (t) – amount of time in years the money is borrowed or invested; length
of time between the origin and maturity dates

4 (DO_Q2_GENMATH11_MODULE1_LESSON1)
Principal (P) – amount of money borrowed or invested on the origin date
Rate(r) – annual rate, usually in percent, charged by the lender, or rate of increase
of the investment
Interest (I) – amount paid or earned for the use of money
Maturity value or future value (F) –amount after t years that the lender receives
from the borrower on the maturity date

Simple Interest (Is)

For every financial transaction, whether you borrow money or invest a certain
amount, a corresponding percentage of the principal is being paid. Simple interest
is charged only on the loan amount called the principal. Thus, interest on the
interest previously earned is not included. Simple interest on the amount invested
or borrowed is computed based on the principal, interest rate, and length of time
for which the money is invested or borrowed.
Is = Prt
where Is = simple interest,
P = principal
r = rate of interest, and
t = time or term in years or fraction of a year
To find the maturity value,
Maturity Value or (Amount or Balance)
F = P + Is or F = P + Prt or F = P(1+rt)
where F = Maturity Value/Future Value
P = Principal
Is = Simple Interest

5 (DO_Q2_GENMATH11_MODULE1_LESSON1)
Example 1:

A self-employed photographer borrows ₱45,000 from a bank to buy new

equipment at a 6% simple interest rate payable within 5 years. How much will the
photographer have to pay after 5 years?

Amount Simple Interest

Time at the Interest Amount at the end of the
(t) start of rate (r) year t
year t Solution Answer

1 45,000 6% (45,000) (0.06) (1) 2700 45,000+2,700 = 47, 700

2 45, 000 6% (45,000) (0.06) (2) 5,400 45,000+5,400= 50, 400

3 45, 000 6% (45, 000) (0.06) (3) 8,100 45,000+8,100= 53, 100

4 45, 000 6% (45, 000) (0.06) (4) 10, 800 45,000+10,800= 55, 800

5 45, 000 6% (45, 000) (0.06) (5) 13, 500 45,000+13,500= 58, 500

Therefore, the photographer will have to pay P58,500 after 5 years.

Notice the simple interest remains constant throughout the year and you
only multiply it depending on the number of years that you are computing.
Therefore, if you are a borrower, be sure that the interest on your loan is not too
expensive for you; try to calculate it first before you apply for a loan. Compare the
interest rates and terms offered by various lending organizations before deciding on
a loan or investment.

Example 2:
How much interest will Paolo earn in his investment of 15,600 at 5% simple
interest for 4 years?
Solution:

The problem provides the following information: P = ₱15,600, r = 0.05, and

t = 4 years. Substitute these values to the formula of interest, Is = Prt.
We have,
Is = Prt

Is = (₱15,600) (0.05) (4)

Is = ₱3,120

Therefore, Paolo’s investment will earn an interest of ₱3,120.

6 (DO_Q2_GENMATH11_MODULE1_LESSON1)
Example 3:

Kathryn borrowed ₱30,000 from a friend to help fund her small business,
with the agreement that she would pay back the money plus interest at the end of
nine months at a rate of 3.5%. How much did Kathryn pay her friend?
Solution:
The problem provided us with the following information:
9
P = ₱30,000 r = 0.035% t = 0.75 years or (9 months)
12

Notice that the time was divided by 12 if the given is in months.

To solve for the required final amount, compute for the interest first and
use the obtained value to compute for the final amount. Thus,
Is = Prt

Is = (₱30,000) (0.035%) (0.75 years)

Is = ₱787.50

F=P+I

F = ₱30,000 + ₱787.50

F = ₱30,787.50

Therefore, Kathryn has to pay her friend ₱30,787.50.

Compound Interest (Ic)

For many long-term financial transactions, compound interest is used
instead of simple interest. In this type of interest, the principal increases by adding
the interest earned in each interval over a period of time.

Let's say you obtain a ₱2,500 loan from a lender. The interest is 5% of
₱2,500, or ₱125, after one year. Therefore, the loan balance is ₱2,625 after a year.
The lending company credited 5% of the ₱2,625 for interest in the second year (the
principal plus the interest earned in the first year). The amount of the loan then,
after two years, will be ₱2,625 + (0.05) (₱2,625), which is equal to ₱2,756.25. Interest
computed in this manner is called compound interest.

7 (DO_Q2_GENMATH11_MODULE1_LESSON1)
Example 1:

A self-employed photographer borrows ₱45,000 from a bank to buy new

equipment at a 6% compounded annually payable within 5 years. How much will
the photographer have to pay after 5 years?

Amount Compound Interest

Time at the Interest Amount at the end of the
(t) start of rate (r) year t
year t Solution Answer

1 45,000 6% (45,000)(0.06)(1) 2,700 45,000+2,700 = 47,700

2 47,700 6% (47,700)(0.06)(1) 2,862 47,700+2,862 = 50,562

3 50,562 6% (50,562)(0.06)(1) 3,033.72 50,562+3,033.72= 53,595.72

4 53,595.72 6% (53,595.72)(0.06)(1) 3,215.74 53,595.72+3,215.74=56,810.74

5 56,810.74 6% (56,810.74)(0.06)(1) 3,408.64 56,810.74+3,408.64=60,219.38

Therefore, the photographer will have P60,219.38 in his account after 5

years.
As shown in the table, compound interest includes the interest from the
current year and is added to the principal at the start of the following year, which
means that the previous interest earns interest as well, together with the principal.
So simple interest yields less interest than compound interest. At the end of five
years, the sum is P58,500 in simple interest and P60,219.38 in compound interest.
Therefore, if you are a borrower, be sure that the interest on your loan is
reasonable, and if you could somehow find a lender who gives simple interest, do so
rather than one who offers compound interest. However, if you are an investor,
learn to place your money in investments that will result in bigger returns like
compound interests.

The formula to calculate the future value of compound interest is given by

F = P(1+r) t

where:

F = future value
P = principal amount
r = compound interest rate

8 (DO_Q2_GENMATH11_MODULE1_LESSON1)
 t = time or time in years

Also, to find the compound interest, just deduct the principal (P) from the
computed future value (F).
Ic = F – P
Example 2:
On July 14, 2015, a newly married couple invested P360,000 in an
account that pays 12% compounded annually for the purchase of a house and lot.
How much will the couple have on July 14, 2021?
Solution:
The problem provides the following information: P = ₱360,000, r = 0.12, and
t = 6 years. Substitute these values to the formula, F = P(1+r) t.

We have,
F = P(1+r) t
F = ₱360 000 (1+0.12)6
F = ₱360 000 (1.12)6
F = ₱360 000 (1.97)
F = ₱709, 200

Therefore, the newly married couple will have ₱709, 200 on July 14, 2021.

Example 3:
Find the maturity value and the compound interest if P = 20,000 is
compounded annually at an interest rate of 3% in 5 years.
Solution:
Maturity value can be computed by substituting the given P = ₱20,000, r =
0.03, and t = 5 years to the formula, F = P(1+r) t. Thus, we have

F = P(1+r) t

F = P20,000(1+0.03)5

F = P20,000(1.03)5

F = P20,000(1.16)

F = P23,200

9 (DO_Q2_GENMATH11_MODULE1_LESSON1)
 Then determine the interest by substituting the obtained maturity value to
the formula, Ic = F – P. Hence,

Ic = F – P

Ic = P23,200 – P20,000

Ic = P3,200

Therefore, the maturity value and the compound interest are P23,200 and
P3,200, respectively.

Example 4:

Determine the compound amount and interest of P15,700 invested at 10%

compounded annually for 8 years.

Solution:
Jacob borrowed P12,500 from Joseph at 10% compounded annually
for 15 months. How much will Joseph receive at the end of the term?

Solution:

The problem requires us to solve the final amount. Thus, substitute the
following information to the formula:

15
P = P12,500 r = 0.10 t= = 1.25 years
12

F = P(1+r) t

F = P12,500(1+0.10)1.25
F = P12,500(1.10) 1.25
F = P12,500(1.13)
F = P14,125
Therefore, Joseph will receive P14,125 at the end of the term.

10 (DO_Q2_GENMATH11_MODULE1_LESSON1)
Activity 1.1
Write SI if the given problem involves Simple Interest and CI if the given problem
involves Compound Interest. Write your answers on a separate sheet/s of paper.
1. To buy a new device for an online class, Alexa decided to borrow ₱5,000 at a 5 %
yearly interest rate. After two years, she must pay ₱500 for the interest.
2. Mang Tanny took out a loan for ₱10,000 at a 2% interest rate compounded
quarterly to get the financing he needed for a small food company. Therefore, after
two years, he will have to pay ₱10,407.07.
3. Faith takes out a loan of ₱57,300 to buy culinary supplies for her new home. She
settles her debt with a 30-month term and a 5.4% interest rate.
4. Chelsea obtained a ₱20,000 loan from a bank with a 4% interest rate. Three years
later, she pays the bank ₱22,400.
5. Anna invested ₱12,000 five years ago in savings account with a 4.5% yearly
compound interest rate. Anna currently has savings worth ₱14,954.18.
Activity 1.2.
A. Complete the table below by solving the unknown quantities.

Principal (P) Rate (r) Time (t) Interest (Is) Maturity Value

P7,200 6% 18 months (a) (b)

P36,800 8.25% 3 years (c) (d)

P130,790 12% 10 years (e) (f)

B. Complete the table below by solving the unknown quantities.

Principal (P) Rate (r) Time (t) Interest (Ic) Maturity Value

P5,000 3% 8 years (a) (b)

P12,000 6.05 % 15 months (c) (d)

P325,000 18% 4.5 years (e) (f)

11 (DO_Q2_GENMATH11_MODULE1_LESSON1)
Activity 1.3.
Give the term for each value in relation to the problem.
Nathan deposits P 70,000.00 in a savings account and leaves it there for 7 years to
accumulate interest at 7% compounded annually.
1. P70,000 _____________
2. 7 years _____________
3. 7% _____________
4. P112,700 _____________
5. P42,700 _____________

Fill out the comparison chart below for simple interest vs. compound
interest.

Basis for Comparison Simple Interest Compound Interest

Definition
Formula
Interest
Principal

Answer the following as indicated. Show your complete solution and answer on a
separate sheet/s of paper.
1. Consider winning P100,000 and you plan to invest it for 8 years. A cooperative
organization offers 3% simple interest rate per year. A bank provides an annual
compound interest rate of 3%. Which will you choose and why?

Multiple Choice. Choose the letter of the best answer. Write the chosen letter on a
separate sheet of paper.
1. Which of the following type of interest is beneficial for a borrower?
A. complex C. mixed

12 (DO_Q2_GENMATH11_MODULE1_LESSON1)
 B. compound D. simple
2. Which of the following scenario illustrates the use of simple interest?
A. Ricardo pays an increasing rate of interest for his bank loan.
B. Rica pays P700 a month for 6 months as interest for her bank loan.
C. Kimberly pays P221, P235, and P252 as interest for her personal loan.
D. Jerry pays different amounts of interest each period for his house loan.
3. Rate of interest (r) must be converted into ________ before substituting to the
formula of finding the interest.
A. decimals C. mixed numbers
B. fractions D. percentage
4. Which of the following best reflects the statement: The interest from the previous
year also earns interest?
A. compound C. simple
B. rate D. rate
5. If P = P65, 000.00; r = 6% compounded annually and t = 8 years, then what is
the compound interest?
A. P34,450 C. P68,900
B. P38,350 D. P103,350
6. Which type of interest should you prioritize if you are an investor?
A. complex C. mixed
B. compound D. simple
7. Which of the following refers to the interest charged on the principal alone for
the entire duration or period of the loan or investment.
A. Compound amount C. Interest rate
B. Compound interest D. Simple interest
8. If Joji invested P54,708.00 in a bank and ended up with P86,795.00 at the end
of the term, how much was the interest?
A. P32,087 C. P86,795.00
B. P54,708.00 D. P141, 503
9. How much interest is charged when you borrowed PHP 70,000 for 6 months at
an annual interest rate of 8%?
A. 933.33 C. 2,800
B. 1,458.33 D. P33, 600

13 (DO_Q2_GENMATH11_MODULE1_LESSON1)
10. Which of the following describes rate (r)?
A. It is the amount paid or earned for the use of money.
B. It is charged by the lender or the rate of increase of the investment.
C. It is the amount of money borrowed or invested on the origin date.
D. It is computed on the principal and also on the accumulated past
interests.
11. Mark loan an amount at 12% simple interest for 4 years. If he needs to pay
P93,000.00 at the end of the term, what do you call the 12%?
A. interest C. rate
B. principal D. time
12. Rhea borrowed an amount at 4.5% simple interest for 5 years. If she is asked to
pay P60,000.00 at the end of the term, what do you call the P 60,000.00?
A. interest C. principal
B. maturity value D. rate
13. If t= 6 years; r= 4% simple interest and P = P 55,000.00 then what is the future
value?
A. P13,200 C. P68,200
B. P14,850 D. P69,850
14. Which of the following is not favorable when dealing with compound interest?
A. borrower of a loan
B. stock market investor
C. investor of a retirement fund
D. one who deposits money in a bank
15. At an annual compound rate of 8%, Arvie took out a loan for PHP 175,000.
What will be his payment in five years?
A. P70,000 C. P245,000
B. P82,250 D. P257,250

14 (DO_Q2_GENMATH11_MODULE1_LESSON1)
I. Solve the following:
1. Mr. Domingo borrowed P20,000 from a loaning firm to start an online
selling business. If the firm charges simple interest at an annual rate of 4%, how
much must Mr. Domingo pay if he promised to return the money with the interest
in four years?
2. Raquel borrowed P67,898 in September 21, 2018 from a bank that
charges an 8.5% compounded annually. How much must she pay in September 21,
2021?
II. Consider yourself a bank employee who promotes financial planning among
clients. Your bank manager asked you to form a group and come up with a slogan
for this savings campaign. To encourage customers to create a savings account at
the bank where you work, come up with a catchy term or slogan.

15 (DO_Q2_GENMATH11_MODULE1_LESSON1)
(DO_Q2_GENMATH11_MODULE1_LESSON1) 16
What’s In
Across
2. Principal
4. Origin date
6. Maturity value
7. Interest
9. Lender
Down
1. Maturity date
What I Know 3. Borrower Assessment
1. A 5. Rate 1. D
2. D 8. Time 2. B
3. B What’s More 3. A
4. C Activity 1.1 4. A
5. A 1. SI 5. B
6. D 2. CI 6. B
7. D 3. SI 7. D
8. C 4. SI 8. A
9. A 5. CI 9. C
10. D Activity 1.2 10. B
11. A A. B. 11. C
12. C a. P648 a. P1,350 12. B
13. C b. P7,848 b. P6,350 13. C
14. B c. P9,108 c. P960 14. A
15. C d. P45,908 d. P12,960 15. D
e. P156,948 e. P360,750
f. P287,738 f. P685, 750
Activity 1.3
1. Principal
2. Time
3. Rate
4. Maturity Value
5. Compound Interest
Aoanan, G. O., Plarizan, M. L. P., Regidor, B. T., & Simbulas, L. J. C. (2016). General

mathematics for senior high school. Van Haren Publishing.

Dimasuay, L., Alcala, J., & Palacio, J. (2016). General Mathematics. C&E Publishing Inc.

Oronce, O. A. (2016). General Mathematics (First ed.). REX Book Store.

17 (DO_Q2_GENMATH11_MODULE1_LESSON1)
 SENIOR HIGH SCHOOL

General Mathematics
(LEARNING AREA)
Quarter 2 Module 1
Lesson
(QUARTER 2:
NUMBER)
Interest, Maturity
(MODULE NUMBER) Value,
Future Value, and Present
Value in Simple and
Compound Interest

18 (DO_Q2_GENMATH11_MODULE1_LESSON2)
Targets:
1. Computes interest, maturity value, future value, and present value in simple
interest and compound interest environment (M11GM-IIa-b-1); and
2. Solves problems involving simple and compound interest. (M11GM-IIb-2).

Choose the letter of the best answer. Write the chosen letter on a separate sheet of
paper.
1. The present value of simple interest will be calculated using what formula?
𝑟𝑡
A. P = Irt C. P =
𝐼
𝐼𝑟 𝐼
B. P = 𝑡
D. P = 𝑟𝑡

2. If the investment amounting to ₱45,000 earned an interest of ₱5,500 how much

will be the maturity value?
A. ₱40,000 C. ₱50,000
B. ₱40,500 D. ₱50,500
3. Which of the following is the formula to find the simple interest?
𝐹
A. Is = (1+𝑟)𝑡
C. Is = Prt

B. Is = P(1 + r)t D. Is = F − P
4. Given that P = ₱7,830, r = 15% and t = 7 years, find the simple interest.
A. P167.79 C. P8,221.50
B. P7,457.14 D. P822,150
5. What is the frequency of conversion if the annual rate is compounded monthly?
A. 2 C. 4
B. 3 D. 12
6. What is the frequency of conversion if the annual rate is compounded semi-
annually?
A. 2 C. 4
B. 3 D. 12
7. If the interest rate is 7% compounded quarterly, what is the interest rate per
conversion period?
A. 0.58% C. 3.5%

19 (DO_Q2_GENMATH11_MODULE1_LESSON2)
 B. 1.75% D. 28%
8. Given that Is = 880, r = 3% and t = 5 years, what is the principal or present
value?
A. P132 C. P1,466.67
B. P528 D. P5,866.67
9. If F = ₱45,000 and P = ₱40,000, how much is the compound interest?
A. P5,000 C. P15,000
B. P10,000 D. P20,000
10. Maine borrowed PHP 560,000 from a lending company for her business. The
company offers a 7% interest rate compounded annually for 4 years. Compute the
maturity value.
A. P156,800 C. P716, 800
B. P173,600 D. P733, 600
For numbers 11 – 12, use the following values: F = 60,000, t = 4 years, i4 = 0.05
and m= 4
11. What is the present value?
A. P48,000.00 C. P72,930.38
B. P49,180.33 D. P73,193.37
12. How much is the compound interest?
A. P10,819.67 C. P12,930.38
B. P12,000.00 D. P13,193.37
13. If the maturity value is ₱56,000 and the compound interest is ₱3,890, how
much is the present value?
A. P52,110 C. P59,890
B. P56,000 D. P60,000
For numbers 14 – 15, use the following values: P = ₱87,000, i12 = 3%, t = 6 years,
m = 12.
14. How much is the maturity value?
A. P86,783.04 C. P103,530
B. P102,660 D. P104,400
15. How much is the compound interest?
A. P216.96 C. P16,530
B. P15,660 D. P17,400

20 (DO_Q2_GENMATH11_MODULE1_LESSON2)
 Lesson Interest, Maturity Value, Future
2 Value, and Present Value in Simple
and Compound Interest

Money deposited in a bank's savings account accumulates over time. This is because
the bank is using your money to conduct business after paying you a charge (with
several guidelines and standards to ensure that you don't lose your money). This
extra growth is called interest.

People with bank accounts, loans, credit cards, investments, and other financial
accounts are familiar with the fundamental idea of interest. Despite having heard
of this idea, some individuals find it challenging to understand how interest should
be calculated. In this lesson, you will learn more about the financial ideas of simple
and compound interests.

In your previous module, you learned how to compute simple and compound
interest. In this activity, your task is to calculate the interest to complete the
puzzle.
Activity: Cro$$ Number
Complete the cross-number puzzle below.

21 (DO_Q2_GENMATH11_MODULE1_LESSON2)
 Across Down
2. Find Ic; P = 43800, r = 4%, t = 2 1. Find Ic; P = 7300, r = 7%, t = 3
3. Find Is; P = 210, r = 8%, t = 7 4. Find Is; P = 20600, r = 8%, t = 2
5. Find Ic; P = 18000, r =9%, t = 6 7. Find Is; P = 2300, r = 7%, t = 9
6. Find Ic; P = 1500, r = 7%, t = 3 8. Find Ic; P = 1240, r = 8%, t = 2
8. Find Is; P = 14000, r = 6%, t = 9
9. Find Is; P = 4000, r = 3%, t = 4

Let's say you have PHP 5,000 today and wanted to turn it into PHP 1 million.
Certainly, sounds ambitious. Is it attainable, though? Sure, it is! How long will it
take for your PHP 5,000 to turn into PHP 1 million if you want to put it in a bank
that gives a 4.4 percent interest rate?

1. Which of the following option is preferable?

Option 1: Invest it on annual simple interest
Option 2: Invest it on annual compound interest
2. Will you succeed in making it while you're still alive or not?

Simple interest is calculated on the principal amount or original amount of money.

The word “simple” means that the interest that can be earned is directly from the
principal amount invested or borrowed. In computing the simple interest and other
related components, the formula is

Is = Prt

where:

Is = simple interest

P = principal or the amount invested or borrowed or present value

22 (DO_Q2_GENMATH11_MODULE1_LESSON2)
 r = interest rate

t = time or term in years

The formula of the simple interest can be a basis to derive the unknown principal
amount, rate, and time.

The formula for finding the principal amount

𝐼𝑠
P=
𝑟𝑡

The formula for finding the rate

𝐼𝑠
r=
𝑃𝑡

The formula for finding the time

𝐼𝑠
t=
𝑃𝑟

To find the maturity (future) value, you can use either of the following:

F= P(1+rt) or
F= P +Is

To find the present value, you can use the formula

𝐹
P=
(1+𝑟𝑡)

where:

F = maturity (future) value

Is = simple interest

P = principal or the amount invested or borrowed or present value

r = interest rate

t = time or term in years

23 (DO_Q2_GENMATH11_MODULE1_LESSON2)
As an example, consider the following:

Example 1: Given P = 25,000, r = 4%, t = 6. Find simple interest (Is)

Solution:

Use the formula of Simple Interest Is = Prt

Substitute the given to the formula Is = 25,000(0.04)(6)

Perform the operations Is = 6,000

Therefore, the simple interest is P6,000.

Example 2: Given P = 40,000, Is = 300, t = 3 months. Find rate (r)

Solution:

𝐼𝑠
Use the formula in finding the rate r=
𝑃𝑡

300
Substitute the given to the formula r= 1
(40,000)( )
4

3 𝑚𝑜𝑛𝑡ℎ𝑠 1
Hint: time must be expressed in years so 3 months will become 12 𝑚𝑜𝑛𝑡ℎ𝑠
= 4 𝑦𝑒𝑎𝑟

Perform the operations r = 0.03

Express your answer in percent r = 3%

Therefore, the rate of interest is 5%.

Example 3: Given P = 75,000, Is = 7,500, r = 2%. Find time (t)

Solution:

𝐼𝑠
Use the formula in finding the time t= 𝑃𝑟

7,500
Substitute the given to the formula t= (75,000)(0.02)

Perform the operations t=5

Therefore, the term or time in years is 5 years.

Example 4: Given P = 64,500, r = 6%, t = 4. Find maturity (future) value (F).

Solution:

Use the formula of maturity value F= P(1+rt)

24 (DO_Q2_GENMATH11_MODULE1_LESSON2)
 Substitute the given to the formula F = 64,500(1 + (0.06)(4))

Perform the operations F = P79,980

Alternative Solution:

Solve first the simple interest Is = (64,500)(0.06)(4)

Is = 15,480

Use the formula F = P + Is F = 64,500 + 15,480

Therefore, the maturity value is P79,980.

Example 5: Given F = P158,755.20, r = 12%, t = 7 years. Find the present value (P).

Solution:

𝐹
Use the formula in finding the present value P=
(1+𝑟𝑡)

P158,755.20
Substitute the given to the formula P=
(1+(0.12)(7)

Perform the operations P = P86,280

Therefore, the present value is P86,280.

C o m p o u n d I n t e r e s t, also known as "interest on interest," is calculated on

the principal amount and also on the accumulated interest of previous periods.

The following formula will be taken into account to have a better grasp of what
compound interest is.

To find the compound interest, which is compounded annually the formula to find
the maturity value is:

F = P(1+r)t

where:

F = maturity (future) value

P = principal or present value

r = interest rate

t = time or term in years

25 (DO_Q2_GENMATH11_MODULE1_LESSON2)
To find the compound interest use the formula:

Ic = F - P

where:

Ic = compound interest

P = principal or present value

F = maturity (future) value

To find the present value or principal of the maturity value F due in t years the
formulas are:

P=
𝐹 P = F(1+r)-t
(1+𝑟)𝑡
or

Example 1: Given P = P25,000, r = 3% and compounded annually for 3 years, find

the maturity value (F) and the compound interest (Ic).

Solution:

Use the formula of maturity value F = P(1+r)t

Substitute the given to the formula F = 25,000(1+0.03)3

Perform the operations F = P27,318.18

Apply the formula of compound interest Ic = F – P

Ic = 27,318.18 – 25,000

Perform the operation Ic = P2,318.18

Therefore, the maturity value is P27,318.18 and the compound interest is

P2,318.18.

Example 2: Given F = P47,500, r = 4% and compounded annually for 5 years, find

the present value (P).

Solution:

26 (DO_Q2_GENMATH11_MODULE1_LESSON2)
 𝐹
Use the formula in finding the present value P = (1+𝑟)𝑡

47,500
Substitute the given to the formula P = (1+0.04)5

Perform the operations P = P39,078.37

Therefore, the present value is P39,078.37

Compounding More Than Once a Year

Interest may be compounded on a semi-annual, quarterly, monthly, daily,

or even continuous basis. Calculations of future and present value are both affected
by interest that is compounded more than once year. In this case, additional terms
must be defined such as:

Frequency of conversion (m) - number of conversion period in one year

Conversion or interest period – time between successive conversions of interest

Total number of conversion periods (n)

n = mt = (frequency of conversion) x (time in years)

Nominal rate (im) - annual rate of interest

𝑖𝑚 𝑎𝑛𝑛𝑢𝑎𝑙 𝑟𝑎𝑡𝑒 𝑜𝑓 𝑖𝑛𝑡𝑒𝑟𝑒𝑠𝑡

Rate of interest for each conversion period j = =
𝑚 𝑓𝑟𝑒𝑞𝑢𝑒𝑛𝑐𝑦 𝑜𝑓 𝑐𝑜𝑛𝑣𝑒𝑟𝑠𝑖𝑜𝑛

The common compounding or conversion frequencies and the corresponding

compounding or conversion periods encountered are listed in table below.

Compounding or No. of compounding or Compounding or

conversion frequency conversion per year conversion period
Annual 1 1 year
Semi - annual 2 6 months
Quarterly 4 3 months
Monthly 12 1 month

FINDING THE MATURITY AND PRESENT VALUE IN COMPOUND INTEREST

The maturity (future) value, compounding m times a year can be computed using the

formula
F = P(1+j)n

𝑚
27 + 𝑖 )mt(DO_Q2_GENMATH11_MODULE1_LESSON2)
F = P(1 𝑚
where:

F = maturity (future) value

P = principal

im = nominal rate of interest (annual rate)

m = frequency of conversion

t = term/time in years

Meanwhile, to find the present value, you can use the formula:

𝐹
P= (1+𝑗)𝑛

As an example, consider the following:

Example 1: Given P = 65,000, i4 = 4%, m = 4, t = 6. Find the maturity value (F) and
compound interest (Ic).

Solution:

Use the formula of maturity value F = P(1+j)n

Solve for n and j n = mt; n = 4(6); n = 24

𝑖4 0.04
j= 𝑚
;j= 4
; j = 0.01

Substitute the values of the known variables F = 65,000(1+0.01)24

Perform the operations F = P92,532.75

Use the formula of compound interest Ic = F – P

Substitute the values of F and P Ic = 92,532.75 - 65,000

Perform the operation Ic = P27,532.75

Therefore, the maturity value is P92,532.75 and the compound interest is

P27,532.75.

Example 2: Given F = P78,619.11, i2 = 6%, m = 2, t = 5. Find the compound interest

(Ic).

28 (DO_Q2_GENMATH11_MODULE1_LESSON2)
Solution:

𝐹
Use the formula of maturity value P= (1+𝑗)𝑛

Solve for n and j n = mt; n = 2(5); n = 10

𝑖2 0.06
j= ;j= ; j = 0.03
𝑚 2

78,619.11
Substitute the values of the known variables P= (1+0.03)10

Perform the operations P = P58,500.00

Use the formula of compound interest Ic = F – P

Substitute the values of F and P Ic = 78,619.11 – 58,500.00

Perform the operation Ic = P20,119.11

Therefore, the present value is P58,500.00 and the compound interest is

P20,119.11.

Activity 1.1: Complete the table below by finding the missing value.

Maturity
Interest (Is) Principal (P) Rate (r) Time (t)
Value

1. __________ P5,000 2% 2 years 2. __________

P45 3. ___________ 3% 3 months 4. ____________

P1,980 5. ___________ 5.5% 6. ____________ P10,980

P6,000 7. ___________ 8. ___________ 5 years P21,000

29 (DO_Q2_GENMATH11_MODULE1_LESSON2)
Activity 1.2: Complete the table to find the compound amount of P 70,000.00
invested at 7% interest.

Conversion Frequency In 3 years In 6 years In 12 years

Compounded annually 1. ____________ 5. ____________ 9. ___________

Compounded semi-annually 2. ____________ 6. ____________ 10. _________

Compounded quarterly 3. ____________ 7. ____________ 11. _________

Compounded monthly 4. ____________ 8. ____________ 12. _________

Activity 1.3: Find the value of the required components in each item.
1. Find the simple interest and maturity value if P = ₱29,000, r = 0.6% and t = 4
months.
2. If Is = ₱789, r = 5% and t =2 years, find the present value.
3. Find the compound interest and maturity value if P = ₱67,000, with a rate of 6%
is compounded semi-annually for 8 years.
4. Find the compound interest and present value if F = ₱73,000 with a rate of 3.5%
is compounded quarterly for 6 years.

Let’s recall all the topics you have learned so far. Provide the correct answer for
each blank.

Topic Basic Concepts

Simple Interest (Is) is calculated as a
percentage of the original
Calculating Simple Interest amount borrowed or deposited over a
period of time. The formula in finding
the simple interest is (a) _____________.
When the time period of a loan reaches
its maturity date, the loan is said to
mature. In that period, the borrower
repays the principal and the interest.
Maturity Value with Simple Interest
The total repayment is known as the
maturity value (or future value). The
formula in finding the maturity value is
(b) _____________.

30 (DO_Q2_GENMATH11_MODULE1_LESSON2)
 For Present value (P), we have the
formula (c) ______________________.
In finding the rate (r), we use the
Finding the Present Value, Rate and
formula (d) ______________________.
Time in Simple Interest.
In finding the time (t), we use the
formula (e) ______________________.

The formula for compound interest (Ic)

Compound Interest
is (f) ___________________________.
Finding the Present Value at The formula in finding the present
Compound Interest value is (g) ________________________.
The maturity (future) value,
compounding m times a year can be
Compounding More Than Once a Year computed using the formula

(h) ______________________.

Read and analyze the situation below then answer the question that follows.
1. In one and a half years, Tesmari intends to build a house. She has P15,000 in a
savings account with an interest rate of 2% compounded quarterly. After 18
months, how much will Tesmari have in her savings account? Calculate and fill in
the chart below.

Months Principal (P) Interest P+I

3 P15, 000

12

15

18

2. How can compound interest help Tesmari in achieving her financial goal?

31 (DO_Q2_GENMATH11_MODULE1_LESSON2)
3. Tesmari wants to talk to her nephew, a freshman in high school, about the risk-
reward relationship which is about the direct relationship between risk of the loss
of principal and the expected rate of return. The higher the risk of loss of principal
for an investment, the greater the potential reward. Conversely, the lower the risk
of loss of principal for an investment, the lower the potential reward. If you were
Tesmari, how would you explain this relationship?

Multiple Choice. Choose the letter of the best answer. Write the chosen letter on a
separate sheet of paper.
1. Which among the following is the formula to obtain the simple interest?
A. 𝐹 = 𝑚𝑎 C. 𝐼𝑠 = 𝑃(1 + 𝑟𝑡)

B. 𝐼𝑠 = 𝑃𝑟t D. 𝐼𝑐 = 𝑃(1 + 𝑟𝑡)

2. What is the simple interest if P = P3,500, r = 3.5% and t = 4 years?

A. P490 C. P4,016.33
B. P3,990 D. P49,000
3. What will you get if you divide the simple interest by the product of the rate and
time?
A. maturity value of compound interest
B. maturity value of simple interest
C. present value of compound interest
D. present value of simple interest
4. If the investment amounting to P 85,000 earned an interest of P 7,600 how
much will be the maturity value?
A. P 7,600 C. P85,000
B. P77,400 D. P92,600
5. Given that P = P 23,450, r = 2.55% and t= 6 years, find the simple interest.
A. P3,587.85 C. P27,274.50
B. P27,037.85 D. P358,785.00
For item 6-8: Given the formula of the simple interest 𝐼𝑠 = 𝑃𝑟𝑡,
6. What will be the equation if the rate r is unknown?
𝑃𝑡
A. 𝑟 = 𝐼𝑠 – 𝑃t C. 𝑟 = 𝐼𝑠

𝐼𝑠
B. 𝑟 = 𝐼𝑠 + 𝑃t D. 𝑟 =
𝑃𝑡

32 (DO_Q2_GENMATH11_MODULE1_LESSON2)
7. What will be the equation if the Principal P is unknown?
𝑟𝑡
A. P = 𝐼𝑠 – rt C. P =
𝐼𝑠

𝐼𝑠
B. P = 𝐼𝑠 + rt D. P =
𝑟𝑡

8. What will be the equation if the time t is unknown?

𝑃𝑟
A. t = 𝐼𝑠 –Pr C. t = 𝐼𝑠

𝐼
B. t = 𝐼𝑠 + Pr D. t = 𝑃𝑟𝑠

9. Given the principal amount P = 34,985, r = 3% and t = 5 years. Compute the

maturity value of annual compound interest.
A. P5,247.75 C. P40,232.75
B. P5,597.60 D. P40,582.60
10. What is the frequency of conversion if the annual rate is compounded
quarterly?
A. 2 C. 4
B. 3 D. 12
11. If the interest rate is 8% compounded quarterly, what is the interest rate per
conversion period?
A. 0.02% C. 2%
B. 0.2% D. 32%
For numbers 12 – 13, use the following values: F = 175,000, t = 4 years, i2 = 6.7%
and m = 2.
12. What is the present value?
A. P17,343.90 C. P134,615.38
B. P104,166.67 D. P221,900.00
13. How much is the compound interest?
A. P40,384.62 C. P70,833.33
B. P46,900.00 D. P157,656.10
For numbers 14 – 15, use the following values: P = ₱45,000, i2 = 2.3%, t = 5 years,
m=2.
14. How much is the maturity value?
A. P40,178.57 C. P50,400.00
B. P50,175.00 D. P133,647.61
15. How much is the compound interest?
A. P4,821.43 B. P5,175.00 C. P5,400.00 D. P88,647.61

33 (DO_Q2_GENMATH11_MODULE1_LESSON2)
The goal of Ms. Canona and Mr. Nikono's business venture was to establish a
photography studio where clients could take their own pictures. To properly fund the
projected business, they need PHP 450,000, which they plan to borrow from a local
lending institution. The lending institution has two options, which are as follows:
Option 1: They will offer an annual simple interest rate of 18% however they
will pay interest every end of the year for 8 years.
Option 2: They will offer an annual compound interest rate of 8% for 5 years
and they will pay for it after the term.
Task:
1. Calculate the value of each offer in options 1 and 2.
2. Which choice will Ms. Canona and Mr. Nikono find less favorable?

34 (DO_Q2_GENMATH11_MODULE1_LESSON2)
(DO_Q2_GENMATH11_MODULE1_LESSON2) 35
What’s In
Across
2. 3574
3. 3276
5. 12188
6. 338
8. 21560
9. 4480
Down
What I Know 1. 1643 Assessment
1. D 4. 23896 1. B
2. D 7. 3745 2. A
3. C 8. 206 3. D
4. C What’s More 4. D
5. D Activity 1.1 5. A
6. A 1. P200 6. 6 years 6. D
7. B 2. P5,200 7. P15,000 7. D
8. D 3. P6,000 8. 8% 8. D
9. A 4. P6,045 9. D
10. D 5. P9,000 10. C
11. B Activity 1.2 11. C
12. A 1. P85, 753.01 7. P106, 151 12. C
13. A 2. P96, 047. 87 8. P106, 407.39 13. A
14. D 3. P96, 200.75 9. P157, 653.41 14. C
15. D 4. P96, 304.79 10. P159, 832.99 15. C
5. P105, 051.12 11. P160,971.91
6. P105, 774.81 12. P161, 750.45
Activity 1.3
1. Is = P696; F = P29,696
2. P = P7,890
3. Ic = P40,515.33; F = P107,515.33
4. P = P59,226.72; Ic = P13,773.28
Aoanan, G. O., Plarizan, M. L. P., Regidor, B. T., & Simbulas, L. J. C. (2016). General

mathematics for senior high school. Van Haren Publishing.

Dimasuay, L., Alcala, J., & Palacio, J. (2016). General Mathematics. C&E Publishing Inc.

Oronce, O. A. (2016). General Mathematics (First ed.). REX Book Store.

36 (DO_Q2_GENMATH11_MODULE1_LESSON2)
 SENIOR HIGH SCHOOL

General Mathematics
(LEARNING AREA)
Quarter 2 Module
(QUARTER NUMBER)1
Lesson
(MODULE 3:
NUMBER)
Simple and General
Annuities

37 (DO_Q2_GENMATH11_MODULE1_LESSON2)
Targets:
1. Illustrates simple and general annuities (M11GM-IIc-1);
2. Distinguishes between simple and general annuities(M11GM-IIc-2); and
3. Finds the future values and present value of both simple annuities and
general annuities (M11GM-IIc-d-1).

Write the letter of the correct answer.

1. Which keywords show if an annuity is Simple or General?
a. Simple payments are made at the start of the term; General payments are
made at the end.
b. If Payments are being made it is Simple if there are no payments being
made it is General.
c. It is Simple if annual payments equal annual compounding; else, it is
General.
d. There's no way of knowing, math is a mystery.

2. How can we tell if the query is about annuities?

a. You are consistently paying your debts.
b. Compound interest is used.
c. A percentage change has been made to a number.
d. Interest is compounding.

3. What keywords indicate if an annuity is Ordinary or Due?

a. Payments made at the end of a period are considered Ordinary; payments
made at the beginning are considered Annuity Due.
b. If annual payments and annual compounding are equal, the situation is
considered ordinary; otherwise, it is due.
c. Regular payments are considered Ordinary, whereas missed payments
are considered Due.
d. Toss a coin and cross your fingers.

4. What kind of annuity are you looking at if you invest 10,000Php at the end
of each quarter?
a. General
b. Simple
c. Ordinary
d. Due

38 (DO_Q2_GENMATH11_MODULE1_LESSON3)
5. What kind of annuity is it if a pension plan pays you 150,000Php at the
start of the year?
a. General
b. Simple
c. Ordinary
d. Due

6. What kind of annuity is it if you invest at a rate of 1.4% per month?

a. General
b. Simple
c. Ordinary
d. Due

7. Which type of annuity would you receive if you won the lottery and received
250,000Php per month at a rate of 0.2 percent compounded annually?
a. General
b. Simple
c. Ordinary
d. Due

8. Every month for three years, you put 5,000Php into your bank. It increases
by 2% compounded monthly. What certain type of annuity is this?
a. Simple Ordinary Annuity
b. Simple Annuity Due
c. General Ordinary Annuity
d. General Annuity Due

9. What kind of annuity is it if you earn $1500 in interest income at the end of
each quarter and interest is compounded at a rate of 6%?
a. Simple Ordinary Annuity
b. Simple Annuity Due
c. General Ordinary Annuity
d. General Annuity Due

10. What does an annuity mean?

a. An ongoing sequence of equal payments or deposits made at equal
intervals of time.
b. An ongoing sequence of equal amount discounts made at equal intervals
of time.
c. An ongoing sequence of equal amounts of annuity made at equal
intervals of time.
d. An ongoing payment.
11. A type of annuity where the interest period and payment interval differ.
a. Simple Annuity
b. Annuity Certain
c. Perpetuity
d. General Annuity

12. When is a regular annuity payment made?

a. Beginning of the period

39 (DO_Q2_GENMATH11_MODULE1_LESSON3)
 b. Middle of the period
c. First 3 days of the period
d. End of the period

13. Pedro is making investments to fund his son's education. He makes a

recurring deposit of 5,000Php at the end of each month at a compounded
interest rate of 6% for a period of seven years. What is the value of R?
a. 6
b. 0.06
c. 7
d. 5,000

14. Maria made an investment in a housing plan account, into which she
deposits P10,000 at the end of each quarter, earning 1.25 percent monthly
compound interest over a five-year period. What kind of annuity is Maria
putting money into?
a. Simple Annuity
b. Annuity Certain
c. Perpetuity
d. General Annuity

15. Ordinary Annuity is paid or received at the _______ of the time periods.
a. Beginning
b. Middle
c. End
d. Annual

Lesson Simple and General Annuities

3

The definition, types, and characteristics of simple and compound annuities will
be covered in the first part of this lesson. Several annuity types exist, to match up
payment intervals and interest durations.

• Annuity - a sequence of payments made at equal (fixed) intervals or periods

of time
• Simple annuity - an annuity where the payment interval is the same as the
interest period
• General annuity- an annuity where the payment interval is not the same as
the interest period

40 (DO_Q2_GENMATH11_MODULE1_LESSON3)
Answer each of the following.
1. An investment earns 3% compounded monthly. Find the value of an initial
investment of 5,000Php after 6 years.
A. Give the value of the following using the formula
𝑟
𝐴 = 𝑃(1 + 𝑖)𝑛 𝑤ℎ𝑒𝑟𝑒 𝑖 = 𝑚 𝑎𝑛𝑑 𝑛 = 𝑚𝑡
1. P=________________
2. r=________________
3. i=________________
4. n=_______________
5. A=_______________

2. What is the value of an investment of 3,500Php after 2 years if it earns 1.5%

compounded quarterly?
A. Give the value of the following using the formula
𝑟
𝐴 = 𝑃(1 + 𝑖)𝑛 𝑤ℎ𝑒𝑟𝑒 𝑖 = 𝑚 𝑎𝑛𝑑 𝑛 = 𝑚𝑡
1. P=________________
2. r=________________
3. i=________________
4. n=_______________
5. A=_______________

You have 50,000Php to invest, and two funds that you'd like to invest in. The You-
Risk-It Fund (Fund Y) yields 14% interest. The Extra-Dull Fund (Fund X)
yields 6% interest. Because of college financial-aid implications, you don't think you
can afford to earn more than 4,500Php in interest income this year. How much
should you put in each fund?"

The problem here comes from the fact that you have to split the 50,000Php in
principal into two smaller amounts. Here's how to handle this:

I P r t
Fund X ? x 0.06 1
Fund Y ? 50,000-x 0.14 1
total 4,500 50,000

1. Using the table above, calculate the amounts in the first column.
___________________________________________________________________________
2. Given the answer in the first column how much should you put into Fund X
and Fund Y?
___________________________________________________________________________

41 (DO_Q2_GENMATH11_MODULE1_LESSON3)
 3. How much will be the total amount of investment for the period of 5 years if
you invest the same amounts for Fund X and Fund Y that pays interest at 5%
compounded annually?
___________________________________________________________________________

A fixed contribution or investment is made for each period as part of the

What's New activity (and fixed compound interest rate over a specified time; that in
this case is 5 percent compounded annually for 5 years)
An annuity payment is one that has a fixed payment for each period and a
preset compound interest rate over a certain length of time. Annuities are accounts
linked to streams of annuity payouts.
Examples of annuity are deposits to savings accounts, monthly housing or
car mortgage payments, retirement products, credit card purchases loans, and
debts.
Annuities may be classified in different ways as follows.

Annuities
Annuity Based on Annuity Certain Annuity Perpetuity
Terms An annuity in Uncertain An annuity that
definite duration. An annuity of has begun and
It has a beginning indefinite continues
and end on a duration. The indefinitely.
definite schedule. annuity payment Example:
Example: Housing depends on scholarship from
Loan certain events or endowment and
situations. irredeemable
Example: health investments
or life insurance
and pension
Annuity Based on Simple Annuity General Annuity
Compounding The number of The number of
Period compounding compounding
periods per year is periods per year is
equal to the not equal to the
number of number of
annuities per year. annuities per year.
Annuity Based on Ordinary Annuity Annuity Due Deferred Annuity
Payment An Annuity that is An Annuity that is An Annuity that
Schedules received at the end received at the the first payment
of the period. beginning of the is made after a
period. certain period or
interval of time.

42 (DO_Q2_GENMATH11_MODULE1_LESSON3)
 • Annuity - a sequence of payments made at equal (fixed) intervals or
periods of time
• Payment interval - the time between successive payments
• Term of an annuity, t - the time between the first payment interval
and last payment interval
• Regular or Periodic payment, R - the amount of each payment
• Amount (Future Value) of an annuity, F – the sum of future values of
all the payments to be made during the entire term of the annuity.
• Present value of an annuity, P – the sum of present values of all the
payments to be made during the entire term of the annuity.
The future value of an annuity is the total accumulation of the payments and
interest earned. The present value of an annuity is the principal that must be
invested today to provide the regular payment of an annuity.

Present Value Future value

Simple Annuity 𝑟 −𝑚𝑡 𝑟 𝑚𝑡
1 − (1 + 𝑚) (1 + 𝑚) − 1
𝑃=𝑅 [ 𝑟 ] 𝐹=𝑅 [ 𝑟 ]
𝑚 𝑚
1 − (1 + 𝑖)−𝑛 (1 + 𝑖)𝑛 − 1
𝑃 = 𝑅[ ] 𝐹 = 𝑅[ ]
𝑖 𝑖

General Annuity 𝑟 −𝑚𝑡 𝑟 𝑚𝑡

1 − (1 + ) (1 + ) −1
𝑃=𝑅 𝑚 𝐹=𝑅 𝑚
𝑝 𝑝
𝑟 𝑐 𝑟 𝑐
[ (1 + 𝑚) − 1 ] [ (1 + 𝑚 −1]
)
1 − (1 + 𝑖)−𝑛 (1 + 𝑖)𝑛 − 1
𝑃 = 𝑅[ ] 𝐹 = 𝑅[ ]
(1 + 𝑖)𝑏 − 1 (1 + 𝑖)𝑏 − 1

𝑟 𝑝
𝑛𝑜𝑡𝑒 𝑖 = , 𝑛 = 𝑚𝑡, 𝑏=
𝑚 𝑐
Where,
P-Present Value p-number of months in a payment interval
F-Future Value c-number of months in a compounding period
R-periodic payment i-interest rate per period
r-rate per annum m-number of conversion period in a year
n-number of conversion periods t- number of years

Example 1. Suppose Mrs. Manda would like to deposit 3,000Php every month in a
fund that gives 9%, compounded monthly. How much is the amount of future value
of her savings after 6 months?

(Since the compounding period is similar to the payment interval (3,000Php every
month is compounding monthly), then this is a type of simple annuity).

Given: Periodic payment (R) = 3,000Php

Term (annually, t) = 6 months/12=0.5
Rate per annum (annually) (r) = 9%=0.09
Number of conversions per year (m) = 12
𝑟 0.09
Interest rate per period 𝑖 = 𝑚 = 12 = 0.0075
Number of payments in the annuity (n)=mt = (12) (0.5)=6

43 (DO_Q2_GENMATH11_MODULE1_LESSON3)
Solution:

(1+𝑗)𝑛 −1 (1+0.0075)6 −1
𝐹 = 𝑅[ 𝑗
] = 3,000 [ 0.0075
] = 18,340.89

Thus, the amount of 18,340.89Php is the future value of the annuity which means
in 6 years, this will be the amount of money Mrs. Manda will have.

Example 2. Anna is paying 3,550Php per quarter for a brand-new automatic

washing machine which she needs to pay for 1 year and 3 months. If she will pay
in cash, how much she needs to pay if the interest rate is 12% compounded
quarterly.
(This is a simple annuity since the compounding time (3,550Php per quarter is
compounding quarterly) is comparable to the payout interval).

Given: Periodic payment (R) = 3,550Php

Term (annually, t) = 15 months/12= 1.25
Interest rate per annum (annually) (i) = 12%=0.12
Number of conversions per year (m) = 4
𝑖 0.12
Interest rate per period 𝑗 = 𝑚 = 4 = 0.03
Number of payments in the annuity (n)=mt = (4) (1.25)=5

Solution:

1−(1+𝑗)−𝑛 1−(1+0.03)−5
𝑃 = 𝑅[ 𝑗
] = 3,550 [ 0.03
] = 16,257.96

Thus, the amount of 16,257.96Php is the present value of the annuity which Anna
needs to pay in cash.

Example 3. Mario is planning to purchase a lot in installment basis in the amount

of 20,000Php payable annually for 9 years. What will be the equivalent amount of
this lot if it has an interest rate of 5% compounded quarterly?

(Notice that this is a general annuity as the number of compounding periods per
year is not equal to the number of annuities per year i.e., 20,000Php payable
annually year compounding quarterly).

Given: Periodic payment (R) = 20,000Php

Term (annually, t) = 9
𝑟 0.05
Interest rate per annum (i) = 𝑚= 4 = 0.0125
Number of conversions per year (m) = 4
𝑟 0.07
Interest rate per annum (i) = 𝑚= 2 = 0.035
Number of months in a payment interval (p)=12
𝑝 12
Number of months in a compounding period (c)=3 thus 𝑏 = = = 4
𝑐 3
Number of conversion periods (n)=mt=9(4) =36

44 (DO_Q2_GENMATH11_MODULE1_LESSON3)
Solution:

1−(1+𝑖)−𝑛 1−(1+0.0125)−36
𝑃 = 𝑅 [ (1+𝑖)𝑏 −1 ] = 20,000 [ (1+0.0125)4 −1
] = 141,559.9

Thus, the present value of the lot is only 141,559.9Php.

Looking for its future value,
(1+𝑖)𝑛 −1 (1+0.0125)36 −1
𝐹 = 𝑅 [(1+𝑖)𝑏 −1] = 20,000 [ (1+0.0125)4 −1 ] = 221,391.7

Therefore, the future value of this lot costs 221,391.7Php.

Solve the following problem:

1. Find the future amount of annuity if:
a. Perla invested the amount of 500Php monthly in an insurance company
account which at the end of each quarter for 1 ½ year earns 5%
compounded monthly.
b. Perla invested the 500Php every end of the quarter for 8 years paying
15% compounded semi-annually.

2. Find the present value of annuity if:

a. An employee purchased a secondhand car by paying 35,000 each year for
3 years with an interest of 8% compounded quarterly.
b. An employee pays 10,000 cash and 5,000 every month for 3 years and
compounds at 9% monthly.

3. How much is the cash value of the question 2.b?

Read the sentences carefully and fill in the missing answer by writing your answer
on the line/s provided.
1. In ___________ the payment interval is also the same as the compounding
period.
2. In general annuity the ____________ is not equal with the payment
interval.
3. Each payment in an annuity is called the ________________.
4. ___________ is a sequence of payments made at equal (fixed) intervals or
periods of time.
5. A high school student would like to save 50,000Php for his graduation.
How much should he deposit in savings account every month for
5.5years if interest is at 0.25% compounded monthly?

45 (DO_Q2_GENMATH11_MODULE1_LESSON3)
 a. The type of annuity illustrated in the problem is a ________ annuity
b. The total number of payments is ___________.
c. The number of conversion period is_________.
d. The interest rate per period is __________.
e. The present value is ________________.

___________.

Look for annuity-related circumstances in your neighborhood. For instance, a

bank, cooperative society, or appliance store.
a. How much will a specific appliance cost in full or in installments?
b. How much would it cost you to borrow 5,000 PHP with a 1-year
repayment term?
Calculate the annual interest rate as well as the period interest rate for the
scenario you selected. Is the loan term good? If not, why not?
Below is the rubrics to guide you in this activity.

Areas of 4 points 3 points 2 points 1 point

Assessment
Computations Computations Computations Computations Erroneous
are free of are slightly are slightly and
error inaccurate inaccurrate inaccurate
and is and but computations
accurate. close to not close to
correct correct
answers. answers.
Ideas Presents ideas Presents ideas Ideas are too Ideas are
in an original in a general. vague or
manner consistent unclear.
manner
Organization Strong and Organized Some No
organized beg/mid/end organization; organization;
beg/mid/end attempt at a lack
beg/mid/end beg/mid/end
Word Choice Sophisticated Nouns and Needs more Little or no
use of nouns verbs make nouns and use of nouns
and verbs essay verbs. and verbs.
make informative.
the essay very
informative.
Sentence Sentence Sentence Sentence No sense of
Structure structure structure is structure is sentence
enhances evident; limited; structure or
meaning; sentences sentences flow
flows mostly flow. need
throughout to flow.
the
piece.

46 (DO_Q2_GENMATH11_MODULE1_LESSON3)
Write the letter of the correct answer on a sheet of paper.
1. Pablo started making 5,000Php quarterly deposits into a fund that pays 1%
quarterly compounded. After six years, how much money will be in the fund?
a. 123,514.09Php
b. 125,413.09Php
c. 132,415.09Php
d. 152,314.09Php

2. A lot is purchased for 50,000Php in cash and 10,000Php each month for
years. How much is the cash value of the property if interest is compounded
at an annual rate of 8% per month?
a. 824,214.81Php
b. 842,214.81Php
c. 874,214.81Php
d. 892,214.81Php

3. How much should be put into a fund annually paying a compound interest
rate of 2 % to reach 100,000Php in five years?
a. 19,125.84Php
b. 19,215.84Php
c. 19,512.84Php
d. 19,152.84Php

4. The price of an appliance is 15,999Php in cash or 14,991Php each month for

the following 12 months if purchased on terms. Money is compounded
monthly at 9%. Which is lower the cash price or the present value of the
payment terms?
a. Cash price since it is only 15,999Php is less than the present value of
all monthly payments of 17,140.93Php
b. Cash price since it is only 15,599Php is less than the present value of
all monthly payments of 27,140.93Php
c. Present value since it is only 13,568Php is less than the cash price of
all monthly payments of 15,599Php
d. Present value since it is only 12,219.05Php is less than the cash price
of all monthly payments of 15,599Php.

5. Loans of 50,000Php are due after three years. The borrower must make a
payment every six months with a monthly interest compounding rate of 6%
to repay the loan. How much should he pay every 6 months?
a. 9,299.88Php
b. 9,992.88Php
c. 9,929.88Php
d. 9,998.82Php

47 (DO_Q2_GENMATH11_MODULE1_LESSON3)
6. What is the present value of 500Php installments made semi-annually at the
end of each term for 10 years at a 5% compounded semi-annual interest
rate?
a. 7,974.58Php
b. 7,497.58Php
c. 7,749.58Php
d. 7,794.58Php

7. What is the future value of question # 6?

a. 12,277.33Php
b. 12,727.33Php
c. 17,277.33Php
d. 12,772.33Php

8. With an interest rate of 6% compounded quarterly, what is the present value

of annual payments of 1,000Php at the end of each term for 8 years?
a. 6,176.42Php
b. 6,716.42Php
c. 6,617.42Php
d. 6,167.42Php

9. What is the future value of question # 8?

a. 9,496.04Php
b. 9,649.04Php
c. 9,946.04Php
d. 9,469.04Php

10. How much would 2,000Php be paid out in quarterly installments over the
course of five years, at an interest rate of 8% yearly compounded?
a. 32,848.42Php
b. 38,248.42Php
c. 32,884.42Php
d. 38,428.42Php

11. What is the future value of question # 10?

a. 48,381.22Php
b. 48,381.22Php
c. 48,813.22Php
d. 48,318.22Php

12. What is the present value of semi-annual payments of 8,000Php at the end
of each term for a period of 12 years at an interest rate of 12% compounded
quarterly?
a. 99,573.23Php
b. 95,973.23Php
c. 99,753.23Php
d. 95,793.23Php

48 (DO_Q2_GENMATH11_MODULE1_LESSON3)
 13. What is the future value of question # 10?
a. 411,641.66Php
b. 411,461.66Php
c. 411,146.66Php
d. 411,614.66Php

14. A loan which pays 1,500Php monthly for 5 years with a rate of 10%
compounded monthly is an example of _______________ annuity.
a. Simple
b. General
c. Deferred
d. Perpetuity

15. A monthly investment with a semi-annually compounding rate is a

_____________ annuity
a. Simple
b. General
c. Deferred
d. Perpetuity

Solve the following and show your solution inside the box provided.
1. An insurance company provides a retirement package with a 6,000Php
annual payment for people aged 50 to 70. How much will the account be
worth after 20 years if it yields 9.5 percent annually compounded?

2. In order to collect 1,250 every three months for the next 12 years, how much
should one put in an account yielding 5 percent compounded quarterly?

49 (DO_Q2_GENMATH11_MODULE1_LESSON3)
(DO_Q2_GENMATH11_MODULE1_LESSON3) 50
What’s New What I Know
Assessment
0.06x 1. C
1. A
0.14(50,000-x) 2. A
2. C
2. Fund X= 3. A
3. B
31,250Php 4. C
4. A
Fund Y= 18,750Php 5. D
5. A 3. 63,814.08Php 6. B
6. D 7. A
7. D What’s More 8. C
8. A 9. A
9. C 1.a 9,325.95Php 10.A
10.C b. 29,612.58Php
11.D
11.D 2.a 89,804.04Php
12.D
12.A b 157,234.03Php
3. 167,234.03Php 13.D
13.B
14.D
14.A
What I Have Learned 15.C
15.B
1. Simple Annuity
What’s In
Additional Activities 2. interest conversion
3. periodic payment 1.1P=5,000Php
1. 324,733.4Php 4. Annuity 1.2r=0.03
2. 9,357.41Php 5.a. simple 1.3i=0.03/12
b. n=66 1.4n=72
c. m=12
1.5A=
d. 0.0025/12
5,984.74Php
e. 752.46
2.1 P=3,500Php
2.2 r=0.015
2.3 i=0.015/4
N=8
A=3,606.39Php
Books:
1. Department of Education-Republic of the Philippines (2016). Teaching Guide
for Senior High School, General Mathematics
2. Workbook in General Mathematics 1st edition (2016) p.125
Website:
https://www.mathbootcamps.com/compound-interest-formula/
https://www.purplemath.com/modules/investmt.htm

51 (DO_Q2_GENMATH11_MODULE1_LESSON3)
 SENIOR HIGH SCHOOL

General Mathematics
(LEARNING AREA)
Quarter 2 Module
(QUARTER NUMBER)1
Lesson
(MODULE 4:
NUMBER)
Future Market Value and
Deferred Annuity

52 (DO_Q2_GENMATH11_MODULE1_LESSON4)
Targets:

1. Calculates the fair market value of a cash flow stream that includes an
annuity (M11GM-IId-2);. and
2. Calculates the present value and period of deferral of a deferred annuity
(M11GM-IId-3).

I. Write the letter of the correct answer.

1. A term used to describe payments received, payments made, or deposits

made.
a. Cash flow b. Fair market value c. Cash Price d. Single amount

2. An annuity that does not begin until a given time interval has passed.
a. Annuity b. Deferred annuity c. Immediate annuity d. Period of deferral

3. It refers to a single sum that is equal to the payment stream's value at a

specific time.
a. Cash flow b. Fair market value c. Cash Price d. Focal Date

4. The initial price of a truck is 250,000Php. Danilo proposed paying

225,000Php for the truck which the vendor approved. What is the truck's
fair market value?
a. 275,000Php b. 250,000Php c. 225,000Php d. 237,500

5. A merchant charges 1,200Php for shoes. A man proposed paying 1,000Php

for the sneakers. They, at the medium price, both agreed. How much is the
shoes' fair market value?
a. 1,200Php b. 1,100Php c. 1,150Php d. 1,000hp

6. A piano is for sale in a shop. Maria promises to make a down payment of

20,000Php and a lump sum contribution of 30,000Php in a year. What is
the economic value if interest were compounded at 4% annually?
a. 51,200Php b. 20,000Php c. 28,846.15 d. 48,846.15

7. A washing machine is offered for sale in a shop. Ren promises to make a

5,000Php down payment and 6,000Php at the end of each six-month period
for two years. Calculate the economic value of the washing machine if the
money grows by 3% per month.
a. 28,126.31 b. 24,545.42 c. 23,126.31 d. 29,000Php

8. A potential buyer wants to purchase a purse that costs 15,000Php with an

annual appreciation of 2%. If the buyer wants 4,000Php at the end of each

53 (DO_Q2_GENMATH11_MODULE1_LESSON4)
 3-month period for a year and each quarter the money is compounded by
4%. Which of the following best described the buyer’s offer after a year?
a. The buyer’s offer is 941.60Php lower than the market value of the purse.
b. The buyer’s offer is 901.98Php higher than the market value of the purse.
c. The buyer’s offer is 901.98Php lower than the market value of the purse.
d. The buyer’s offer is 941.60Php higher than the market value of the purse.
II. For items 9 – 15, refer to the cash flow problem below and fill in the missing table.
Mr. Santos received two offers on a lot that he wants to sell.
First Offer: 20,000Php down payment and an 800,000Php lump sum
payment 6 years from now. Second Offer: 25,000Php down payment plus
30,000Php every quarter for 6 years. Each money earns at 6.5%
compounded annually.

FOCAL DATE PRESENT FUTURE FAIR MARKET

VALUE VALUE VALUE
IST OFFER START OF 9. 10.
THE TERM
END OF THE 11. 12.
TERM
2ND OFFER START OF 13. 14.
THE TERM
END OF THE 15.
TERM

Lesson Future Market Value and Deferred

4 Annuity

This lesson will assist you in comprehending the use of annuities in any
scenario involving the cash flow of a corporate entity or an individual investment,
mortgages, and other forms of credit.

Activity 1
Write SA if the situation exemplifies a simple annuity and GA if it is a general
annuity.
1. a monthly installment of an appliance with an interest rate compounded
monthly
2. a monthly installment of an appliance with an interest rate compounded
annually
3. saving 3,000Php every month in a fund that gives 9% compounded monthly

54 (DO_Q2_GENMATH11_MODULE1_LESSON4)
 4. paying 200,000Php as a down payment for a car and the remaining amount
is to be settled by paying 16,200Php at the end of every 3 months for 5 years
with an interest rate of 10.5% compounded quarterly
5. paying for the debt at 12% compounded semi-annually and committing 8
quarterly payments of 24, 491.28Php
Activity 2
Mario started to deposit 1,000Php monthly in a fund that pays 6% compounded
semi-annually. After 15 years, he will have 290,076.28Php in his fund.
Using the annuity problem, give the value of each variable in the formula,
(𝟏+𝒊)𝒏 −𝟏
𝑭 = 𝑹[ ]
𝒊

1. R 2. F 3. n 4. i

Activity 3 :Wise Decision!

Which offer would you think has a better offer on a lot that is being sold?

Mr. Ocampo’s offer Mr. Cruz’s offer

50,000Php down payment 50,000Php down payment
1,000,000Php after 5 years 40,000Php every quarter for 5 years
Both earn 5% compounded annually

The payments received and deposits that is being made in Activity 3 refer to
a cash flow.
A cash flow is a term that refers to payments received (cash inflows) or
payments or deposits made (cash outflows). Cash inflows can be represented by
positive numbers and cash outflows can be represented by negative numbers.
The cash flow of the company is disclosed to the reader in the cash flow
report, which is crucial. A company needs to have enough cash on hand at all
times to be successful. It requires money to cover its costs, repay bank debts, pay
taxes, and buy new assets.
A cash flow report can tell whether a company has the funds necessary to
carry out this specific task. A business has to have cash on hand in order to be
solvent. When a company lacks the funds to pay its debts, it is frequently deemed
bankrupt.
A single sum equal to the value of the payment stream at a given date is
referred to as the fair market value or economic value of a cash flow (payment
stream) on that day. The focal date is when this occurs.

55 (DO_Q2_GENMATH11_MODULE1_LESSON4)
 Let us recall some concepts from the previous lessons on the future and the
present values of a general annuity. So that it will be easier for you to understand
the lesson.
The future value F and the present value P of a general annuity is given by
the formula:
(1 + 𝑖)𝑛 − 1 1 − (1 + 𝑖)−𝑛
𝐹 = 𝑅[ ] 𝑎𝑛𝑑 𝑃 = 𝑅 [ ]
𝑖 𝑖

Consider the situation of stated previously in Activity 3. Let’s apply the concepts of
present and future values to solve this cash flow problem.
Cash Flow Problem:

Mr. Ocampo’s offer Mr. Cruz’s offer

50,000Php down payment 50,000Php down payment
1,000,000Php after 5 years 40,000Php every quarter for 5 years
Both earn 5% compounded annually

Solution:
Find: Fair market of each offer

Step 1. Illustrate the cash flow of the two offers using time diagram

Teaching Guide for Senior High School, General Mathematics DepEd Phil (2016).

Step 2. Choose a focal date and determine the values of the two offers at that
focal date.
Hint: It is usually convenient to choose focal dates to either be at the start or at the
end of the term.
For instance, chose the focal date to be the start of the term. Since the focal date is
at t = 0, compute for the present value of each offer.
Mr. Ocampo's offer: Since 50,000Php is offered today, then its present value is still
50,000Php. The present value of 1,000,000Php offered five years from now is:

𝑃 = 𝐹(1 + 𝑖)−𝑛 = 1,000,000(1 + 0.05)−5 = 783,526.17𝑃ℎ𝑝

Fair Market Value (FMV)= down payment + Present Value
Fair Market Value (FMV)= 50,000 +783,526.17= 833,526.17Php

56 (DO_Q2_GENMATH11_MODULE1_LESSON4)
Mr. Cruz’s offer: Compute for the present value of a general annuity with quarterly
payments but with annual compounding at 5%.
𝑟4
Solve the equivalent rate, 𝑖 = 4
, 𝑜𝑓 5% 𝑐𝑜𝑚𝑝𝑜𝑢𝑛𝑑𝑒𝑑 𝑎𝑛𝑛𝑢𝑎𝑙𝑙𝑦.

Equate formulas for future value. 𝐹1 = 𝐹2

𝑖4 𝑖1
Substitute. 𝑃(1 + 4 )4𝑡 = 𝑃(1 + 1 )1𝑡

𝑖4 0.05 𝑡
Divide both sides by P and substitute 𝑖 1 =0.05, (1 + 4 )4𝑡 = (1 + 1
)
1
1 𝑖4
Raise both sides by 4𝑡
1+ 4
= (1.05) 4

𝑖4 𝑖4 4
Solve for 4 4
= √1.05 − 1 = 0.012272

𝑟4
The present value of an annuity with n = mt = 4(5) = 20 and , 𝑖 = 4
= 0.12272 is
given by

1 − (1 + 𝑖)−𝑛 1 − (1 + 0.012272)−20
𝑃 = 𝑅[ ] = 40,000 [ ] = 705,572.68𝑃ℎ𝑝
𝑖 0.012272

Fair Market Value (FMV)= down payment + Present Value

Fair Market Value (FMV)= 50,000 +705,572.68= 755,572.68Php

Step 3. Conclusion
Hence, Mr. Ocampo’s offer has a higher market value. The difference
between the market values of the two offers at start of the terms is
833,526.17Php - 755,572.68Php = 77 953.50Php.
There are annuities that the series of payments will start on a later date.
This type of annuity refers to deferred annuity. A deferred annuity is an annuity
that does not begin until a given time interval has passed. The time between the
purchase of an annuity and the start of the payments for the deferred annuity is
referred to as period of deferral.
A deferred annuity can be a long-term investment in which you invest a sum
of money, then receive payments several years down the line after the initial sum
has accrued interest. Also, it can be a contract with an insurance company that
promises to pay the owner a regular income, or a lump sum, at some future date. It
come in several types-fixed, indexed, and variable-which determine how their rate
of return is computed.

The following are examples of deferred annuity in real life:

• Monthly payments of P2,000 for 5 years that will start 7 months from now.
• Annual payments of P8,000 for 12 years that will start 5 years from now.
• Quarterly payments of P 5,000 for 8 years that will start two years from now.
• Semi-annual payments of P60,000 for 3 years that will start 5 years from
now.
• Payments of P3,000 every 2 years for 10 years starting at the end of 6 years.

57 (DO_Q2_GENMATH11_MODULE1_LESSON4)
Consider the scenario below:

Suppose you want to purchase a cellular phone. You decided to pay monthly for
1 year starting at the end of the month. How much is the cost of the cellular phone if
your monthly payment is 2,500Php and interest is at 9% compounded monthly?

Solution:
Given periodic payment R = 2,500.00
interest rate per annum r= 0.09
term t = 1 year
number of conversions per year m = 12

0.09 −12
−𝑛
1 − (1 + 𝑖) 1 − (1 + 12 )
𝑃 = 𝑅[ ] = 2500 [ ] = 28,587.28
𝑖 0.09
𝑖 12

Thus, the cost of the cellular phone now is 𝟐𝟖, 𝟓𝟖𝟕. 𝟐𝟖Php.
What if you consider a different payment scheme to buy the cellular phone?
In this scheme, you have to pay ₱ 2,500.00 monthly for 1 year starting at the end of
the fourth month. If the interest rate is 9% converted monthly, how much is the
cash value of the cellular phone?
Note that the two payment schemes have the same number of payments n
and the same interest rate per period j. Their main difference is the start of the
payments. The first scheme started at the end of the first interval which makes it
an ordinary annuity. The second scheme started on a later date. This annuity is
called deferred annuity.
In scheme 2, you started paying at the end of the fourth month to the end of the
15th month. The time diagram for this option is given by:

Teaching Guide for Senior High School, General Mathematics DepEd Phil (2016)
Now, how do we get the present value of this annuity?
Step 1. First, let's assume that payments are also being made during the deferral
period; in other words, no payments are being missed. The associated time diagram
is

58 (DO_Q2_GENMATH11_MODULE1_LESSON4)
 Teaching Guide for Senior High School, General Mathematics DepEd Phil (2016)
Its present value P of this ordinary annuity is computed as

0.09 −15
1 − (1 + 𝑖)−𝑛 1 − (1 + )
𝑃 = 𝑅[ ] = 2500 [ 12 ] = 35,342.49𝑃ℎ𝑝
𝑖 0.09
𝑖
12
Step 2. Calculate the present value of the payments that were made during the
deferral period. Based on the problem, there will be three payments during the period
of deferral, starting at the end of the fourth month.

0.09 −3
1 − (1 + 𝑖) −𝑛 1 − (1 + 12 )
𝑃 = 𝑅[ ] = 2500 [ ] = 7,388.89𝑃ℎ𝑝
𝑖 0.09
𝑖 12

Therefore, the present value P during the period of deferral is 7,388.89𝑃ℎ𝑝

Step 3. Since the payments in the period of deferral are artificial payments, subtract
the present value of these payments from present value P with assumed payments
starting the first month up to the fifteenth, thus

35,342.49𝑃ℎ𝑝 − 7,388.89𝑃ℎ𝑝 = 27,953.60𝑃ℎ𝑝

Thus, the present value of the cellular phone is 𝟐𝟕, 𝟗𝟓𝟑. 𝟔𝟎𝑷𝒉𝒑
In comparing the present values of the two schemes, Scheme 2's present
value is lower than Scheme 1's since Scheme 2's payment will be paid at a later
time.
In general, the present value of all k + n installments (including the artificial
payments) are typically the first step in calculating the present value of a deferred
annuity. And the formula of a Present Value of a Deferred Annuity is given by

𝟏 − (𝟏 + 𝒊)−(𝒌+𝒏) 𝟏 − (𝟏 + 𝒊)−𝒏
𝑷 = 𝑹[ ] − 𝑹[ ]
𝒊 𝒊

where:
R – the regular payment
i- Interest rate per period
n- the number of payments
k- the number of conversion periods in the deferral
Example. Mr. Cruz decided to sell his lot and to deposit the fund that may give an
interest rate of 5% converted annually. When they calculated the interest, he
discovered that he could start withdrawing 480,000Php yearly for eight years at the
end of the first six years when it is time for him to retire.

59 (DO_Q2_GENMATH11_MODULE1_LESSON4)
Given: R = 480,000 m=1 i= 0.05 k =5 n=8
Find P.
Solution. The present value of the deferred annuity can be solved as

1 − (1 + 𝑖)−(𝑘+𝑛) 1 − (1 + 𝑖)−𝑛
𝑃 = 𝑅[ ]−𝑅[ ]
𝑖 𝑖

1 − (1 + 0.05)−13 1 − (1 + 0.05)−5
𝑃 = 480,000 [ ]−𝑅[ ] = 2,430,766.23𝑃ℎ𝑝
0.05 0.05

Therefore, the present value of these withdrawals is 𝟐, 𝟒𝟑𝟎, 𝟕𝟔𝟔. 𝟐𝟑𝑷𝒉𝒑.

Solve the following problems.

1. Two insurance company offers you a plan. Company A offers P150,000 at the
end of 3 years plus P300,000 at the end of 5 years. Company B offers P25,000
at the end of each quarter for the next 5 years. Assume that money is worth
8% compounded annually. Which insurance company will you get and why?

2. A man borrowed money from the bank, which must be repaid in 4,000Php per
month for two years. After three months, the first payment will be made. If the
interest rate is 10% compounded monthly, how much does the man owe from the
bank?

Write T if the statement is true otherwise, write F.

1. A cash flow is a term that refers to payments received.
2. Deposits made is cash inflows.
3. The cash flow report is important because it informs the reader of the
business cash position.
4. Economic value is the other term for fair market value.
5. The fair market value of a cash flow (payment stream) on a date refers to a
single amount that is equivalent to the value of the payment stream at that
date.
6. Not all annuities have the series of payments that will start on a later date.
7. Focal date is the time between the purchase of an annuity and the start of
the payments for the deferred annuity.
8. Credit card companies offer deferred payments.
9. Cash price refers to a single amount that is equivalent to the value of the
payment stream at a particular date.
10. Deferred annuity is an annuity that does not begin until a given time
interval has passed.

60 (DO_Q2_GENMATH11_MODULE1_LESSON4)
Imagine you are working in a lending company that encourages customers to borrow
money in a deferred payment. Your supervisor requested you to form a team and
formulate a slogan to be used for this campaign.
a. Write a short phrase or slogan to persuade people to borrow a big amount of
money from your company where you work at.
b. Show your sample computation if the person will borrow money at a certain
amount and will start the payment after 6 months of borrowing with an
interest rate of 4% compounded quarterly.
Below is the rubrics to guide you in this activity.

Areas of 4 points 3 points 2 points 1 point

Assessment
Computations Computations Computations Computations Erroneous
are free of are slightly are slightly and
error inaccurate in accurrate inaccurate
and is and but computations
accurate. close to not close to
correct correct
answers. answers.
Ideas Presents ideas Presents ideas Ideas are too Ideas are
in an original in a general. vague or
manner consistent unclear.
manner
Organization Strong and Organized Some No
organized beg/mid/end organization; organization;
beg/mid/end attempt at a lack
beg/mid/end beg/mid/end
Word Choice Sophisticated Nouns and Needs more Little or no
use of nouns verbs make nouns and use of nouns
and verbs essay verbs. and verbs.
make informative.
the essay very
informative.
Sentence Sentence Sentence Sentence No sense of
Structure structure structure is structure is sentence
enhances evident; limited; structure or
meaning; sentences sentences flow
flows mostly flow. need
throughout to flow.
the
piece.

61 (DO_Q2_GENMATH11_MODULE1_LESSON4)
Choose the letter of the correct answer.
1. What term refers to payment received, or deposits made?
a. cash flow
b. annuity
c. fair market value
d. general annuity

2. What is the other term for fair market value?

a. annuity value
b. economic value
c. future value
d. present value

3. Which term refers to a single amount that is equivalent to the value of the
payments stream at that date?
a. Annuity
b. cash flow
c. down payment
d. fair market value

4. Cash _______can be represented by positive numbers.

a. Outflows
b. Flows
c. Inflows
d. Value

5. It is the amount of cash and cash equivalents being transferred into and out
of the business.
a. cash flow
b. annuity
c. fair market value
d. general annuity
6. It is an annuity in which the first periodic payment is made after a certain
interval of time.
a. Ordinary Annuity
b. Deferred Annuity
c. General Annuity
d. Simple Ordinary Annuity

7. The present value of a deferred annuity is the accumulated value of the

stream of payments at the beginning of the deferral period.
a. True
b. False

62 (DO_Q2_GENMATH11_MODULE1_LESSON4)
 c. Maybe

8. The present value of a deferred annuity is the accumulated value of the

stream of payments at the beginning of the deferral period.
a. True
b. False
c. Maybe

9. What is the period of deferral of payments of 2,000Php at the end every six
months for five years with the first payment made two years from now?
a. 5
b. 4
c. 3
d. 2

10. What is the period of deferral of payments of 1,500Php at the end of each year
for three years with the first payment made five years from now?
a. 5
b. 4
c. 3
d. 2

11. What is the period of deferral of monthly payments of 2,000Php for 5 years
that will start 7 months from now?
a. 5
b. 6
c. 7
d. 8

12. What is the period of deferral of semi- annual payments of 30,000Php for 3
years that will start 5 years from now?
a. 7
b. 8
c. 9
d. 10

For items 13-15, please refer to the problem below:

Perla availed of a salary loan that gave her an option to pay 10,000Php monthly
for 1 year. The first payment is due after 6 months.

13. What is the period of deferral?

a. 6
b. 5
c. 4
d. 2

63 (DO_Q2_GENMATH11_MODULE1_LESSON4)
 14. What is the present value of the annuity if the interest rate is 12% converted
monthly and if there are no skipped payments?
a. 155,622.51Php
b. 152,265.51Php
c. 151,562.51Php
d. 150,221.51Php

15. What is the present value of the deferred annuity if the interest rate is 12%
converted monthly?
a. 120,877.20Php
b. 108,087.20Php
c. 107,088.20Php
d. 102,878.20Php

Solve the following problems:

1. April offers a face mask which is originally sold at 70Php per box while May
offered to buy the face masks at 50Php per box to which the seller agreed.
How much is the fair market value of the face shield?

2. Mrs. Dela Cruz agreed to pay an insurance company 20,000Php annually till
her retirement in exchange for a 25-year annuity in advance of her retirement
in 20 years. How much interest may Mrs. Dela Cruz earn annually if the
insurance company places the payments in an account offering 2.3 %
compound interest?

64 (DO_Q2_GENMATH11_MODULE1_LESSON4)
(DO_Q2_GENMATH11_MODULE1_LESSON4) 65
Assessment What’s More What I know
1. A 1. Company B’s offer 1. A
2. B is 1. preferable 2. B
3. D since its market 3. B
4. C value 4. C
5. A (409,560.47Php) is 5. B
6. B larger than 6. D
7. B Company A 7. A
8. B (321,216.43Php) 8. D
9. C 2. 85,260.53Php 9. 548,267.30Php
10.B 10.568,267.30Php
11.A What I Have Learned 11.29,182.85Php
12.C 12.829,182.85Php
1. T
13.B 13.594,897.79
2. F
14.A 14.619,897.79
3. T
15.A 15.868,034.69
4. T
Additional Activities 5. T What’s In
6. T
1. 50Php 7. F Activity 1
2. 26,559.85Php 8. T 1. SA
9. F 2. GA
10.T 3. SA
4. SA
5. GA
Activity 2
1. 1,000Php
2. 290,076.28Php
3. 30
4. 3% or 0.03
BLR, DepED. 2016. GENERAL MATHEMATICS Learner's Materials. Pasig City:
Department of Education
BLR, DepED. 2020. GENERAL MATHEMATICS Learner's Materials.
SOCCSKSARGEN: Department of Education
Teaching Guide for Senior High School, General Mathematics DepEd Phil (2016)
https://www.studocu.com/ph/document/mariano-marcos-state-
university/bachelor-of-science-in-civil-engineering/performance-task-no1-
4/12169038

66 (DO_Q2_GENMATH11_MODULE1_LESSON4)
 SENIOR HIGH SCHOOL

(LEARNING
General AREA)
Mathematics
(QUARTER NUMBER)
Quarter 2 Module 1
(MODULE NUMBER)
Lesson 5:
Stocks and Bonds

67 (DO_Q2_GENMATH11_MODULE1_LESSON4)
Targets:
1. Illustrate stocks and bonds (M11GM-IIe-1) ;
2. Distinguish between stocks and bonds (M11GM-IIe-2) ;
3. Describe the different markets for stocks and bonds (M11GM-IIe-3) ; and
4. Analyze the different market indices for stocks and bonds (M11GM-IIe-4).

Choose the letter of the best answer. Write the chosen letter on a separate sheet of
paper.
1. What do you call the money that is earned in trade or business after paying the
costs of producing and selling goods and services?
A. Bond C. Profit
B. Investment D. Stocks

2. It is also known as shares and equity which is used to describe the ownership
certificates of any company.
A. Bond C. Stock
B. Commission D. Stockbroker

3. What do you call a business formed to manufacture or supply products or

services for profit?
A. Bond C. Investment
B. Company D. Stock

4. Which is an activity in which money is put at risk for the purpose of making a
profit?
A. Buy C. Invest
B. Collect D. Sell

5. Which of the following is a form of debt financing or raising money by borrowing

from investors and the investors are considered as lenders in the company?
A. Bonds C. Financing
B. Dividend D. Stocks

6. The following terms are related to Bonds EXCEPT?

A. Coupon C. Par Value
B. Price of Bond Rate D. Dividend

7. Which methods is used in measuring the value of a section of the bond market?
A. Bond Index C. Stock Index
B. Bond Yield Ratio D. Stock Yield Ratio

68 (DO_Q2_GENMATH11_MODULE1_LESSON5)
8. What do you call the number of individual buy orders and total number of
shares that a person wishes to buy?
A. Ask Size C. Bind Size
B. Ask Price D. Bind Price

9. Which of the following can be a standard by which investors can compare the
performance of their stocks?
A. market price C. stock price
B. market index D. stock index

10. A certain financial institution declared a ₱ 30,000,000.00 dividend for the

common stocks. If there are a total of 700,000.00 shares of common stocks,
how much is the dividend per share?
A. ₱ 42.86 C. ₱ 62.86
B. ₱ 52.86 D. ₱ 72.86

11. A certain corporation declared a 3% dividend on a stock with a par value of

₱500.00 Mrs. Lingan owns 200 shares of stocks with a par value of ₱ 500.00
How much is the dividend she received?
A. ₱ 2000.00 C. ₱ 3000.00
B. ₱ 2500.00 D. ₱ 3500.00.

12.What happens when people buy stock on a stock market?

A. The corporation loses money.
B. The corporation receives the money.
C. The people selling the stock receives the money.
D. The people buying the stock receives the money.

13. How do you earn money from stocks?

A. Buying stock from an investment banker.
B. Selling the stock for the same price as they paid for the stock.
C. Selling the stock for a lower price than the price they paid for the stock.
D. Selling the stock for a higher price than the price they paid for the stock.

14. Which is most likely to happen if the interest rate on bonds increases?
A. Bond prices increase.
B. The supply of money decreases.
C. People will be willing to hold less wealth in the form of money.
D. The transaction costs associated with holding money will increase.

15. Which is not a reason to buy bonds?

A. Bonds may outperform the stock market during certain periods of time.
B. Bonds generally have outperformed the stock market over the last 100
years.
C. Bonds pay out interest at set intervals, allowing people to live off the
income.
D. Investing in bonds may generate less tax liability than investing in
stocks.

69 (DO_Q2_GENMATH11_MODULE1_LESSON5)
 Lesson Stocks and Bonds
5

Planning to save money in a bank or invest in an institution? Saving money

on a bank is a good thing. However, your money will not grow much over a period of
time, it might but only a little. Investing your money is one of the ways for you to
make money grow. However, investing is risky because of the nature of markets.
Thus, this leaves individuals confused about where they can best put their money.
There are tons of ways to invest your money with. In this lesson we are going to
discuss the most commonly heard form of investment which are stocks and bonds.

In the previous lessons, you learned about annuity. As you go through with this
module, you will need some important concepts of annuity especially in solving the
fair price of the bond. To refresh yourself about annuity, answer the following activity.
Activity 1 Match Me
Match Column I to Column II. Write your answers on a separate sheet of paper.
Column I Column II
1. Amount (Future Value) of 1 − (1 + 𝑗)−𝑛
Ordinary Annuity 𝑎. 𝑅
𝑗
2. A sequence of payments 1 − (1 + 𝑗)−(𝑘+𝑛) 1 − (1 + 𝑗)−𝑘
made at equal (fixed) 𝑏. 𝑅 −𝑅
𝑗 𝑗
intervals or periods of
time
3. The payment interval is (1 + 𝑗)𝑛 − 1
the same as the interest 𝑐. 𝑅
𝑗
period.
4. Present Value of an d. General Annuity
Ordinary Annuity
5. Present Value of a e. Simple Annuity
Deferred Annuity
6. Other term for economic f. Fair market value
value
7. It is an annuity where the g. Deferred Annuity
length of the payment
interval is not the same as
the length of the interest h. Annuity
compounding period.
8. It is the amount of cash i. Period of deferral
and cash-equivalents
being transferred into and j. Cash flow
out of the business?
9. time between the k. Interest
purchase of an annuity
and the start of the l. Loan

70 (DO_Q2_GENMATH11_MODULE1_LESSON5)
 payments for the deferred
annuity
10. refers to payments m. Investment
received (cash inflows) or
payments or deposits
made (cash outflows).

Activity 2 Let’s Explore

A. Explore the sample stock certificate, and then identify each of the following.
Write your answer in a separate sheet.

1. Name of the corporation issuing the certificate

2. Stock certification Number
3. Recipient of the stock
4. Par value of the stock
5. Number of shares declared to the recipient

71 (DO_Q2_GENMATH11_MODULE1_LESSON5)
B. Explore the sample bond certificate, and then answer each of the following.
Write your answer in a separate sheet.

1. Name of the bond issuer

2. Unique certificate identification number
3. Bond par value / face value
4. Interest rate
5. Maturity date

C. Search the meaning of the following Business terms in the dictionary.

1. Stock
2. Bond
3. Dividend
4. Coupon

Stocks
Is it possible for you to be part owners of the big companies in the Philippines
like San Miguel Corporation, Petron Corporation, Manila Electric Company, BDO
Unibank, and the like? The answer is Yes!
Stocks or shares are units of equity or ownership in a company. You can be
considered a stockholder or shareholder if you buy shares of stocks of a company.
You become legal part owners of the company. There are two types of stocks:
common stock and preferred stock. Both will receive dividends or share of earnings
of the company. Dividends are paid first to preferred shareholders. The amount of
dividend received by each stockholder is based on par value and not on the market
value.

72 (DO_Q2_GENMATH11_MODULE1_LESSON5)
 Stockholders carry a certificate of ownership called stock certificate which
is a document that shows the company’s name, the person’s name, the number of
shares owned or bought, the certificate number and the par value. The value of the
stock printed in the certificate is called the par value. Some corporations issue stock
without giving the shares par value. This stock is called no-par stock.

Bonds
Have you ever thought you could fund big companies or even the government?
Big companies or the government often need large amounts of money for their
projects. To raise money, they can issue bonds. Investors who purchase bonds are
essentially 'lenders' to the issuer. However, the investors should be compensated for
the lending their money.
Bonds are certificates that promise to pay a fixed rate of interest by a
corporation or government at the end of certain time. A bond is a certificate of debt
whose repayment has been agreed upon by both the borrower and lender. A person
who buys a bond is called bondholder, is not buying ownership in a company but is
lending the company a money. Unlike a stockholder, a bondholder is not involved in
running a business, does not vote in the institution’s annual meeting but first to
claim in the institution’s earnings.
Bonds can also be referred to as bills, notes, debt securities or debt
obligations. Each bond issued to investors will contain the following information
detailing the borrower’s obligation in the transaction. The face value or principal of
the bond is the amount of money transferred from lender to borrower when bond is
first issued. Maturity date is the day by which the borrower must repay the bond’s
principal in full. Coupon is a term for the interest that the bond issuer will return to
the purchaser as a percentage of the principal.
Bonds have two kinds of values. These are par value and market value. The
par value of the bond is the same as its face value while the market value of a bond
is the price at which the bond is being sold. It may be greater than or less than the
amount of the par value. If the market value is greater than the par value, then the
bond is selling at a premium. If the market value is less than the par value, then the
bond is selling at a discount.

Comparison of Stocks and Bonds

Basis for
STOCKS BONDS
Comparison
A form of equity instrument A form of debt instrument or
or raising money by allowing raising of money by
Definition
investors to be part owners of borrowing from investors
the company.
Government Institutions,
Issuers Corporates Financial Institutions,
Companies etc.

73 (DO_Q2_GENMATH11_MODULE1_LESSON5)
 Shareholders are the owners Bondholders are the lenders
Status of Holders
of the company. to the company
Profits earned by theInterest payments are made
Form of Returns company are paid in the form in the form of Coupon
of Dividends. Payments.
High since it depends upon Relatively low since
Risk Level the performance of the issuer,bondholders are prioritized
so no guaranteed returns. for repayments.
Major Risks Market Risk, Business Risk Interest Rate Risk, Inflation
Associated Risk
Bondholders get the
Shareholders get the right to preference in terms of
Additional Benefit
vote. repayment and also on
liquidation.
When interest rates have When market interest rates
fallen significantly, the decrease, the market value
Market Value
market stock value rises. of an existing bond
increases.

Definition of Terms in Relation to Stocks

• Stocks – share in the ownership of a company

• Dividend – share in the company’s profit

• Dividend Per Share – ratio of the dividends to the number of shares

• Stock Market – a place where stocks can be bought or sold. The stock
market in the Philippines is governed by the Philippine Stock
Exchange (PSE).

• Market Value – the current price of a stock at which it can be sold

• Stock Yield Ratio – ratio of the annual dividend per share and the
market value per share. Also called current stock yield.

• Par Value – the per share amount as stated on the company

certificate. Unlike market value, it is determined by the company and
remains stable over time.

Example 1: PRISM Company declared a ₱40,000,000.00 dividend for the common

stocks. If there are total of 900 000 shares of common stocks, how much is the
dividend per share?
Given: Total Dividend = ₱40,000,000.00
Total Shares = 900,000
Find: Dividend per Share
Total Dividend
Solution: Dividend per Share = =40,000,000
900,000
= 44.44
Total Shares

74 (DO_Q2_GENMATH11_MODULE1_LESSON5)
 Therefore, the dividend per share is ₱44.44.

Example 2: A certain corporation declared a 5% dividend on a stock with a par value

of ₱ 700.00. Mr. Brown owns 300 shares of stocks. How much is the dividend she
received?
Given: Dividend Percentage = 5%
Par Value = ₱ 700
Number of Shares = 300
Find: Dividend
Solution. The dividend per share is: ₱ 700 * 0.05 = ₱ 35
Since there are 300 shares, the total dividend is:
₱ 35/share * 300 shares = ₱ 10, 500
In summary, Dividend = (Dividend Percentage) * (Par Value) * (No. of Shares)
= (0.05) (700) (300) = ₱ 10, 500
Thus, the dividend is ₱10, 500.
Example 3: PYRAMID Corporation with a current market value of ₱ 68.00, give a
dividend of ₱ 11.00 per share of its common stock. OVAL Corporation, with a current
market value of ₱ 85.00, give a dividend of ₱ 13.00 per share. Use the stock yield
ratio to measure how much dividends shareholders are getting in relation to the
amount invested.
Solution.
Given: PYRAMID Corporation:
Dividend per share = ₱ 11
Market Value = ₱ 68
Find: Stock yield ratio
dividend per share 11
Stock yield ratio = market value
= 68
= 0.1618 = 16.18%

Given: OVAL Corporation:

Dividend per share = ₱ 13
Market Value = ₱ 85
Find: Stock yield ratio
dividend per share 13
Stock yield ratio = market value
= 85
= 0.1529 = 15.29%

Thus, PYRAMID Corporation has a higher stock yield ratio that OVAL
Corporation. Thus, each peso would earn you more if you invest in PYRAMID

75 (DO_Q2_GENMATH11_MODULE1_LESSON5)
Corporation than in OVAL Corporation. If all other things are equal, then it is wiser
to invest in PYRAMID Corporation.
Definition of Terms in Relation to Bonds

• Bond - interest-bearing security which promises to pay (1) a stated

amount of money on the maturity date, and (2) regular interest
payments called coupons.

• Coupon - periodic interest payment that the bondholder receives

during the time between purchase date and maturity date; usually
received semi-annually

• Coupon Rate - the rate per coupon payment period; denoted by r

• Price of a Bond - the price of the bond at purchase time; denoted 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 (or Tenor) 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

Example 4: Determine the amount of the semi-annual coupon for a bond with a face
value of ₱500,000.00 that pays 12% payable semi-annual for its coupon.
Given: Face Value F = 500,000
Coupon Rate = 12%
Find: Amount of the semi-annual coupon
Solution:
Annual Coupon amount: 500,000(0.12) = 60,000
Semi-Annual Coupon Amount: 60,000 (½ ) = 30,000
Thus, the amount of semi-annual coupon is ₱ 30,000.00.

76 (DO_Q2_GENMATH11_MODULE1_LESSON5)
Activity 1: Fill Me Up
Answer this Crossword Puzzle to familiarize the terms related to stocks and bonds.

ACROSS
1. Share in the ownership of a company
2. Periodic interest payment that the bondholder receives during the time between
purchase date and maturity date
3. Current price of a stock at which it can be sold
6. Ratio of the dividends to the number of shares
8. Share in the company's profit
9. The amount payable on the maturity date
10. Number of years from time of purchase to maturity date

DOWN
1. Ratio of the annual dividend per share and the market value per share
4. Present value of all cash inflows to the bondholder

77 (DO_Q2_GENMATH11_MODULE1_LESSON5)
5. Interest bearing security which promises to pay amount of money on a certain
maturity date as stated in the bond certificate
7. A place where stocks can be bought or sold

Activity 2: Complete Me
A. Complete the table below by supplying the correct dividend, shares and dividend
per share.

DIVIDEND SHARES DIVIDEND PER SHARE

1 ₱ 25,000 900
2 2, 500 ₱ 18. 35
3 ₱ 1, 550, 000.00 ₱ 125.00

B. Complete the table below by supplying the correct dividend, shares and dividend
per share.

Dividend
Par Value Shares Dividend
Percentage
1 8% ₱ 400 150
2 2.5% 300 ₱ 15, 000
3 ₱ 600 75 ₱ 50,000
4 4.5% ₱250 ₱ 33,750

Activity 3: Solve Me
1. A financial institution declared a dividend of ₱ 95,000,000.00 for its common
stock. Suppose there are 800,000 shares of common stock, how much is the dividend
per share?
2. A bank declared a dividend of ₱32.00 per share for the common stock. If the
common stock closes at ₱ 67.00, how large is the stock yield ratio on this investment?
3. Determine the amount of semi-annual coupon paid for a 4% bond with a face value
of ₱ 200,000.00 which matures after 6 years. How many coupons are paid?

Based on the concepts that you learn from this module, complete all the following
sentences.
1. Dividend per share is equal to _____________________.
2. The share in the company's profit is called ___________________.
3. A share of ownership in a company or corporation is known as __________________.
4. The present value of all cash inflows to the bondholder is called _________________.
5. The ratio of the dividends to the number of shares is the ________________________.
6. The rate per coupon payment period; denoted by r is ____________________________.
7. The present value of all cash inflows to the bondholder is _______________________.

78 (DO_Q2_GENMATH11_MODULE1_LESSON5)
8. The price of the bond at purchase time; denoted by P is _________________________.
9. Dividend is computed by multiplying the dividend percentage, par value and
___________________.
10. A stock is a security in that company that can also be referred to as equity or a
________________________.
11. The ratio of the annual dividend per share and the market value per
share is called ____________________.
12. An interest-bearing security which promises to pay amount of money
on a certain maturity date is _______________________.
13. A certain financial institution declared a ₱ 10,000,000.00 dividend for the
common stocks. If there are a total of 300,000 shares of common stocks, then
the
dividend per share is __________________.
14. Corporation Gen. Math, with a current market value of ₱ 95.00, give a dividend
of
₱ 15.00 per share of its common stock. The stock yield ratio is _______________.
15. The amount of the semi-annual coupon for a bond with a face value of
₱100,000 .00 that pays 15% payable semi-annual for its coupon is ________________.

Use your learning on stocks and bonds to answer the following.

A. The table below shows the data on 5 stockholders given the par value, the dividend
percentage and the number of shares of stock they have with a certain corporation.
Find the dividend of the 5 stockholders. Write your answers in a separate sheet.

Stockholder Par Value (in Dividend (%) Number of Shares

pesos)
A 75 2.5% 250
B 27 3.25% 300
C 45 1.58% 450
D 63 4.28% 500
E 38 2. 15% 600

B. Answer the following problems completely.

1. A certain company gave out ₱ 27 dividend per share for its common
stock. The market value of the stock is ₱ 88. Determine the stock yield
ratio.
2. A property holding declared a dividend of ₱ 8 per share for the common
stock. If the common stock closes at ₱ 82, how large is the stock yield
ratio on this investment?
3. Find the amount of the semi-annual coupon for a ₱ 400,000 bond which
pays 6% convertible semi-annually for its coupons.

79 (DO_Q2_GENMATH11_MODULE1_LESSON5)
Multiple Choice: Choose the letter of the best answer. Write the chosen letter on a
separate sheet of paper.

1. It is an interest-bearing security or debt instrument with a promise to pay back

the money with interest, which of the following choices?
A. Stock C. Fund
B. Share D. Bond

2. Which defines a share in the ownership of a company?

A. Bond C. Dividend
B. Coupon D. Stock

3. What do you call a place where stocks can be bought or sold?

A. Stock Market C. Corporation
B. Company D. Government

4. Which of the following is the amount payable on the maturity date?

A. Term of the bond C. Fair price of the bond
B. Par value (or face value) D. Assimilation

5. Which of the following ratio is used to compare a stock’s market value to its
book value?
A. Price to book ratio C. Price earning ratio
B. Dividend yield ratio D. Earning per share

6. It is the interest rate the bond issuer will use in computing the interest
payment, usually expressed in percent.
A. Coupon Date C. Dividend Rate
B. Dividend D. Maturity Date

7. It is the ratio of the annual dividend per share and the market value per share.
A. Coupon Amount C. Market Value
B. Dividend Rate D. Stock yield ratio

8. Why do people buy stocks?

A. There is no chance of a loss.
B. They expect to earn a return.
C. The government encourages them to buy stock.
D. They are guaranteed interest payment each year.

9.What is the best explanation of a bond?

A. It is an ownership interest in a company.
B. It is an equity or share in a company.
C. It represents a corporate or government debt obligation.
D. It is a debt instrument

10. Why would someone choose to put money in stocks as opposed to a savings
account that earns interest?
A. They are guaranteed a return in stocks.

80 (DO_Q2_GENMATH11_MODULE1_LESSON5)
 B. There is a potential to earn more money in the stock market.
C. They are guaranteed a return in a savings account.
D. There is a potential to earn more money in the savings account.

11. Several years ago, Company A issued bonds to raise funds so that it could buy
equipment. Those bonds were purchased by the Bank of the East. However,
now the Bank of the East has decided that it doesn’t want to have any assets
in the form of bonds, so it is selling off all the bonds that it owns. Which of
the following is most likely to be the result of this action?
A. Bond prices will increase.
B. Interest rates will increase.
C. The default risk of the bonds will increase.
D. The face value of the bonds will decrease.

12. A certain corporation declared a 4.5% dividend on a stock with a par value of
₱ 400.00. Mr. Reyes owns 100 shares of stocks with a par value of ₱ 400.00
How much is the dividend she received?
A. ₱ 1500.00 C. ₱ 1700.00
B. ₱ 1600.00 D. ₱ 1800.00

13. A certain financial institution declared a ₱ 80,000,000.00 dividend for the

common stocks. If there are a total of 500,000 shares of common stocks, how
much is the dividend per share?
A. ₱ 140.00 C. ₱ 160.00
B. ₱ 150.00 D. ₱ 170.00

14. A bank declared a dividend of ₱ 35.00 per share for the common stock. If the
common stock closes at ₱ 98.00, how large is the stock yield ratio on this
investment?
A. 0.36 C. 0.63
B. 0.39 D. 0.66

15. Determine the amount of semi-annual coupon paid for a 3% bond with a face
value of ₱ 100,000.00 which matures after 8 years. How many coupons are
paid?
A. 10 times C. 16 times
B. 13 times D. 19 times

81 (DO_Q2_GENMATH11_MODULE1_LESSON5)
Perform the task below.

Create a poster showing the importance of stocks and bonds for you as an
individual, for the community and for the nation.

Rubrics for Poster-making

Criteria 4 3 2 1
The poster All required Only few of the Several
includes all elements are required required
Required required included on elements are elements are
Elements elements as well the poster missing on the missing on the
as additional poster poster.
information
The poster is The poster is The poster is The poster is
exceptionally attractive in acceptable distractingly
attractive in terms of attractive messy or very
Attractiveness
terms of design, design, layout, though it may poorly
layout, and and neatness be a bit messy. designed. It is
neatness. not attractive.
The slogan is The slogan is The slogan is The slogan is
Slogan original and original but catchy but not not original
catchy not catchy. original. and catchy.
All graphics are All graphics All graphics Graphics do
related to the are related to relate to the not relate to
topic and make the topic and topic. One or the topic or
it easier to most make it two borrowed several
Graphics understand. All easier to graphics have borrowed
Relevance borrowed understand. sources noted. graphics do
graphics have Some graphics not have
note about their have a note source
source. about their citation.
source.
All items of Almost all Many items of Labels are too
importance on items of importance on small to view
the poster are importance on the poster are or no
clearly labeled the poster are clearly labeled important
Label
and can be read clearly labeled and can be items were
from at least 3 and can be read from at labeled.
ft away. read from at least 3 ft away.
least 3 ft away.
There are no There are 1-2 There are 3-4 There are
grammatical/sp grammatical/s grammatical/s more than 4
elling mistakes pelling pelling grammatical/s
Mechanics
on the poster. mistakes on mistakes on pelling
the poster. the poster. mistakes on
the poster.

82 (DO_Q2_GENMATH11_MODULE1_LESSON5)
83 (DO_Q2_GENMATH11_MODULE1_LESSON5)
1. Department of Education-Bureau of Learning Resources (DepEd-BLR) (2016)
General Mathematics Learner’s Material. Lexicon Press Inc., Philippines
2. Department of Education-Bureau of Learning Resources (DepEd-BLR) (2016)
General Mathematics Teacher’s Guide. Lexicon Press Inc., Philippines
3. Grace O. Aoanan, Ma. Lourdes P. Plarizan, Beverly T. Regidor, Simbulas, Lolly
Jean C., General Mathematics for Senior High School. Quezon City, Philippines.
C & E Publishing, Inc. 2016, 282-294.
4. Fernando B. Orines, Next Century Mathematics 11: General Mathematics.
Quezon City, Philippines. Phoenix Publishing House Inc. 2016, 41-47.
5. Orlando A. Oronce, General Mathematics 1st Edition. Quezon City, Philippines.
Rex Book Store, Inc. 2016, 243-260.
6. Jose-Dilao, S. & Orines, F.B. (2009). Advanced Algebra, Trigonometry and
Statistics. SD Publications, Inc., Quezon City, Philippines
7. Fernandez, P.L, et. Al. (2007). A Course in Freshman Algebra. Ateneo de Manila
University Press, Quezon City, Philippines
8. Santos, Durwin C. & Biason, Ma. Garnet P. (2016). Math Activated: Engage
Yourself and Our World: General Math Senior High School. Salesiana Books by
Don Bosco Press Inc., Makity City, Philippines
9. (http://www.pse.com.ph/stockMarket/home.html). Stock Basics Tutorial,
Accessed from http://www.investopedia.com/university/stocks/
10.Investopedia staff (n.d.) Bond basics: What are bonds? Accessed from
http://www.investopedia.com/university/bonds/bonds1.as

84 (DO_Q2_GENMATH11_MODULE1_LESSON5)
 SENIOR HIGH SCHOOL

(LEARNING
General AREA)
Mathematics
(QUARTER NUMBER)
Quarter 2 Module 1
(MODULE NUMBER)
Lesson 6:
Business and Consumer Loans

85 (DO_Q2_GENMATH11_MODULE1_LESSON5)
Targets:
1. illustrates business and consumer loans (M11GM-IIf-1);
2. distinguishes between business and consumer loans (M11GM-IIf-2);
3. solves problems involving business and consumer loans (amortization,
mortgage) (M11GM-IIf-3).

Choose the letter of the best answer. Write your answer in your notebook.
_____1.) It is the term used for a type of loan that is offered to businesses and
individuals or other retail customers.
A. Card Credit B. Business Credit C. Bank Credit D. Consumer Credit
_____2.) The following are the considerations that a bank will take into account
when reviewing loan eligibility EXCEPT _______.
A. Character B. Capital C. Co-maker D. Collateral
_____3.) These are the commercial terms of a loan transaction such as the principal
amount, interest rate, and the term of the loan.
A. Conditions B. Collateral C. Capacity D. Capital
_____4.) It is a loan given to customers for personal, family or consumable items.
A. consumer loan B. business loan C. bank loan D. debit
_____5.) The following are types of consumer loans EXCEPT ________.
A. housing loan B. auto loan C. auto loan D. corporate loan
_____6.) It is probably the biggest loan one can have. It is usually obtained for a
house, a house and lot, or for a machinery.
A. lost B. amortization C. debt financing D. mortgage
_____7.) It is a report that shows how much a business earned or lost from its
operation during a given period of time.
A. income statement B. cost report C. amortization table D. revenue
_____8.) Mortgage loan is when you use your property as collateral for a loan from a
financial institution. The down payment is usually a certain percent of the
purchase price of the property, which is called _______.
A. financial statement B. amount due C. buyer’s equity D. expenses
_____9.) These banks offer sophisticated banking services but are more specialized.
They focus on trading, fund management, and portfolio management.
A. investment banks B. commercial banks C. thrift banks D. rural banks

86 (DO_Q2_GENMATH11_MODULE1_LESSON6)
_____10.) Find the simple interest on a Php 2500.00 loan for 3 years at 9%.
A. Php 7500.00 B. Php 675.00 C. 27% D. 0.12%
_____11.) Zach borrowed Php 3,000.00 at 11% interest for 3 years. Find the
maturity value.
A. Php 33000.00 B. Php 9000.00 C. Php 3990.00 D. Php 990.00
_____12.) It is a money lent specifically for a business purpose. It may be used to
start a business or to have a business expansion.
A. consumer loan B. installment C. equity D. business loan
_____13.) Monthly payment of Php2,000.00 is used to settle a loan for 7 months at
9% compounded monthly. Find the present value.
A. Php13,196.43 B. Php13,589.28 C. Php13,625.45 D. Php13,894.37
_____14.) Methuselah Grace decided to take her family for a vacation. To cover the
expenses, she decided to apply for a loan. This situation illustrates
________.
A. business loan B. consumer loan C. both a and b D. neither a nor b
_____15.) Mr. Enock wants to have another branch of his car wash shop. He
decided to apply for a loan that he can use to pay for the car wash of the
new branch. This situation illustrates ________.
A. business loan B. consumer loan C. both a and b D. neither a nor b

87 (DO_Q2_GENMATH11_MODULE1_LESSON6)
 Lesson Business and Consumer Loans
6

In business, people who find themselves in need of cash in their personal or

business operations borrow money and agree to pay a certain percentage for the
privilege of using the money. After the interest period is over, the money-lender would
receive the original amount of the loan together with the interest. It is in this module,
that business and consumer loans play an important role wherein borrowers need
to pay interest on the money that they borrow.

I. Direction: Find the following basic terms related to the topic of this module that
you are most likely familiar with.
a. CASH c. RATE e. PRINCIPAL
b. INTEREST d. TIME
E S T R A H R B T E
T S R Q S N P O N M
A U V A L O A R E T
R I C E M I T H M E
E L A P I C N I R P
I N T E R E S T R M

The most important factor in setting up a business or consumer loans is

choosing the right kind of thing. Now that there are loans that is offered to
businesses and individuals knows their mathematical skills, interests, hobbies,
and inclinations are, and also on what they’re good at, there is a need to plan on
how to start and run it, and at the same time make money out of it.
A business is much greater than a job. It actually means being involved with
your customers who will rely on your products and services. And suppose that you
earned from your business, as a result, you spend, give, invest, and save that you
may now decide for your personal matters.
Suppose you are planning to buy a lot, for personal or business use and
secure a mortgage given that the price of the lot is Php 1, 500, 000.00. The real
estate dealer is asking for a 30% down payment.
a. How much is the down payment?
b. How much would be the amount of the mortgage loan?

88 (DO_Q2_GENMATH11_MODULE1_LESSON6)
 We have learned previously that there are computations on simple and
compound interests, simple and general annuities, there are FIVE C’s of Credit that
a lender or any lending institution will take into account when reviewing loan
eligibility. The following criteria help lenders methodically decide on whether to
grant a loan to a business or retail customer (Solano, 2019).
1. Character – It refers to the reputation of the borrower.
2. Capacity – It is the ability of the borrower to repay a
loan by assessing the income against the debts of the
borrower.

3. Capital – This is what is left with a borrower when the

liabilities are deducted from the assets. Also, it might
be a potential investment.

4. Collateral – This is the lender’s security in a loan transaction.

5. Conditions – These are the commercial terms of a loan transaction such as the
principal amount, interest rate, and the term of the loan.

Meanwhile, when you are getting started in a loan transaction, consider that
a business loan is a money lent specifically for a business purpose. It may be used
to start a business or to have a business expansion.

The following are type of business loans in the Philippines:

1. Corporate loan 3. SME (Small and Medium Enterprises) loan
2. Commercial loan

Lending to individuals is not much different from business loans. A

consumer loan is a loan given to customers for personal, family, or consumable
items such as a car and a home.
The following are types of consumer loans in the Philippines:
1. Housing or mortgage loan 3. Salary or personal loan
2. Auto or car loan 4. Credit card

And as the basic terms that involve the business loans and consumer loans,
they also differ in some aspects like collateral, guarantor, documentation, terms,
and follow-up. The table below summarizes these differences (Oronce, 2016).

89 (DO_Q2_GENMATH11_MODULE1_LESSON6)
 Differences between Business Loan and Consumer Loan

Business Loan Consumer Loan

1. Collateral real estate, equipment,
furniture, fixtures,
inventory, or personal real estate
assets of the business
owners
2. Guarantor the business owners have does not require a
to sign the loan as guarantor
guarantors
3. Documentation requires credit report, tax requires a credit report or
returns, and the last tax returns
three years of financial
statements
4. Terms shorter and includes a longer than the business
higher interest rate loan
5. Follow-up annual reviews of the no further follow-up once
relationship are often the loan is released
conducted
Examples:
1. Enoch, a dedicated and determined person who recently finished his online short
course on ABC-Recognized Educational Scholarship is planning to put his tutorial
learning center. He was advised by Jabez, his financial coach, to apply for a bank
loan. Which loan will he apply? A business loan or a consumer loan?
Answer: Enoch needs a business loan since he is planning to use the money to
start his tutorial learning center.
2. Mrs. Glazee is an environmentalist who is planning to conduct a paper tree
planting in Brgy. Ilauran. She wants to cover all the expenses for this activity but
she realized that her financial standing is not enough. Hence, she needs to borrow
money to finance this advocacy. Is she going to apply for a business loan or a
consumer loan?
Answer: Mrs. Glazee will apply for a consumer loan since the money she will
borrow is for the finances of her activity.
Here are some examples of problems involving business and consumer loans:

1. Mr. Batas borrowed Php 2, 000, 000.00 for the expansion of his business. The
effective rate of interest is 5%. The loan is to be repaid in full after one year. How
much is to be paid after one year?
Given: P = Php 2, 000, 000 n=2 j = 5% = 0.05
Find F. F = 𝑃(1 + 𝑗)𝑛
= 2, 000, 000 (1 + 0.05)1
= 2, 000, 000 (1.05)1
= 2, 100, 000
An amount of Php 2, 100, 000.00 must be paid after one year.

90 (DO_Q2_GENMATH11_MODULE1_LESSON6)
2. XYZ Bank’s credit card zero-percent (0%) interest installment price of a gadget
was Php 40, 000.00 for a term of 18 months. Find the monthly amortization or
payment.
Solution: Compute the absolutely zero percent (0%) interest installment transaction
by applying the formula:

Given: Purchase price = Php 40, 000.00 term = 18

Find the Monthly Amortization = Purchase price ÷ term

= Php 40, 000 ÷ 18
= Php 2, 222.22
Therefore, the monthly payment is Php 2, 222.22.

3. Monthly payment of Php 2, 000.00 is used to settle a loan for 7 months at 15%
compounded monthly. Find the present value of the loan and construct an
amortization schedule.
0.18
Solution: R = Php 2, 000.00 i= = 0.0125 r = 0.15
12
n=7 m = 12

Required: A and amortization schedule

1−(1+𝑖)−𝑛
Formula: A = 𝑅[ 𝑖
]

1−(1+0.0125)−7
Computation: A = 2000[ 0.0125
] = 2000(6.66272584) = Php 13, 325.45

Thus, the present value of the loan to be amortized is Php 13, 325.45 .

Amortization Schedule

Period Unpaid Balance Interest Paid Periodic Payment Principal Repaid

1 Php13,325.45 Php166.57 Php2,000.00 Php1,833.43
2 Php11,492.02 Php143.65 Php2,000.00 Php1,856.35
3 Php9,635.67 Php120.45 Php2,000.00 Php1,879.55
4 Php7,756.12 Php96.95 Php2,000.00 Php1,903.05
5 Php5,853.07 Php73.16 Php2,000.00 Php1,926.84
6 Php3,926.23 Php49.08 Php2,000.00 Php1,950.92
7 Php1,975.31 Php24.69 Php2,000.00 Php1,975.31
TOTAL Php674.55 Php14,000.00 Php13,325.45

91 (DO_Q2_GENMATH11_MODULE1_LESSON6)
 I. Identify whether the following illustrates a business loan or a consumer
loan. Write BL if the situation illustrates a business loan and CL if it illustrates a
consumer loan.
_____1. Mr. Mazo plans to have a computer shop. He wants to borrow some money
form the bank to buy the equipment for the computer shop.
_____2. Kaye is planning to take up Medicine as her college course. To support her,
Mr. and Mrs. Nelson, her parents, had a loan transaction from the bank for
her financial needs.
_____3. Mr. Onin wants to renovate their 150-year old ancestral house in San
Agustin, Romblon which was also identified as a historical house in the
province. He wants to repair the ceiling in preparation for the rainy season.
He will use some money from the bank to finance this plan.
_____4. Instead of working as an Assistant Manager in a certain company, Mrs. De
Juan decided to leave her job and put up a coffee shop instead. To finance
her start-up coffee shop, she borrowed money from a commercial bank.
_____5. Ms. Heny owns an ice cream parlor shop. She wants to put another ice
cream shop near a mall in Valenzuela City. She decided to have a loan
amounting to Php 500, 000.00 to start up the next business location.
II. Identify whether the following statements are TRUE or FALSE. Write T if
the underlined word(s) is/are correct for the statement, otherwise write F if it is
incorrect.
_____1. Capacity refers to the reputation of the borrower.
_____2. Business loan is a money lent specifically for a business purpose.
_____3. Consumer loan has longer term of payment than business loan.
_____4. Housing and auto loans are examples of business loans.
_____5. Guarantors are the assets used to secure a loan which include real-estates
or investments.

A. Using your own words, write the things that you have learned from the topic by
completing the phrase to form a statement. Write your answer in your notebook.

A consumer loan is intended for

_________________________________________________________________________
_________________________________________________________________________

B. Write two questions that you want to ask about business loans.
_____________________________________________________________________________
_____________________________________________________________________________

92 (DO_Q2_GENMATH11_MODULE1_LESSON6)
Solve.
1. Assume that you wish to purchase a secondhand car worth ₱350,000.00 and the
seller requires a 30% down payment. How much is the down payment? How much
would be the amount of the mortgage loan? Write your solution and answer in your
notebook.
To compute for the down payment:
Down payment = Purchase price x Down payment %
Mortgage loan = Purchase price – Down payment

Choose the letter of the best answer. Write your answer in your notebook.
_____1.) It is the borrowing capacity provided to an individual/business by the
banking system.
A. Bank Credit B. Business Credit C. Card Credit D. Consumer Credit
_____2.) The following are the loan application process in a bank EXCEPT _______.
A. Borrower B. Loan Officer C. Credit Committee D. Character
_____3.) This is the lender’s security in a loan transaction.
A. Conditions B. Collateral C. Capacity D. Capital
_____4.) It is a loan given to customers for personal, family, or consumable items
such as a car and a home.
A. debit B. credit card C. bank loan D. consumer loan
_____5.) The following are types of business loans EXCEPT ________.
A. SME loan B. auto loan C. commercial loan D. corporate loan
_____6.) The gradual extinction of a debt, principal and interest, by system of equal
periodic payments or installment payments due at the ends of equal
intervals of time.
A. amortization B. mortgage C. debt financing D. equity
_____7.) The amount left to be paid at a certain payment interval.
A. amount due B. outstanding balance C. due date D. income
_____8.) This is usually the certain percent of the purchase price of the property.
A. down payment B. balance C. expenses D. account
_____9.) These banks have mostly retail customers. Its main business is lending.
Many transactions take place in this bank, and it is usually not very large
in size.
A. investment banks B. commercial banks C. thrift banks D. rural banks

93 (DO_Q2_GENMATH11_MODULE1_LESSON6)
_____10.) Find the simple interest on a Php 25000.00 loan for 3 years at 8%.
A. Php 31000.00 B. Php 6000.00 C. 24% D. 0.24%
_____11.) Bing borrowed Php 5,000.00 at 8% interest for 2 years. Find the interest.
A. Php 10000.00 B. Php 5000.00 C. Php 800.00 D. Php 400.00
_____12.) It is a debt that the company is required to repay according to the loan’s
terms and conditions.
A. business loan B. down payment C. credit card D. consumer loan
_____13.) Monthly payment of Php2,000.00 is used to settle a loan for 7 months at
18% compounded monthly. Find the present value.
A. Php13,589.28 B. Php13,425.45 C. Php13,215.43 D. Php13,196.43
_____14.) Criz Chan renovated his house for Php 500,000. This was made possible
because of an approved loan worth Php 250, 000. This situation
illustrates _______.
A. consumer loan B. business loan C. both a and b D. neither a nor b
_____15.) Mr. Macalapo runs a trucking business. He wants to buy four more
trucks for the expansion of his business. He applied for a loan in a bank
worth Php 7, 000, 000.00. This situation illustrates ________.
A. consumer loan B. business loan C. both a and b D. neither a nor b

To see whether you imbibe the idea of business loan and consumer loan
plan, do, study and act on the following application activity.
A. Role Play
Show the loan application process in a bank where certain persons are doing
a business loan and a consumer loan. Please be guided by these rubrics.

5 4 3 2 1
Excellent Very Good Good Poor Very Poor
The The The The The presentation
presentation presentation presentation presentation was
was clear, was clear and was clear and was not clear incomprehensible.
concise, and concise. The concise. The and coherent. The lack of
convincing. insights and insights are The insights insights and
The insights illustrations, acceptable and illustrations
and however are but illustrations showed poor
illustrations not so illustrations were teamwork and
demonstrate original and could have inadequate inability to
the quality of not so made it more and showed comprehend the
analysis of appealing appealing poor activity.
the group. and and teamwork.
convincing. convincing.

94 (DO_Q2_GENMATH11_MODULE1_LESSON6)
(DO_Q2_GENMATH11_MODULE1_LESSON6) 95
What I Know
1. D
2. C
3. A
4. A
5. D
6. D
7. A
8. C
9. A
Assessment 10. B
1. A 11. C
2. D 12. D
3. B 13. B
4. D 14. B
5. B 15. A
6. A What’s New
7. B
8. A
9. B
10. B
11. C What’s More
12. A I. 1. BL II. 1. F
13. D 2. CL 2. T
14. A 3. CL 3. T
15. B 4. BL 4. F
5. BL 5. F
What I Have Learned
Additional Activities Answers may vary.
What I Can Do
Answers may vary based from the Down Payment = Php 105, 000.00
scoring rubrics. Mortgage Loan = Php 245, 000.00
Books:

Aoana, Grace O., Cervillon, Carmelita C. & Lomboy, Buencamino O. (2010). Mathematics of
Investment. A Work Text. Mandaluyong National Book Store.

Gabuyo, Yonardo A. et. al. (2008). Business Mathematics: A Complete Textbook and Workbook.
Mandaluyong. Books Atbp. Publishing Corp.

Gallo, Michael A. & Setek, Jr. William M. (2005). Fundamentals of Mathematics. Tenth Edition. New
Jersey. Pearson Education Inc. Pearson Prentice Hall.

Isidro, Jefferson D., Mariano, Oliver G. & Solano, Irene P. (2019). General Mathematics.Second
Edition. Makati: DIWA Learning Systems Inc.

King, David. (2002). You Can Be Rich. Worldlink Books. Worldlink Marketing Corporation.

Lopez-Mariano, Norma D. Ph.D. (2016). Business Mathematics. First Edition. Manila: Rex Bookstore
Inc.

Oronce, Orlando A. (2016). General Mathematics. First Edition. Manila: Rex Bookstore Inc.

Online Sources:

https://www.youtube.com/watch?v=B3WzxXGspbQ. Accessed July 12, 2022.

https://www.youtube.com/watch?v=8VtQvxYVTwk. Accessed July 12, 2022.

96 (DO_Q2_GENMATH11_MODULE1_LESSON6)
 SENIOR HIGH SCHOOL

General Mathematics
(LEARNING AREA)
Quarter 2 Module
(QUARTER NUMBER) 1
Lesson 7:
(MODULE NUMBER)
Propositions and Logical
Operators

97 (DO_Q2_GENMATH11_MODULE1_LESSON6)
2
What I Need to Know

After going through this module, you are expected to:

1. illustrate and symbolize propositions;
2. distinguish between simple and compound propositions (M11GM-IIg-3);
and
3. perform the different types of operations on propositions (M11GM-IIg-4).

What I Know
Directions: Read and analyze each item carefully then write the letter that
corresponds to the correct answer.
For items 1 to 2, refer to the statements below.
i. The election was held last May 9, 2022.
ii. I am lying.
iii. Is this seat occupied?
iv. It is raining.
1. Which of the above statements are propositions?
A. i only B. i and iv C. ii D. ii and iii
2. Which of the above statements are NOT propositions?
A. i only B. i and iv C. ii D. ii and iii
3. Why is the statement “𝑥 + 𝑦 = 4” not considered as a proposition?
A. It is not a declarative sentence.
B. It is always false.
C. It contains variables.
D. Its truth value depends on the value of 𝑥 and 𝑦.
4. What is the other term for a simple proposition?
A. fundamental proposition C. atomic proposition
B. foundational proposition D. component proposition
For items 5 and 6, consider the propositions below.
i. John likes swimming and Jay loves basketball.
ii. Mark goes to the gym weekly.
iii. The given sets are not disjoint.
iv. The angles are either complementary or supplementary.
5. Which of the given propositions is/simple?
A. ii and iii B. ii, iii, and iv C. i and iv D. i only
6. Which of the given propositions is/are compound?
A. ii and iii B. ii, iii, and iv C. i and iv D. i only
7. What is the correct symbol for the disjunction of two propositions?
A. ∧ B. ∼ C. ∨ D. →
8. What is the correct symbol for the negation of a proposition?
A. ∧ B. ∼ C. ∨ D. →

98 (DO_Q2_GENMATH11_MODULE1_LESSON7)
For items 9 to 12, refer to the propositions below.
𝑝: A heptagon has six sides.
𝑞: A square is a rhombus.

𝑟: Any integer is divisible by itself.

9. Which of the following is the negation of 𝑝?
A. A heptagon has seven sides. C. A hexagon does not have six sides.
B. A hexagon has six sides. D. A heptagon does not have six sides
10. Which statement refers to 𝑞 ∧ 𝑟?
A. A square is a rhombus or any integer is divisible by itself.
B. A square is a rhombus and any integer is divisible by itself.
C. A square is not a rhombus and any integer is not divisible by itself.
D. A square is not a rhombus or any integer is not divisible by itself.
11. How is the proposition “A square is not a rhombus or any integer is divisible
by itself.” written in symbols?
A. ∼ 𝑞 ∨ 𝑟 B. ∼ 𝑞 ∧ 𝑟 C. ∼ (𝑞 ∨ 𝑟) D. ∼ (𝑞 ∧ 𝑟)
12. Which of the following denotes the proposition “Any integer is divisible by itself
and a heptagon does not have six sides.”?
A. 𝑟 ∨ 𝑝 B. 𝑟 ∨∼ 𝑝 C. ∼ 𝑟 ∧ 𝑝 D. ∼ 𝑟 ∧∼ 𝑝
13. What logical connective makes use of the word “and” to form a compound
proposition?
A. negation B. implication C. conjunction D. disjunction
14. What logical operator gives the opposite sense of a particular proposition?
A. negation B. implication C. conjunction D. disjunction
15. Which of the logical connectives uses the word “or” in forming a compound
proposition?
A. negation B. implication C. conjunction D. disjunction

Lesson
Propositions and Logical Operators
7

Your day-to-day conversations with the people around you involve sentences,
phrases, or expressions that allow you to convey your thoughts. These statements
may come in different forms and natures such as from being simple to complex, true
or false, as well as valid or not. In this lesson, you will become familiar with the
language of mathematical logic and their structure which are somewhat similar to
the ordinary statements that you use daily.

99 (DO_Q2_GENMATH11_MODULE1_LESSON7)
 What’s In

Determine if the given sentence is declarative or not.

1. Valenzuela City is found in Metro Manila.
2. Do you live in barangay Ugong?
3. Kindly write the zip code of your residence here.
4. One of the good places to visit in Valenzuela is the Fatima Avenue.
5. Charlene loves matcha and Janna likes chocolate.

What’s New

Study the Venn Diagram below and the statements given on its right.

7
a. The elements of Set A are divisible by 2.
10
6 3 b. Twelve is divisible by 6.
2 c. The elements of Set B are divisible by 3.
d. Five is divisible by 3.
9 e. Seven is divisible by 2.
12
4
8

5
A B

Using the above statements, form a new statement by completing the following.
1. (Statement a)_____ and (Statement c)_____.
2. (Statement b)_____ or (Statement d)_____.
3. It is not the case that (Statement e)_____.

What is It

The statements given in the What’s In section as well as those that you just
formed are examples of what we call propositions. A proposition is a declarative
sentence that is either true or false, but not both. The table below presents a few
examples and non-examples of a proposition.

Proposition Not a Proposition

The election was held last May 9. Put down your phone.
The domain of a linear function is the Is this seat vacant?
set of all real numbers.
A square is a rectangle. I am lying.

100 (DO_Q2_GENMATH11_MODULE1_LESSON7)
 Commonly, propositions are denoted using propositional variables. A
propositional variable usually appears as a lowercase italicized letter. For instance,
we can say that the proposition 𝑝 is the statement “March has 31 days.”. Formally
we can write that as,
𝑝: March has 31 days.
In the same manner, we may let 𝑞 be the statement “Vertical angles are congruent.”,
and write it as,
𝑞: Vertical angles are congruent.
Furthermore, a proposition can either be considered as a simple proposition
or a compound proposition. A simple proposition is a proposition that can no longer
be broken any further into other component propositions. Note that simple
propositions are also known as atomic propositions since they form the foundation
of other possible propositions. The propositions in the above table are examples of a
simple proposition.
On the other hand, a compound proposition is a proposition that is formed
using logical operators or logical connectives. Listed below are the common
logical operators that involve propositions 𝑝 and 𝑞.

not 𝑝
𝑝 and 𝑞
𝑝 or 𝑞
The first one is called the negation. The negation of a proposition 𝑝, denoted
by ~𝑝 (or ¬𝑝), is the statement “It is not the case that 𝑝.”. The proposition ~𝑝 is read
as “not 𝑝” while the symbol ~ is called tilde (and the symbol ¬ is called tailed dash).
As an example, if we let 𝑝 be the proposition “Seven is divisible by 2.”, then,

~𝑝: It is not the case that seven is divisible by 2.

Put simply,
~𝑝: Seven is not divisible by 2.
Other examples of negation are given below.

Proposition Negation
𝑝: Adjacent angles are supplementary. ~𝑝: Adjacent angles are not
supplementary.
𝑞: Disjoint sets have no common ~𝑞: Disjoint sets have a common
element. element.
𝑟: 𝑥 < 5. ~𝑟: 𝑥 ≥ 5.

The second one is called conjunction. The conjunction of the propositions 𝑝

and 𝑞, denoted by 𝑝 ∧ 𝑞, is the statement “𝑝 and 𝑞.”. The symbol ∧ is called caret. As
an illustration, let
𝑝: The elements of set A are divisible by 2.
𝑞: The elements of set B are divisible by 3.

101 (DO_Q2_GENMATH11_MODULE1_LESSON7)
then, 𝑝 ∧ 𝑞 is the proposition “The elements of set A are divisible by 2 and the
elements of set B are divisible by 3.”. A few other illustrations are given below.

Propositions Conjunction
𝑝: The multiples of 4 are even. 𝑝 ∧ 𝑟: The multiples of 4 are even and
𝑞: Zero is irrational. three is odd.
𝑟: Three is odd.
∼ 𝑞 ∧ 𝑝: Zero is rational and the
multiples of 4 are even.

The third one is called disjunction. The disjunction of the propositions 𝑝 and
𝑞, denoted by 𝑝 ∨ 𝑞, is the statement “𝑝 or 𝑞.”. The symbol ∨ is called reversed caret.
To illustrate, let
𝑝: Twelve is divisible by 6.
𝑞: Five is divisible by 3.

then, 𝑝 ∨ 𝑞 is the proposition “Twelve is divisible by 6 or five is divisible by 3.”. Some

additional illustrations are given below.

Propositions Conjunction
𝑝: The multiples of 4 are even. 𝑝 ∨ 𝑞: The multiples of 4 are even or zero
𝑞: Zero is irrational. is irrational.
𝑟: Three is odd.
𝑞 ∨∼ 𝑟: Zero is irrational or three is even.

Notice that in performing operations on propositions, the ideas in the component

propositions need not necessarily be related to one another unlike in using
conjunctions in the usual English language.

What’s More
A. Tell whether the given statement is a proposition or not.
1. One is a prime number.
2. Did you lock the door?
3. The graph of a polynomial function is continuous.
4. 𝑥 + 4 = 7.
5. An empty set has no element.
B. Define each proposition using the statements below.
𝑝: 32 = 6.
𝑞: Parallel lines do not intersect.
𝑟: The Philippines is an archipelago.
1. ∼ 𝑝
2. ∼ 𝑞
3. ∼ 𝑝 ∧ 𝑞

102 (DO_Q2_GENMATH11_MODULE1_LESSON7)
 4. 𝑝 ∨ 𝑟
5. (𝑝 ∨ 𝑞) ∧∼ 𝑟

What I Have Learned

Answer the following questions.

1. When is a statement not a proposition?
2. What is the difference between a compound and a simple proposition?
3. How are compound propositions formed?

What I Can Do

A. Let 𝑝: Descartes is a chemist.

𝑞: Pacquiao is a boxer.
𝑟: Padilla is an actor.
Write the following in propositions in symbolic form.
1. Descartes is not a chemist.
2. Pacquiao is a boxer and Padilla is an actor.
3. Padilla is an actor or Descartes is a chemist.
4. Padilla is not an actor and Descartes is not a chemist.
5. Either Pacquiao is a boxer, or Descartes is a chemist and Padilla is an
actor.
B. Using the Venn Diagram in the What’s In section, give the following.
1. a proposition
2. a sentence that is not a proposition
3. a negation
4. a conjunction
5. a disjunction

Assessment
Directions: Read and analyze each item carefully then write the letter that
corresponds to the correct answer.
For items 1 to 2, refer to the statements below.
i. The election was held last May 9, 2022.
ii. I am lying.
iii. Is this seat occupied?
iv. It is raining.
1. Which of the above statements are propositions?
A. i only B. i and iv C. ii D. ii and iii

103 (DO_Q2_GENMATH11_MODULE1_LESSON7)
 2. Which of the above statements are NOT propositions?
A. i only B. i and iv C. ii D. ii and iii
3. Why is the statement “𝑥 + 𝑦 = 4” not considered as a proposition?
A. It is not a declarative sentence.
B. It is always false.
C. It contains variables.
D. Its truth value depends on the value of 𝑥 and 𝑦.
4. What is the other term for a simple proposition?
A. fundamental proposition C. atomic proposition
B. foundational proposition D. component proposition

For items 5 and 6, consider the propositions below.

i. John likes swimming and Jay loves basketball.
ii. Mark goes to the gym weekly.
iii. The given sets are not disjoint.
iv. The angles are either complementary or supplementary.
5. Which of the given propositions is/simple?
A. ii and iii B. ii, iii, and iv C. i and iv D. i only
6. Which of the given propositions is/are compound?
A. ii and iii B. ii, iii, and iv C. i and iv D. i only
7. What is the correct symbol for the disjunction of two propositions?
A. ∧ B. ∼ C. ∨ D. →
8. What is the correct symbol for the negation of a proposition?
A. ∧ B. ∼ C. ∨ D. →

For items 9 to 12, refer to the propositions below.

𝑝: A heptagon has six sides.
𝑞: A square is a rhombus.
𝑟: Any integer is divisible by itself.

9. Which of the following is the negation of 𝑝?

A. A heptagon has seven sides. C. A hexagon does not have six sides.
B. A hexagon has six sides. D. A heptagon does not have six sides
10. Which statement refers to 𝑞 ∧ 𝑟?
A. A square is a rhombus or any integer is divisible by itself.
B. A square is a rhombus and any integer is divisible by itself.
C. A square is not a rhombus and any integer is not divisible by itself.
D. A square is not a rhombus or any integer is not divisible by itself.
11. How is the proposition “A square is not a rhombus or any integer is divisible
by itself.” written in symbols?
A. ∼ 𝑞 ∨ 𝑟 B. ∼ 𝑞 ∧ 𝑟 C. ∼ (𝑞 ∨ 𝑟) D. ∼ (𝑞 ∧ 𝑟)
12. Which of the following denotes the proposition “Any integer is divisible by itself
and a heptagon does not have six sides.”?
A. 𝑟 ∨ 𝑝 B. 𝑟 ∨∼ 𝑝 C. ∼ 𝑟 ∧ 𝑝 D. ∼ 𝑟 ∧∼ 𝑝
13. What logical connective makes use of the word “and” to form a compound
proposition?
A. negation B. implication C. conjunction D. disjunction

104 (DO_Q2_GENMATH11_MODULE1_LESSON7)
14. What logical operator gives the opposite sense of a particular proposition?
A. negation B. implication C. conjunction D. disjunction
15. Which of the logical connectives uses the word “or” in forming a compound
proposition?
A. negation B. implication C. conjunction D. disjunction

Additional Activities
1. Consider the propositions 𝑝 and 𝑞 below.
𝑝: John and Mary are enrolled in PLV.
𝑞: Austin is going to Cebu or Davao.
Is 𝑝 a simple proposition? What about 𝑞? Justify your answers.

2. Consider the proposition “Every pair of angles forming a linear pair are
supplementary.”. Why is it incorrect to say that the negation of the
given proposition is “Every pair of angles forming a linear pair are not
supplementary.”?

105 (DO_Q2_GENMATH11_MODULE1_LESSON7)
(DO_Q2_GENMATH11_MODULE1_LESSON7) 106
What I Have Learned
1. A statement is NOT a proposition if it fails to satisfy one of the following: (a)
being a declarative sentence; and (b) is either true or false but not both.
2. A simple proposition cannot be broken any further into simpler ones, but a
compound proposition is composed of two or more propositions and a logical
connective.
3. A compound proposition is formed using logical operators such as
conjunction and disjunction.
What’s In
What’s More 1. Declarative
2. Not declarative
A. 1. Proposition
2. Not a proposition 3. Not declarative
4. Declarative
3. Proposition
5. Declarative
4. Not a proposition
5. Proposition
B. 1. 32 ≠ 6 What I Know/Assessment
2. Parallel lines intersect.
3. 32 ≠ 6 and parallel lines do not 1. B 11. A
intersect. 2. D 12. B
4. 32 = 6 or the Philippines is an 3. D 13. C
archipelago. 4. C 14. A
5. A 15. D
5. 32 = 6 or parallel lines do not
6. C
intersect, and the Philippines is not
7. C
an archipelago. 8. B
9. D
10. B
(DO_Q2_GENMATH11_MODULE1_LESSON7) 107
Additional Activities
1. 𝑝 and 𝑞 are not simple propositions, they
can be rewritten as “John is enrolled in
PLV and Mary is enrolled in PLV.” and
“Austin is going to Cebu or Austin is
going to Davao.”, respectively. Hence, they
are compound propositions.
What I Can Do
2. The negation of a proposition containing a
universal quantifier is a proposition A. 1. ~𝑝
containing an existential quantifier. Thus, 2. 𝑞 ∧ 𝑟
the correct negation of the given 3. 𝑟 ∨ 𝑝
statement is “There is a pair of angles 4. ∼ 𝑟 ∧∼ 𝑝
forming a linear pair that is not
5. 𝑞 ∨ (𝑝 ∧ 𝑟)
supplementary.”.
B. Answers may vary
Crisologo, L.A., Hao, L., Miro, E.D., Ocampo, S., Palomo, E., and Tresvalles, R.
(2016). Teaching Guide for Senior High School – General Mathematics. Commission
on Higher Education. Quezon City
Isidro, J., Solano, I., and Mariano, O. (2019). General Mathematics 2nd edition. DIWA
Learning Systems Inc. Makati City
Rosen, K. H. (2012). Discrete Mathematics and Its Applications 7th edition. McGraw
Hill. New York.

108 (DO_Q2_GENMATH11_MODULE1_LESSON7)
 SENIOR HIGH SCHOOL

General Mathematics
(LEARNING AREA)
Quarter 2 Module
(QUARTER NUMBER) 1
Lesson 8:
(MODULE NUMBER)
Truth Values and Conditional
Propositions

109 (DO_Q2_GENMATH11_MODULE1_LESSON7)
 What I Need to Know

After going through this module, you are expected to:

1. determine the truth values of propositions (M11GM-IIh-1); and
2. illustrate the different forms of conditional propositions (M11GM-IIh-2).

What I Know
Directions: Read and analyze each item carefully then write the letter that
corresponds to the correct answer.
1. If a proposition 𝑝 is true, what is the truth value of its negation?
A. false B. true C. both D. neither
2. Let 𝑝 and 𝑞 be both false propositions, what is the truth value of 𝑝 → 𝑞?
A. false B. true C. both D. neither
3. Suppose 𝑝 is a true proposition and 𝑞 is a false proposition, what is the truth
value of 𝑝 ∧ 𝑞?
A. false B. true C. both D. neither
For items 4 to 7, consider the truth table below.

𝒑 𝒒 𝒓 ∼𝒑 ∼𝒒 ∼ 𝒑 ∧∼ 𝒒 ∼𝒓 ∼ 𝒓 ∨ (∼ 𝒑 ∧∼ 𝒒)
T T T F F F F F
T T F F F F T
T F T F F F F
T F F F T F T T
F T T T F F F
F T F T F F T T
F F T T T T F
F F F T T T T T
4. What is the missing truth value in the fifth column?
A. T B. F C. any will do D. neither
5. What should be the truth value in the column for
∼ 𝑝 ∧∼ 𝑞?
A. F B. T C. any will do D. neither
6. Which of the following must be the truth value for the second row in the
column for ∼ 𝑟?
A. T B. F C. any will do D. neither
7. What must be the truth value that completes the last column?
A. F B. T C. any will do D. neither
8. Which of the following is the symbolic form for the inverse of the conditional
𝑝 → 𝑞?
A. ~𝑝 → 𝑞 B. 𝑞 → 𝑝 C. ~𝑝 → ~𝑞 D. ~𝑞 → ~𝑝
9. Suppose a conditional 𝑝 → 𝑞 is false, which of the following should also be
false?
A. converse B. contrapositive C. inverse D. none of these

110 (DO_Q2_GENMATH11_MODULE1_LESSON8)
 10. What is the truth value of the statement “If an angle is right, then its measure
is at least 90°.”?
A. T B. F C. any will do D. neither

For items 11 to 14, consider the statement “The intersection of disjoint sets is empty.”
and the statements below.
v. If the intersection of sets is empty, then they are disjoint.
vi. If the intersection of sets is not empty, then they are not disjoint.
vii. If sets are disjoint, then their intersection is empty.
viii. If sets are not disjoint, then their intersection is not empty.
11. Which of the above statements corresponds to the if-then form of the given
statement?
A. i B. ii C. iii D. iv
12. Which of the above statements is the converse?
A. i B. ii C. iii D. iv
13. Which of the above statements is the inverse?
A. i B. ii C. iii D. iv
14. Which of the above statements is the contrapositive?
A. i B. ii C. iii D. iv
15. Which statements always have the same truth value?
A. conditional and its converse C. conditional and its inverse
B. conditional and its contrapositive D. converse and contrapositive

111 (DO_Q2_GENMATH11_MODULE1_LESSON8)
 Lesson Truth Values and Conditional
8 Propositions

Battling the spread of fake news, especially in social media, is a responsibility

shouldered by everyone of us. Some statements that we see online may deceive us
and make us believe that they are true. With that, it is important that we are critical
in discerning which statements are true and which are false. In this lesson, you will
become familiar with the truth values of propositions that you learned in the previous
lesson as well as conditional propositions.

What’s In

Define the following propositions using the given propositions below.

𝑝: Perpendicular lines form a right angle.

𝑞: Mutually exclusive events have a common outcome.

𝑟: One is a divisor of any integer.
1. ~𝑝
2. 𝑞∨𝑟
3. 𝑝∧𝑟
4. 𝑟 ∧∼ 𝑞
5. ∼ 𝑞 ∧ (∼ 𝑟 ∨∼ 𝑝)

What’s New

Using the propositions below, form a new statement by completing the following.
𝑝: Fishes can swim.
𝑞: Birds can fly.

1. If 𝑝___, then 𝑞___.

2. If 𝑞___, then 𝑝___.
3. If ∼ 𝑝___, then ∼ 𝑞___.
4. If ∼ 𝑞___, then ∼ 𝑝___.

112 (DO_Q2_GENMATH11_MODULE1_LESSON8)
 What is It

The statements given in the What’s In section allowed you to recall

propositions and logical connectives. From the definition of a proposition, every
statement in the said activity must be either true or false, but not both. This is known
as the truth value of a proposition. If a proposition is true, its truth value is true,
which is denoted by T; otherwise, it is false, and is denoted by F.

Below are the given statements in What’s In and each of their corresponding truth
value.

Proposition Truth Value

𝑝: Perpendicular lines form a right angle. T
𝑞: Mutually exclusive events have a common outcome. F
𝑟: One is a divisor of any integer. T

For compound propositions, one must consider the truth values of its
component proposition in order to determine its truth table. Oftentimes, this is done
using a truth table. A truth table displays the truth values that correspond to all
the possible combinations of the truth values of the component propositions.

𝒑 ∼𝒑 The truth value of the negation of the proposition 𝑝 is

T F always opposite the truth value of 𝑝. Meaning to say, if 𝑝
is true, then ∼ 𝑝 is false and if 𝑝 is false, then ∼ 𝑝 is true.
F T
Observe how this relationship is presented in the truth
table on the left.

𝒑 𝒒 𝒑∧𝒒
Meanwhile, a conjunction is true only when both of its
T T T
component propositions are true. Otherwise, it is false. As
T F F
shown on the truth table on the left, the only instance that
F T F
makes 𝑝 ∧ 𝑞 true is when both 𝑝 and 𝑞 are true.
F F F

𝒑 𝒒 𝒑∨𝒒 Moreover, a disjunction is false only when both of its

T T T component propositions are false. Otherwise, it is true. As
T F T shown on the truth table on the left, the only instance that
F T T makes 𝑝 ∨ 𝑞 false is when both 𝑝 and 𝑞 are false.
F F F

Let us go over with the statements that you defined in the What’s In section and
construct a truth table to illustrate its truth value.
Illustration 1: ∼ 𝑝: Perpendicular lines do not form a right angle.

113 (DO_Q2_GENMATH11_MODULE1_LESSON8)
 𝒑 ∼𝒑 The truth table on the left shows all the possible truth
T F values of ∼ 𝑝. Since 𝑝 is true, then ∼ 𝑝 is false.
F T

Illustration 2: 𝑞 ∨ 𝑟: Mutually exclusive events have a common outcome or one is a

divisor of any integer.
𝒒 𝒓 𝒒∨𝒓 The truth table on the left reveals all the possible truth
T T T values of 𝑞 ∨ 𝑟. Since 𝑞 is false and 𝑟 is true, then 𝑞 ∨ 𝑟 is
T F T true.
F T T
F F F
Illustration 3: 𝑝 ∧ 𝑟: Perpendicular lines form a right angle and one is a divisor of any
integer.

𝒑 𝒓 𝒑∧𝒓 The truth table on the left gives all the possible truth
T T T values of 𝑝 ∧ 𝑟. Since 𝑝 and 𝑟 are both true, then 𝑝 ∧ 𝑟 is
T F F also true.
F T F
F F F

Illustration 4: 𝑟 ∧∼ 𝑞: One is a divisor of any integer and mutually exclusive events do

not have a common outcome.

𝒓 𝒒 ∼𝒒 𝒓 ∧∼ 𝒒 The truth table shown on the left presents all the

T T F F possible truth values of the proposition 𝑟 ∧∼ 𝑞.
T F T T Since 𝑟 is true and 𝑞 is false, then ∼ 𝑞 must be
F T F F true, which makes 𝑟 ∧∼ 𝑞 is true.
F F T F

Illustration 5: ∼ 𝑞 ∧ (∼ 𝑟 ∨∼ 𝑝): Mutually exclusive events do not have a common

outcome, and either one is not a divisor of any integer or perpendicular lines do not
form a right angle.

𝒒 𝒓 𝒑 ∼𝒓 ∼𝒑 ∼ 𝒓 ∨∼ 𝒑 ∼𝒒 ∼ 𝒒 ∧ (∼ 𝒓 ∨∼ 𝒑)
T T T F F F F F
T T F F T T F F
T F T T F T F F
T F F T T T F F
F T T F F F T F
F T F F T T T T
F F T T F T T T
F F F T T T T T

The above table shows all the possible truth values of the desired proposition. Based
on the truth values of the component propositions, ∼ 𝑞 ∧ (∼ 𝑟 ∨∼ 𝑝) is false.

114 (DO_Q2_GENMATH11_MODULE1_LESSON8)
Aside from negation, conjunction, and disjunction, another logical connective is
implication. An implication or more commonly known as a conditional
proposition, is the proposition “if 𝑝, then 𝑞.”, denoted by 𝑝 → 𝑞, where 𝑝 and 𝑞 are
propositions. The proposition 𝑝 in a conditional is called the hypothesis or the
𝒑 𝒒 𝒑→𝒒 antecedent, while the proposition 𝑞 is called the
T T T conclusion or consequent. Observe from the truth table
T F F on the left that 𝑝 → 𝑞 is false only when the hypothesis 𝑝
F T T is true but the conclusion 𝑞 is false.
F F T

As an example, let
𝑝: Oil price is rising.
𝑞: Fare hike is anticipated.

The conditional, 𝑝 → 𝑞 is the statement

𝑝 → 𝑞: If oil price is rising, then fare hike is anticipated.

A conditional statement may come in other forms called converse, inverse, and
contrapositive. The converse is the proposition “If 𝑞, then 𝑝.”, while the inverse is
the statement “If not 𝑝, then not 𝑞.”, and the contrapositive is the proposition, “If not
𝑞, then not 𝑝.

Hence, for the above example, the converse, inverse, and contrapositive of 𝑝 → 𝑞 are
as follows:
Converse (𝑞 → 𝑝): If fare hike is anticipated, then oil price is rising.
Inverse (~𝑝 → ~𝑞): If oil price is not rising, then fare hike is not anticipated.
Contrapositive (~𝑞 → ~𝑝): If fare hike is not anticipated, then oil price is not rising.

Now, let us examine the truth value of a conditional and its other forms in the truth
table below.

𝑝 𝑞 ~𝑝 ~𝑞 𝑝→𝑞 𝑞→𝑝 ~𝑝 → ~𝑞 ~𝑞 → ~𝑝
T T F F T T T T
T F F T F T T F
F T T F T F F T
F F T T T T T T

You may have observed that the conditional always have the same truth value with
its contrapositive.

115 (DO_Q2_GENMATH11_MODULE1_LESSON8)
For another illustration, let us consider the exercise given in the What’s New
section.
𝑝: Fishes can swim.
𝑞: Birds can fly.
The conditional 𝑝 → 𝑞, and its other forms are as follows:
Conditional (𝑝 → 𝑞): If fishes can swim, then birds can fly.

Converse (𝑞 → 𝑝): If birds can fly, then fishes can swim.

Inverse (~𝑝 → ~𝑞): If fishes cannot swim, then birds cannot fly.
Contrapositive (~𝑞 → ~𝑝): If birds cannot fly, then fishes cannot swim.

What’s More

A. Suppose 𝑝, 𝑞, and 𝑟 are propositions where 𝑝 is true and both 𝑞 and 𝑟 are
false, determine the truth value of the following using a truth table.
1. ~𝑝
2. 𝑞 ∧ 𝑟
3. 𝑟 ∨ 𝑝
4. ∼ 𝑟 ∧∼ 𝑝
5. 𝑞 ∨ (𝑝 ∧ 𝑟)
B. Give the converse, inverse, and contrapositive of the given conditional.
1. If two angles are adjacent, then they are supplementary.
2. If a quadrilateral is a rhombus, then it is a parallelogram.
3. If two lines are parallel, then they do not intersect.
4. If a set is empty, then it has no element.
5. If an event is certain, then its probability is 1.

What I Have Learned

Answer the following questions.

1. How is a truth table constructed?
2. What are the different forms of a conditional and how are they formed?

116 (DO_Q2_GENMATH11_MODULE1_LESSON8)
 What I Can Do

A. Construct a truth value for each proposition.

1. ~(𝑝 ∧ 𝑞)
2. (𝑝 ∨∼ 𝑟) ∧∼ 𝑞
3. 𝑝 ∨ (∼ 𝑞 ∧∼ 𝑟)
B. Write each statement as a conditional in if-then form and give its converse,
inverse, and contrapositive.
1. Two angles whose measures add up to 90° are complementary.
2. An equilateral triangle is also equiangular.
3. The graph of a polynomial function is continuous.

Assessment
Directions: Read and analyze each item carefully then write the letter that
corresponds to the correct answer.
1. If a proposition 𝑝 is true, what is the truth value of its negation?
A. false B. true C. both D. neither
2. Let 𝑝 and 𝑞 be both false propositions, what is the truth value of 𝑝 → 𝑞?
A. false B. true C. both D. neither
3. Suppose 𝑝 is a true proposition and 𝑞 is a false proposition, what is the truth
value of 𝑝 ∧ 𝑞?
A. false B. true C. both D. neither
For items 4 to 7, consider the truth table below.

𝒑 𝒒 𝒓 ∼𝒑 ∼𝒒 ∼ 𝒑 ∧∼ 𝒒 ∼𝒓 ∼ 𝒓 ∨ (∼ 𝒑 ∧∼ 𝒒)
T T T F F F F F
T T F F F F T
T F T F F F F
T F F F T F T T
F T T T F F F
F T F T F F T T
F F T T T T F
F F F T T T T T
4. What is the missing truth value in the fifth column?
A. T B. F C. any will do D. neither
5. What should be the unknown truth value in the column for
∼ 𝑝 ∧∼ 𝑞?
A. F B. T C. any will do D. neither
6. Which of the following must be the truth value for the second row in the
column for ∼ 𝑟?
A. T B. F C. any will do D. neither
7. What must be the truth value that completes the last column?
A. F B. T C. any will do D. neither

117 (DO_Q2_GENMATH11_MODULE1_LESSON8)
 8. Which of the following is the symbolic form for the inverse of the conditional
𝑝 → 𝑞?
A. ~𝑝 → 𝑞 B. 𝑞 → 𝑝 C. ~𝑝 → ~𝑞 D. ~𝑞 → ~𝑝
9. Suppose a conditional 𝑝 → 𝑞 is false, which of the following should also be
false?
A. converse B. contrapositive C. inverse D. none of these
10. What is the truth value of the statement “If an angle is right, then its measure
is at least 90°.”?
A. T B. F C. any will do D. neither

For items 11 to 14, consider the statement “The intersection of disjoint sets is empty.”
and the statements below.
i. If the intersection of sets is empty, then they are disjoint.
ii. If the intersection of sets is not empty, then they are not disjoint.
iii. If sets are disjoint, then their intersection is empty.
iv. If sets are not disjoint, then their intersection is not empty.

11. Which of the above statements corresponds to the if-then form of the given
statement?
A. i B. ii C. iii D. iv
12. Which of the above statements is the converse?
A. i B. ii C. iii D. iv
13. Which of the above statements is the inverse?
A. i B. ii C. iii D. iv
14. Which of the above statements is the contrapositive?
A. i B. ii C. iii D. iv
15. Which statements always have the same truth value?
A. conditional and its converse C. conditional and its inverse
B. conditional and its contrapositive D. converse and contrapositive

Additional Activities
Construct a truth table to show that 𝑝 ∧∼ 𝑞 always have the same truth value
as ∼ (𝑝 → 𝑞) no matter what the truth values of 𝑝 and 𝑞 are.

118 (DO_Q2_GENMATH11_MODULE1_LESSON8)
 20. B F F F
19.B F T F
18.C F F T
17.B
T T T
16.A
𝒒∧𝒓 𝒓 𝒒
B 15. 15.A
B 14. 14.A 2.
D 13. 13.A
A 12. 12.B T F
C 11. 11.A F T
What I Know/Assessment ∼𝒑 𝒑
1.

What’s More - A

What’s More - A

3.
𝒓 𝒑 𝒓∨𝒑
T T T
T F T
F T T
F F F

4.
𝒓 𝒑 ∼𝒓 ∼𝒑 ∼ 𝒓 ∧∼ 𝒑
T T F F F
T F F T F
F T T F F
F F T T T

5.
𝒒 𝒑 𝒓 (𝒑 ∧ 𝒓) 𝒒 ∨ (𝒑 ∧ 𝒓)
T T T T T
T T F F F
T F T F F
T F F F F
F T T T F
F T F F F
F F T F F
F F F F F

119 (DO_Q2_GENMATH11_MODULE1_LESSON8)
(DO_Q2_GENMATH11_MODULE1_LESSON8) 120
What I Have Learned
1. A truth value is constructed by setting up the columns pertaining to the
propositions that are involved. Each column is labelled by such propositions
while every row presents the different instances for the truth value of the
desired proposition.
2. The different forms of a conditional are the converse, inverse, and
contrapositive. The converse is the proposition “If 𝑞, then 𝑝.”, while the
inverse is the statement “If not 𝑝, then not 𝑞.”, and the contrapositive is the
proposition, “If not 𝑞, then not 𝑝.
What’s More – B
1. Converse – If two angles are supplementary, then they are adjacent.
Inverse – If two angles are not adjacent, then they are supplementary.
Contrapositive – If two angles are not supplementary, then they are not adjacent.
2. Converse – If a quadrilateral is a parallelogram, then it is a rhombus.
Inverse – If a quadrilateral is not a rhombus, then it is not a parallelogram.
Contrapositive – If a quadrilateral is not a parallelogram, then it is not a
rhombus.
3. Converse – If two lines do not intersect, then they are parallel.
Inverse – If two lines are not parallel, then they intersect.
Contrapositive – If two lines intersect, then they are not parallel.
4. Converse – If a set has no element, then it is empty.
Inverse – If a set is not empty, then it has an element.
Contrapositive – If a set has an element, then it is not empty.
5. Converse – If an event has a probability of 1, then it is certain.
Inverse – If an event is not certain, then it does not have a probability of 1.
Contrapositive – If an event does not have a probability of 1, then it is not
certain.
(DO_Q2_GENMATH11_MODULE1_LESSON8) 121
What I Can Do - A
1.
𝒑 𝒒 𝒑∧𝒒 ∼ (𝒑 ∧ 𝒒)
T T T F
T F F T
F T F T
F F F T
2.
𝒑 𝒒 𝒓 ∼𝒓 ∼𝒑 𝒑 ∨∼ 𝒓 ∼𝒒 (𝒑 ∨∼ 𝒓) ∧∼ 𝒒
T T T F F T F F
T T F T F T F F
T F T F F T T T
T F F T F T T T
F T T F T F F F
F T F T T T F F
F F T F T F T F
F F F T T T T T
3.
𝒑 𝒒 𝒓 ∼𝒒 ∼𝒓 ∼ 𝒒 ∧∼ 𝒓 𝒑 ∨ (∼ 𝒒 ∧∼ 𝒓)
T T T F F F T
T T F F T F T
T F T T F F T
T F F T T T T
F T T F F F F
F T F F T F F
F F T T F F F
F F F T T T T
 (DO_Q2_GENMATH11_MODULE1_LESSON8) 122
Additional Activities
𝒑 𝒒 ∼𝒒 𝒑 ∧∼ 𝒒 𝒑→𝒒 ~(𝒑 → 𝒒)
T T F F T F
T F T T F T
F T F F T F
F F T F T F
What I Can Do – B
1. Conditional – If two angles have measures that add up to 90°, then they are
complementary.
Converse – If two angles are complementary, then their measures add up to 90°.
Inverse – If two angles do not have measures that add up to 90°, then they are
not complementary.
Contrapositive – If two angles are not complementary, then they do not have
measures that add up to 90°.
2. Conditional – If a triangle is equilateral, then it is also equiangular.
Converse – If a triangle is equiangular, then it is also equilateral.
Inverse – If a triangle is not equilateral, then it is not also equiangular.
Contrapositive – If a triangle is not equiangular, then it is not also equilateral.
3. Conditional – If a function is a polynomial function, then its graph is continuous.
Converse – If the graph of a function is continuous, then it is a polynomial
function.
Inverse – If a function is not a polynomial function, then its graph is not
continuous.
Contrapositive – If the graph of a function is not continuous, then it is not a
polynomial function.
Crisologo, L.A., Hao, L., Miro, E.D., Ocampo, S., Palomo, E., and Tresvalles, R.
(2016). Teaching Guide for Senior High School – General Mathematics. Commission
on Higher Education. Quezon City

Isidro, J., Solano, I., and Mariano, O. (2019). General Mathematics 2nd edition. DIWA
Learning Systems Inc. Makati City

Rosen, K. H. (2012). Discrete Mathematics and Its Applications 7th edition. McGraw
Hill. New York.

123 (DO_Q2_GENMATH11_MODULE1_LESSON8)
 SENIOR HIGH SCHOOL

General Mathematics
(LEARNING AREA)
Quarter 2 Module
(QUARTER NUMBER) 1
Lesson 9:
(MODULE NUMBER)
Tautologies, Fallacies, and
Categorical Syllogisms

124 (DO_Q2_GENMATH11_MODULE1_LESSON8)
 What I Need to Know

After going through this module, you are expected to:

1. illustrate different types of tautologies and fallacies (M11GM-IIi-1);
2. determine the validity of categorical syllogisms (M11GM-IIi-2); and
3. establish the validity and falsity of real-life arguments using logical
propositions, syllogisms, and fallacies (M11GM-IIi-3).

What I Know
Directions: Read and analyze each item carefully then write the letter that corresponds
to the correct answer.
1. Which of the following statements is always false?
A. Contingency B. Conditional C. Contradiction D. Tautology
2. What are the parts of an argument?
A. Hypotheses and Conclusions C. Premises and Conclusion
B. Hypotheses and Premises D. Antecedents and Conclusion
3. What rule of inference is illustrated below.
If you submit your activities on time, then you’ll get a good grade.
If you get a good grade, then you’ll receive an award.
Therefore, if you submit your activities on time, then you’ll receive an
award.
A. Modus Ponens C. Modus Tollens
B. Disjunctive Syllogism D. Hypothetical Syllogism
4. Which of the following arguments illustrates Modus Ponens?
A. If today is Wednesday, then tomorrow is Thursday.
Today is Wednesday.
Therefore, tomorrow is Thursday.
B. If you get good grades, then you are a candidate for honors.
You are not a candidate for honors.
Therefore, you did not get good grades.
C. If you are good at Math, then you are good at Science.
If you are good at Science, then you are an awardee.
Therefore, If you are good at Math, then you are an awardee.
D. You are attending your classes regularly.
You are submitting the requirements on time.
Therefore, you are attending your classes regularly and you are submitting
the requirements on time.
5. What do you call an argument that is NOT valid?
A. Contradiction B. Fallacy C. Categorical D. Conditional
For item numbers 6 to 9, refer to the argument below.
It is not sunny this afternoon (𝑠) and it is colder than yesterday (𝑐). [1]

125 (DO_Q2_GENMATH11_MODULE1_LESSON9)
If we go swimming today (𝑤), then it is sunny this afternoon. [2]
If we do not go swimming today, then we will take a boat trip (𝑏). [3]

If we take a boat trip, then we will be home by sunset (ℎ). [4]

Therefore, we will be home by sunset.
Proof:

Statements Reasons
1. 1. ∼𝑠∧𝑐 Proposition [1]
2. 𝑤→𝑠 Proposition [2]
3. ∼𝑠
4. Modus Tollens
5. ∼𝑤→𝑏
6. 𝑏→ℎ Proposition [4]
7. ℎ

6. What rule of inference justifies the third statement?

A. Addition B. Simplification C. Modus Ponens D. Modus Tollens
7. What proposition should be placed in the fourth statement?
A. 𝑤 B. ∼ 𝑤 C. 𝑏 D. ∼ 𝑏
8. Which of the following justifies the fifth statement?
A. Proposition [3] C. Hypothetical Syllogism
B. Modus Ponens D. Addition
9. What rule of inference justifies the conclusion of the argument?
A. Constructive Dilemma C. Hypothetical Syllogism
B. Modus Ponens D. Modus Tollens
10. Which of the following categorical propositions is an A-proposition?
A. All integers are rational.
B. Some integers are not whole numbers
C. No imaginary number is real.
D. Some decimals are irrational.
For item numbers 11 and 15, consider the categorical syllogism below.
No theater actor is tall.
Some basketball players are tall.
Therefore, some basketball players are theater actors.
11. What is the standard form of the first premise?
A. A-proposition C. I-proposition
B. E-proposition D. O-proposition
12. What is the predicate of the second premise?
A. tall C. basketball player
B. theater actor D. none of these
13. Which one is considered as the middle term?
A. theater actor B. tall C. basketball player D. none of these
14. What is the major premise of the above syllogism?
A. No theater actor is tall.
B. Some basketball players are tall.

126 (DO_Q2_GENMATH11_MODULE1_LESSON9)
 C. Some basketball players are theater actors.
15. The above categorical syllogism is NOT valid. Which fallacy was committed?
A. Fallacy of Illicit Minor
B. Fallacy of Exclusive Premises
C. Existential Fallacy
D. Fallacy of Drawing a Positive Conclusion from a Negative Premise

127 (DO_Q2_GENMATH11_MODULE1_LESSON9)
 Lesson Tautologies, Fallacies, and Categorical
9 Syllogisms

Once in your life, you might have already been in a difficult situation wherein
you need to come up with a sound decision. In decision-making, it is necessary that
you base your decision on true or valid assumptions to ensure that you arrive at the
correct and reasonable one. This lesson will help you gain a deeper sense of reasoning
that you can apply in testing and establishing the validity or falsity of your
arguments.

What’s In

Determine the truth value of the given compound proposition based on the indicated
truth values of its component propositions.

1. 𝑝 is true, 𝑞 is false; 𝑝 → 𝑞
2. 𝑝 is false, 𝑞 is false; 𝑝 ∨ 𝑞
3. 𝑝 is true, 𝑞 is true; 𝑝 ∧ 𝑞
4. 𝑝 is false, 𝑞 is false, 𝑟 is true; (𝑝 → 𝑞) ∧ 𝑟
5. 𝑝 is true, 𝑞 is false, 𝑟 is false; 𝑝 ∨ (𝑞 → 𝑟)

What’s New

Construct the truth table for the following propositions and answer the questions
that follow.
1. 𝑝 ∨∼ 𝑝
2. 𝑝 ∧∼ 𝑝

Process Questions:
a. How would you describe the truth values of the first proposition? second?
b. Is there a possibility for the first proposition to become false? If yes, when?
c. Is there a possibility for the second proposition to become true? If yes,
when?

128 (DO_Q2_GENMATH11_MODULE1_LESSON9)
 What is It

The statements given in the What’s New section allowed you to examine the truth
values of a proposition. Based on the truth table below, you may observe that the
first proposition, 𝑝 ∨∼ 𝑝, is always true, no matter what the truth value of 𝑝 is.

𝒑 ∼𝒑 𝒑 ∨∼ 𝒑 Here, there is no instance that the proposition will be

false. Such proposition is a tautology. A tautology is a
T F T compound proposition that is true for all possible truth
F T T values of its component propositions.

Further, the second proposition, 𝑝 ∧∼ 𝑝, is always false as shown in the truth

table below.

𝒑 ∼𝒑 𝒑 ∧∼ 𝒑 Here, it is impossible for the proposition to be true

regardless of whether 𝑝 is true or false. Such is an
T F F example of a contradiction. A contradiction is a
F T F compound proposition that is false for all possible truth
values of its component propositions.

Tautologies and contradictions are very essential in establishing the validity

of an argument. An argument is a compound proposition of the form
(𝑝1 ∧ 𝑝2 ∧ 𝑝3 ∧ … ∧ 𝑝𝑛 ) → 𝑞. The hypothesis of an entire argument, (𝑝1 ∧ 𝑝2 ∧ 𝑝3 ∧ … ∧
𝑝𝑛 ), are its premises, while 𝑞 is the conclusion.
There are two ways in which we can write an argument. These are
propositional form and standard form which are shown in the table below.

Propositional Form Standard Form

(𝑝1 ∧ 𝑝2 ∧ 𝑝3 ∧ … ∧ 𝑝𝑛 ) → 𝑞. 𝑝1
𝑝2
𝑝3
⋮
𝑝𝑛
∴𝑞

An argument is valid if (𝑝1 ∧ 𝑝2 ∧ 𝑝3 ∧ … ∧ 𝑝𝑛 ) → 𝑞 is a tautology. Otherwise, the

argument is invalid. A valid argument means that the conclusion logically follows
from the premises.
To establish the validity of an argument, we shall be guided the so-called rules
of inferences shown in the left part of the table below. See also how these rules are
illustrated in the right part of the table.

129 (DO_Q2_GENMATH11_MODULE1_LESSON9)
 Let 𝑝, 𝑞, 𝑟, and 𝑠 be propositions, then the following arguments are valid.
Rules of Inference Illustration
1. Modus Ponens If it is stormy, then classes are
𝑝→𝑞 suspended.
𝑝 It is stormy.
∴𝑞 Therefore, classes are suspended.
2. Modus Tollens If you are at least 18 years old, then you
𝑝→𝑞 are eligible to vote.
~𝑞 You are not eligible to vote.
∴ ~𝑝 Therefore, you are not at least 18 years
old.
3. Hypothetical Syllogism If you submit your activities on time,
𝑝→𝑞 then you’ll get a good grade.
𝑞→𝑟 If you get a good grade, then you’ll
∴𝑝→𝑟 receive an award.
Therefore, if you submit your activities
on time, then you’ll receive an award.
4. Disjunctive Syllogism You brought an alcohol, or you
𝑝∨𝑞 practiced physical distancing.
~𝑝 You did not bring an alcohol.
∴𝑞 Therefore, you practiced physical
distancing.
5. Constructive Dilemma If you are staying at home, then you can
(𝑝 → 𝑞) ∧ (𝑟 → 𝑠) do more house chores and if you are
𝑝∨𝑟 going out often, then you increase your
∴𝑞∨𝑠 chance of catching the virus.
Either you are staying at home, or you
are going out often.
Therefore, you can do more house
chores, or you increase your chance of
catching the virus.
6. Simplification You are wearing a mask and you have a
𝑝∧𝑞 face shield.
∴𝑞 Therefore, you are wearing a mask.
or
𝑝∧𝑞
∴𝑝
7. Conjunction You are watching Valenzuela Live.
𝑝 You are accomplishing your modules.
𝑞 Therefore, you are watching Valenzuela
∴𝑝∧𝑞 Live and you are accomplishing your
modules.
8. Addition You are listening to Spotify.
𝑝 Therefore, you are listening to Spotify or
∴𝑝∨𝑞 you are browsing in Twitter.

Rules of inferences may also be applied in coming up with a conclusion that

makes a valid argument. To further illustrate how they are used to infer a logical
conclusion from a sequence of propositions in real-life, consider the following:
[1] If you do not comply with the requirements, then you will not pass this subject.
[2] If you do not pass this subject, then your parents will get mad.

130 (DO_Q2_GENMATH11_MODULE1_LESSON9)
[3] If your parents get mad, then they will not give you a reward.
[4] You were given a reward.
From the above propositions, we may let the following propositions hold:
𝑐: You comply with the requirements.

𝑠: You will pass this subject.

𝑝: Your parents get mad.
𝑟: Your parents will give you a reward.

As such, a valid argument and its proof may be constructed through a two-
column proof as shown below.

Statement Reason
1. ∼ 𝑐 → ~𝑠 1. Proposition [1]
2. ∼𝑠→𝑝 2. Proposition [2]
3. ∼𝑐→𝑝 3. Hypothetical Syllogism
4. 𝑝 → ~𝑟 4. Proposition [3]
5. ∼ 𝑐 → ~𝑟 5. Hypothetical Syllogism
6. 𝑟 6. Proposition [4]
7. 𝑐 7. Modus Tollens

Hence, it can be said that in the above sequence of propositions, a logical

conclusion that can be drawn is that "You comply with the requirements.".
Now, try to analyze this argument.
If you have flu-like symptoms, then you need to consult a doctor.
You consulted a doctor.
Therefore, you have flu-like symptoms.

Is it a valid argument?

By looking closely at the structure of the above argument, you can easily tell
that it is not supported by any of the rules of inferences presented above. With that,
it can be said that the argument is NOT valid. This is an example of a fallacy.
An argument (𝑝1 ∧ 𝑝2 ∧ 𝑝3 ∧ … ∧ 𝑝𝑛 ) → 𝑞 which is not valid is called a fallacy. It
is an argument whose conclusion is not supported by its premises. A fallacy can also
be thought of as an error in reasoning. Below are common fallacies with their
corresponding illustrations.

131 (DO_Q2_GENMATH11_MODULE1_LESSON9)
Let 𝑝 and 𝑞 be propositions, then the following arguments are NOT valid.
Fallacy Illustration
1. Fallacy of Affirming the If you cheat, then you will pass the test.
Consequent You passed the test.
𝑝→𝑞 Therefore, you cheated.
𝑞
∴𝑝
2. Fallacy of Denying the If you go abroad, then you will earn a lot
Antecedent of money.
𝑝→𝑞 You did not go abroad.
~𝑝 Therefore, you will not earn a lot of
∴ ~𝑞 money.
3. Fallacy of Affirming the Disjunct Either you are a frontliner or you have a
𝑝∨𝑞 quarantine pass.
𝑝 You are a frontliner.
∴ ~𝑞 Therefore, you do not have a quarantine
pass.
4. Fallacy of Denying the Conjunct Alvin doesn’t both drink and smoke.
~(𝑝 ∧ 𝑞) Alvin doesn’t drink.
~𝑝 Therefore, Alvin smokes.
∴𝑞
5. Fallacy of Converting the If two angles form a linear pair, then
Conditional they are supplementary.
𝑝→𝑞 Therefore, if two angles are
∴𝑞→𝑝 supplementary, then they form a linear
pair.
6. Fallacy of Improper Transposition If you are a STEM student, then you
𝑝→𝑞 are good at Math.
∴ ~𝑝 → ~𝑞 Therefore, if you are not a STEM
student, then you are not good at Math.

At this point of our study of mathematical logic, we have only looked at

hypothetical propositions. Now we are to proceed to what we call categorical
propositions. Examine the propositions below.

Proposition Venn Diagram

1. All triangles are polygons. Let 𝑃 be the set of all polygons and 𝑇 be
the set of all triangles.
𝑷

The elements of 𝑇 are all contained in 𝑃,

which is exactly the sense of the given
proposition.

132 (DO_Q2_GENMATH11_MODULE1_LESSON9)
 2. No vertical angles share a Let 𝑉 be the set of all pairs of vertical
common side. angles and 𝐶 be the set of all angle pairs
sharing a common side.
𝑽

There is no element of 𝑉 that is an

element of 𝐶.
3. Some cylinders are right. Let 𝐶 be the set of all cylinders and 𝑅 be
the set of all right solids.

𝑹
𝒙

There is at least one element 𝑥 that is

contained in both sets.
4. Some mammals do not have Let 𝑀 be the set of all mammals and 𝑊
wings. be the set of all animals with wings.

𝑾
𝒙

There is at least one element in 𝑀 which

does not belong to 𝑊.

How do the above propositions differ from the ones that you had in the past
lessons?
All the four propositions presented in the preceding table are examples of a
categorical propositions. A categorical proposition is a proposition that expresses
the relationship between two categories or sets. The use of Venn Diagram for each of
these categorical propositions makes it easier to visualize how the involved sets are
related to one another.

Further, another characteristic of a categorical proposition is that it has two

main elements, quantity and quality. The quantity of a categorical proposition is
either universal or particular, while its quality can either be affirmative or negative.
Having this characteristic enlightens you of the standard form of a categorical

133 (DO_Q2_GENMATH11_MODULE1_LESSON9)
proposition. The table below shows the four standard forms of a categorical
proposition.

Quantity Quality Categorical Proposition

Universal Affirmative A-proposition

Universal Negative E-proposition

Particular Affirmative I-proposition

Particular Negative O-proposition

Referring to the above examples, the first one is an A-proposition, the second
one is an E-proposition, the third one is an I-proposition, and the last one is an O-
proposition. Below is another table that dissects and justifies the standard form of
the above propositions.

Categorical Quantifier Subject Term Copula Predicate Term

Proposition

A-Proposition All triangles are Polygons

E-Proposition No vertical angles share a common side

I-Proposition Some cylinders are Right

O-Proposition Some mammals do not have wings

It is also possible to create an argument using categorical propositions just

like this one.
All integers are rational.
All even numbers are integers.
Therefore, all even numbers are rational.

The argument shown here is a so-called categorical syllogism. A categorical

syllogism is a deductive argument consisting of three categorical propositions that
contain exactly three terms, each of which occurs in exactly two of the constituent
propositions.
The parts of a categorical syllogism are illustrated next.

134 (DO_Q2_GENMATH11_MODULE1_LESSON9)
 According to Hurley (2008), a categorical syllogism is in its standard form if it
satisfies the following conditions:
1. All three categorical propositions are in standard form.
2. The two occurrences of each term is identical.
3. Each term is used in the same sense throughout the argument.
4. The major premise is listed first, followed by the minor premise, and the
conclusion last.

Let’s check if the above categorical syllogism is in standard form. First, all the
categorical propositions involved in the given syllogism are A-propositions, which
means that they are all in standard form. Hence, the first condition is satisfied.
Next, the occurrences of the terms, ‘integers’, ‘rational’, and ‘even numbers’ are
clearly identical. Further, these terms have the same sense throughout the
argument. Thus, the second and third conditions are met.
Last, it is also easy to see that the first appearing proposition is the major
premise, followed by the minor premise, and finally the conclusion; this fulfills the
last condition. Therefore, the given categorical syllogism is in standard form.

Now, can you determine if the categorical syllogisms below is in standard form?
Some capitals bear interest.
All capitals are cities.
Therefore, some cities bear interest.

Some quadrilaterals are equilateral.

No trapezoid is equilateral.
Therefore, some quadrilaterals are trapezoids.

Observe that these syllogisms are NOT in standard form. Can you tell which of
the four conditions was violated?

135 (DO_Q2_GENMATH11_MODULE1_LESSON9)
 Similar to the rules of inferences for hypothetical arguments, there are also rules
to be applied in establishing the validity of a categorical syllogism. Likewise, once a
rule is violated, a fallacy is committed. These rules, together with their corresponding
fallacy and illustrations, are enumerated in the table below.

Rule Fallacy Illustration of the Committed

Fallacy
Rule #1: A standard form Fallacy of the All presidents are rulers.
categorical syllogism must four terms Some rulers are straight objects used
contain exactly three in measurement.
terms, each of which is Therefore, some straight objects used
used in the same sense in measurement are presidents.
throughout the argument.
(The middle term, ruler, meant
Note: This rule is one of the differently in the major and minor
conditions that guarantees premises.)
that the categorical
syllogism is in standard
form. This is a necessary
condition for establishing
the validity of a categorical
syllogism.
Rule #2: In valid standard Fallacy of the All biologists are scientists.
form categorical undistributed All lawyers are scientists.
syllogism, the middle term middle term Therefore, all lawyers are biologists.
is distributed.
(Both major and minor premises are A-
Note: A proposition propositions, so they both distribute
distributes a term if it their subject. However, their common
refers to all members of the predicate, scientists, is NOT
class designated by the distributed.)
term. Remember that A-
and E-propositions
distribute the subject term,
while I- and O-propositions
distribute the predicate
term.
Rule #3: In valid standard Fallacy of All teachers are wise.
form categorical illicit All teachers are caring people.
syllogism, if either term is major/minor Therefore, all caring people are wise.
distributed in the
conclusion, then it must (The conclusion is an A-proposition
be distributed in the which distributes the subject ‘caring
premises. people’. Yet, this term is not distributed
in the minor premise because it is the
Note: The conclusion of a predicate of this A-proposition. So, the
valid argument cannot go fallacy of illicit minor is committed.)
beyond or assert any more
than what is implicitly
contained in the premises.
Rule #4: No standard form Fallacy of No mathematician is a politician.
categorical syllogisms exclusive Some politicians are not lawyers.
premises

136 (DO_Q2_GENMATH11_MODULE1_LESSON9)
having two negative Therefore, some lawyers are
premises is valid. mathematicians.

Note: No valid assertion (The major premise is an E-proposition

can be drawn from two while the minor premise is an O-
negative premises. proposition. Both premises are
negative; hence, no valid conclusion
must be drawn.)
Rule #5: If either premise Fallacy of No school athletes are academic
of a valid standard form drawing an awardees.
categorical syllogism is affirmative Some community scholars are school
negative, then the conclusion athletes.
conclusion must be from a Therefore, some community scholars
negative. negative are academic awardees.
premise
Note: Affirmative (The major premise, which is an E-
propositions assert class proposition, is negative. Yet, the
inclusion while negative conclusion, which is an I-proposition, is
propositions deny class affirmative. This makes the categorical
inclusion. It is impossible syllogism invalid.)
to come up with an
affirmative conclusion if
one of the premises is
negative.
Rule #6: No valid standard Existential All students are honest.
form categorical syllogism Fallacy No politicians are honest.
with a particular Therefore, some politicians are
conclusion can have two students.
universal premises.
(The major premise, which is an A-
proposition, and the minor premise,
which is an E-proposition, are both
universal. But the conclusion, which is
an I-proposition, is particular.)

What’s More
A. Use truth tables to establish which of the statement forms are tautologies
and which are contradictions.
1. (𝑝 ∧ 𝑞) → 𝑝
2. 𝑝∧[(𝑞∨∼𝑝)∧∼𝑞]
3. (𝒑∧∼𝒒)∧(𝒑∧𝒒)
4. 𝒑→(𝒑∨𝒒)
5. (~𝑝 ∨ 𝑞) ∨ (𝑝 ∧∼ 𝑞)

137 (DO_Q2_GENMATH11_MODULE1_LESSON9)
 B. Analyze each argument and tell if it is valid or not. If it is valid, identify the
rule of inference used to justify the validity of the argument; otherwise state
the fallacy illustrated by the argument.
1. If you finish the task in advance, then you’ll get a reward.
If you get a reward, then you’ll feel satisfied.
Therefore, if you finish the task in advance, then you’ll feel satisfied.
2. If you are a HUMSS student, then you are good at English.
Therefore, if you are not a HUMSS student, then you are not good at English.
3. If you eat a lot of vegetables, then you will be healthy.
You are healthy.
Therefore, you eat a lot of vegetables.
4. If you are at least 60 years old, then you are a senior citizen.
You are not a senior citizen.
Therefore, you are not at least 60 years old.
5. You attend the classes regularly, or you fail this school year.
You did not fail this school year.
Therefore, you attended the classes regularly.
C. Categorize the given proposition as an A-proposition, E-proposition, I-
proposition, or O-proposition.
1. Some students are not punctual.
2. Some mammals can fly.
3. No taxpayer is minor.
4. All public school teachers are board passers.
5. Some adjacent angles are complementary.

What I Have Learned

Answer the following questions.

1. How does a tautology differ from a contradiction?
2. What are the Rules of Inference for?
3. How do we establish the validity of an argument?
4. What is a fallacy?
5. How does a categorical proposition differ from other propositions?
6. What are the standard forms of a categorical proposition?
7. What is a categorical syllogism?
8. How do we determine the validity of a categorical syllogism?

138 (DO_Q2_GENMATH11_MODULE1_LESSON9)
 What I Can Do

A. Deduce a logical conclusion from the propositions below. Provide a two-

column proof to justify your reasoning.
It is not raining this morning and it is hotter than yesterday.
If we stay at home, then it must be raining.
If we do not stay at home, then we will go out for shopping.
If we go out for shopping, then we will stay at the mall until evening.

B. Tell if the given categorical syllogism is in standard form or not. If not, state
which condition was not satisfied.
1. Some famous people are not YouTube sensations.
All YouTube sensations are talented.
Therefore, some famous people are talented.
2. No athlete is weak.
Some athletes are basketball players.
Therefore, some basketball players are not weak.
3. All teachers are honest.
Some honest people are successful.
Therefore, some successful people are teachers.
4. All heroes are strong.
Some typhoons are strong.
Therefore, some typhoons are heroes.
5. All biologists are scientists.
No scientists are lawyers.
Therefore, no lawyers are biologists.

C. Determine if the given categorical syllogism is valid or not. If not, state the
fallacy that is committed.
1. All teachers are honest.
Some honest people are successful.
Therefore, some successful people are teachers.
2. No athlete is weak.
Some athletes are basketball players.
Therefore, some basketball players are not weak.
3. All heroes are strong.
Some typhoons are strong.
Therefore, some typhoons are heroes.
4. All YouTube sensations are talented.
All YouTube sensations are famous people.
Therefore, all famous people are talented.
5. Some men are rational.
All men are mortal.
Therefore, some mortal are rational.

139 (DO_Q2_GENMATH11_MODULE1_LESSON9)
 Assessment
Directions: Read and analyze each item carefully then write the letter that
corresponds to the correct answer.
1. Which of the following statements is always false?
A. Contingency B. Conditional C. Contradiction D. Tautology
2. What are the parts of an argument?
A. Hypotheses and Conclusions C. Premises and Conclusion
B. Hypotheses and Premises D. Antecedents and Conclusion
3. What rule of inference is illustrated below.
If you submit your activities on time, then you’ll get a good grade.
If you get a good grade, then you’ll receive an award.
Therefore, if you submit your activities on time, then you’ll receive an
award.
A. Modus Ponens C. Modus Tollens
B. Disjunctive Syllogism D. Hypothetical Syllogism
4. Which of the following arguments illustrates Modus Ponens?
A. If today is Wednesday, then tomorrow is Thursday.
Today is Wednesday.
Therefore, tomorrow is Thursday.
B. If you get good grades, then you are a candidate for honors.
You are not a candidate for honors.
Therefore, you did not get good grades.
C. If you are good at Math, then you are good at Science.
If you are good at Science, then you are an awardee.
Therefore, If you are good at Math, then you are an awardee.
D. You are attending your classes regularly.
You are submitting the requirements on time.
Therefore, you are attending your classes regularly and you are submitting
the requirements on time.
5. What do you call an argument that is NOT valid?
A. Contradiction B. Fallacy C. Categorical D. Conditional
For item numbers 6 to 9, refer to the argument below.
It is not sunny this afternoon (𝑠) and it is colder than yesterday (𝑐). [1]
If we go swimming today (𝑤), then it is sunny this afternoon. [2]

If we do not go swimming today, then we will take a boat trip (𝑏). [3]
If we take a boat trip, then we will be home by sunset (ℎ). [4]
Therefore, we will be home by sunset.

140 (DO_Q2_GENMATH11_MODULE1_LESSON9)
Proof:

Statements Reasons
1. 1. ∼𝑠∧𝑐 Proposition [1]
2. 𝑤→𝑠 Proposition [2]
3. ∼𝑠
4. Modus Tollens
5. ∼𝑤→𝑏
8. 𝑏→ℎ Proposition [4]
9. ℎ

6. What rule of inference justifies the third statement?

A. Addition B. Simplification C. Modus Ponens D. Modus Tollens
7. What proposition should be placed in the fourth statement?
A. 𝑤 B. ∼ 𝑤 C. 𝑏 D. ∼ 𝑏
8. Which of the following justifies the fifth statement?
A. Proposition [3] C. Hypothetical Syllogism
B. Modus Ponens D. Addition
9. What rule of inference justifies the conclusion of the argument?
A. Constructive Dilemma C. Hypothetical Syllogism
B. Modus Ponens D. Modus Tollens
10. Which of the following categorical propositions is an A-proposition?
A. All integers are rational.
B. Some integers are not whole numbers
C. No imaginary number is real.
D. Some decimals are irrational.
For item numbers 11 and 15, consider the categorical syllogism below.
No theater actor is tall.
Some basketball players are tall.
Therefore, some basketball players are theater actors.

11. What is the standard form of the first premise?

A. A-proposition C. I-proposition
B. E-proposition D. O-proposition
12. What is the predicate of the second premise?
A. tall C. basketball player
B. theater actor D. none of these
13. Which one is considered as the middle term?
A. theater actor B. tall C. basketball player D. none of these
14. What is the major premise of the above syllogism?
A. No theater actor is tall.
B. Some basketball players are tall.
C. Some basketball players are theater actors.
D. None of these
15. The above categorical syllogism is NOT valid. Which fallacy was committed?
A. Fallacy of Illicit Minor
B. Fallacy of Exclusive Premises
C. Existential Fallacy
D. Fallacy of Drawing a Positive Conclusion from a Negative Premise

141 (DO_Q2_GENMATH11_MODULE1_LESSON9)
 Additional Activities
The logician Raymond Smullyan describes an island containing two types of
people: knights who always tell the truth and knaves who always lie. You visit the
island and are approached by two natives who speak to you as follows:
A says: B is a knight.
B says: A and I are of opposite type.
What are A and B?

142 (DO_Q2_GENMATH11_MODULE1_LESSON9)
Crisologo, L.A., Hao, L., Miro, E.D., Ocampo, S., Palomo, E., and Tresvalles, R.
(2016). Teaching Guide for Senior High School – General Mathematics. Commission
on Higher Education. Quezon City

Isidro, J., Solano, I., and Mariano, O. (2019). General Mathematics 2nd edition. DIWA
Learning Systems Inc. Makati City

Rosen, K. H. (2012). Discrete Mathematics and Its Applications 7th edition. McGraw
Hill. New York.

143 (DO_Q2_GENMATH11_MODULE1_LESSON9)
For inquiries or feedback, please write or call:
Department of Education – SDO Valenzuela

Office Address: Pio Valenzuela Street, Marulas, Valenzuela City

Telefax: (02) 8292-4340

Email Address: [email protected]

144 (DO_Q2_GENMATH11_MODULE1_LESSON9)