NOTE: The topic is considered to be less understood because most Math teachers do not have much time to deepen

the content.

ADAPTIVE TEACHING GUIDE in General Mathematics

Most Essential Topic # 2 : _Simple and General Annuity_

Lesson # 3 : __Ordinary and Deferred Annuity__

Prerequisite Content-knowledge:
● _____Simple and Compound Interest______

● _____Simple and General Annuity______

Prerequisite Skill:
● __Changing percent to decimal_

● __Simplifying rational expressions__

● __Solving problems involving simple and compound interest___

● __Solving problems involving simple and compound annuities___

Prerequisites Assessment:

The students shall solve the given problems and identify whether it is simple or compound interest.

Given Determine the type of Interest Solution

Tony borrowed ₱100 000 from a bank to finance his Simple I = Prt
new business venture. How much interest will Tony pay I = (100 000)(0.04)(2)
 if the bank charges him a 4% simple interest rate for the I = 8 000
loan payable in two years? Compound
Jeff borrowed ₱20 000 at 8% compounded quarterly for Simple
a year. Determine the amount Jeff has to pay at the end
of the loan term. Compound

Chris owes Carol ₱20 000. He promised to pay the said Simple I = Prt
amount in 6 months at 5% simple interest. How much is I = (20 000)(0.05)(0.5)
the interest? Compound I = 500

Pre-lesson Remediation Activity:

1. For Participants with Insufficient Level of Prerequisite Content-knowledge and/or Skill(s):
● They will be provided additional reading materials and practice exercises in finding the present value of a principal amount of using either simple or compound
interest.

2. Farticipants with a Fairly Sufficient Level on Prerequisite Content-knowledge and/or Skill(s):

● They will be asked to share their understanding of how the present value of principal amount are computed.

Introduction:
1. The students are expected to learn the lesson for four (4) hours, two sessions of synchronous meetings within the week and to sessions of asynchronous classes. They may
contact the teacher through email: [email protected] or phone number 09XX-XXX-XXXX for concerns and clarifications.
2. At the end of the lesson, the learners will be able to:
a) Define the ordinary and deferred annuity;
b) Distinguish the ordinary and deferred annuity;
c) Calculate the period of deferral of a deferred annuity;
d) Solve the present value of a deferred annuity.
3. The students are going to demonstrate understanding of the key concepts of ordinary and deferred annuity of real-life situations with regards to the said annuities.

4. Share the overview of the lesson. It is important to give students an idea about what the lesson is all about. In this topic, the lesson shall be started by conducting a review of
simple and general annuity. Define and distinguish ordinary and deferred annuity and introduce the formula of present value of a deferred annuity. Calculate the period of
deferral and present value of a deferred value.

Introduction spiel:
(Essence and Importance of Learning this topic)

Participant’s Experiential Learning: (Note: Use the Flexible Learning Activity Identified for the topic/lesson relative to the General Enabling Teaching Strategy)

Chunk 1: Ordinary Annuity and Deferred Annuity

A. Formative Question
1. What is an ordinary and deferred annuity?
2. How does a deferred annuity compare with an ordinary annuity?
3. How can you find the present value and period of deferral of a deferred annuity?

B. Discussion

Direct the participants to read the text from Adiga et al (2020) and answer the follow-up questions.

Activity 1: Survey Say!

a. The students will be asked questions about who among them have tried to purchase an item (e.g motor, laptop, cellphon, etc.).
b. Ask them about what is/are the mode of payment/s with regards to the purchased item and ask them how much do they pay per month.
c. Use the examples given by the students to derive the definition of ordinary annuity.
d. The students will be asked about on how about if the payment is on a later date such as quarterly, semi-annually etc.

Activity 2: Stop the Defer-rence!

1. The students will be given an activity and make a comparison between ordinary and deferred annuities using the same problem with two different payment schemes.
 Suppose you want to buy a laptop computer with two payment schemes:
A. You will pay ₱1 300 monthly for one year starting at the end of the month with 6% interest compounded monthly.
B. You will pay ₱1 300 monthly for one year starting at the end of the 3 rd month with 6% interest compounded monthly.
2. Ask the students to compare options A and B and describe any similarities and differences that they can observe between the two.
3. Afterwards, ask the students to answer the guide questions provided below:
 What type of annuity is option A? How about option B?
 How can you find the present value of the annuity in option A?

i. Lesson Proper

Definition
 Deferred Annuity - an annuity in which the first payment interval is delayed
or deferred for a period of time

In a deferred annuity, the time interval to the beginning of the first payment
interval is called the period of deferral.

 Ordinary Annuity - an annuity in which the cash flows, or payments, occur at the end of the period.

Identify the example below whether it is ordinary annuity or general annuity.

Example: A loan with an interest rate of 7% and a quarterly payment of ₱5 000 for three
years starting at the end of one year.

Expected Response: It is an example of a deferred annuity since the phrase starting at the end of one year indicates that the payment started on a later date. At the end
of one year will be at time 4 if one quarter is considered as one period. Hence, the period of deferral is from time 0 to time 3, which is equivalent to three quarters.

 Present Value of a Deferred Annuity (PVdef) – the sum of the present value of the payments given by the following formula:
Example:
To find the present value of a deferred annuity using the same problem in the previous example,
 Example 2: Find the present value of a deferred annuity of ₱600 every three months for six years that is deferred for four years if money is worth 8%
compounded quarterly.

Solution:
1. Determine the number of deferred payments d. To do so, multiply the number of deferred years by m. That is,
d=4∙4
= 16
Example 3.

C. Provide practice set in identifying ordinary and deferred annuity.

Practice set will be in the printed material.

D. Evaluation

i. Determine the period of deferral in the following problems.

 1. Monthly payments of ₱500 for 10 months that will start three months from now

2. Monthly payments of ₱850 for four years that will start five months from now

3. Annual payments of ₱1 000 for six years that will start three years from now

Answer Keys: 1. 2 months

2. 4 months
3. 2 years

ii. Analyze and solve the following problems.

1. Find the present value of a deferred annuity with semiannual payments of ₱40 000, if the first payment is made in six years and the last is due at
the end of 11 years and 9 months, and money is worth 10% compounded semiannually.
2. In a series of monthly payments of ₱8 100 each, the first payment is due at the end of four years and the last at the end of 9 years and 9 months. If
money is worth 7% compounded monthly, find the present value of the deferred annuity.

Answer Key: 1. ₱15 699.57

2. ₱2 378.97

Synthesis

To integrate values and build connection to the real world, ask the following questions:
1. What difficulties did you encounter while solving problems involving deferred annuity? How did you overcome them?
2. Give an example of a real-world situation that illustrates deferred annuity.

RUA of a Student’s Learning:

 The student’s task is to create a table for payments on a specific loan. Their loan will start at ₱50 000 to ₱100 000 with an interval of ₱10 000. They should include the
interest you want to get and the compounding period in your report. They should also indicate the series of equal payments for 6 months, 12 months, 18 months, 24 months, 36
months, and 48 months. Their table should be similar to but not limited to the table below. They are given one week to complete this task.
Post-lesson Remediation Activity:

The student will be given a worksheet to answer to test if they already master the topic.

Prepared by: Group 4