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Module 6 GE4

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Module 6 GE4

Uploaded by

John Reg Brillantes
Copyright
© © All Rights Reserved
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Republic of the Philippines

BACOLOD CITY COLLEGE


Taculing Road, Bacolod City, 6100, Email:[email protected]
Taculing Campus, (034)707-7469, Sum-ag Campus,(034) 704-5843,
Fortune Towne Campus,(034) 704-5844
Tel #: (034) 707-7469

Teacher Education Department


First Semester /S.Y. 2020-2021

(Fourth Module)
Week 12 & 13

Course Code: GE4 Instructor: Glenda C. Steffan, LPT, MAEd


Course Title: Mathematics in the Modern World Class: BEED 1A & BEED 1B
Course Description:
This course aims to discuss the nature of mathematics leading to appreciation of its practical, intellectual, social, and aesthetic dimensions. It
includes the study of the nature of mathematics and how the perception of this leads to different tools for understanding and dealing with
various aspects of present day living such as managing personal finances, making social choices, appreciating geometric designs,
understanding codes used in data transmissions and security, and dividing limited resources fairly.

Overview
This module contains a thorough discussion of simple and compound interest, solve problems om simple and compound interest and
differentiate credit cards from consumer loans, stocks, bonds and mutual funds from the home ownership.
Module 6
The Mathematics of Finance (Part 1)
Interest is the amount paid for the use of money. It is also paid for the money borrowed from a bank. The money deposited or
borrowed is called the principal, the money paid for its use is called interest, and how much is to be paid per Php100 is called the rate of
interest including the time involved usually given in years.
The important part of the word "Interest" is Inter- meaning between (we see inter- in words like interior and interval), because the interest
happens between the start and end of the loan.

Objectives: At the end of this module, the students are expected to:
1. Distinguish simple interest from compound interest. (K)
2. Solve problems on simple and compound interest. (S)
3. Differentiate credit cards from consumer loans, stocks, bonds and mutual funds from home ownership. (C)

Topic 1: SIMPLE AND COMPOUND INTEREST

A. Simple Interest
It is the interest that does not become part of the principal.
I = Prt or A = P(1 + rt)
where: P = Principal Amount
I = Interest Amount
r = Rate of Interest per year in decimal; r = R/100
t = Time Period involved in months or years
A = future value
From the base formula, A = P(1 + rt) derived from A = P + I and I = Prt so A = P + I = P + Prt = P(1 + rt)

Note that rate r and time t should be in the same time units such as months or years. Time conversions that are based on day count of 365
days/year have 30.4167 days/month and 91.2501 days/quarter. 360 days/year have 30 days/month and 90 days/quarter.
Example #1:
A 2-year loan of Php500,000 is made with 4% simple interest. Find the interest earned.
Given:
t = 2 years
P = Php500,000
r = 4% = 4/100 = 0.04
Required: I

Solution:
I = Prt
I = (500000)(0.04)(2)
I = 40,000

Example #2:
A business takes out a simple interest loan of Php10,000 at a rate of 7.5%. What is the total amount the business will repay if the loan is
for 8 years?

Given:
Php10,000
r = 7.5% = 7.5/100 = 0.075
t = 8 years
Required: I

Solution:
A = P(1 + rt)
A = 10000[1 + (0.075)(8)]
A = 10000(1 + 0.6)
A = 10000(1.6)
I = 16,000

B. Compound Interest
It is the interest that the sum becomes the new principal amount.
A = P (1 + r/n) (nt)

where: A = the future value of the investment/loan, including interest


P = the principal investment amount (the initial deposit or loan amount)
r = the annual interest rate (decimal)
n = the number of times that interest is compounded per year
t = the number of years the money is invested or borrowed for

Example #3:

If an amount of Php250,000 is deposited into a savings account at an annual interest rate of 5% compounded monthly, what is the value
of the investment after 10 years.

Given: compounded monthly


P = 250,000
r = 5/100 = 0.05
t = 10 years
n = 12

Required: A

Solution:
A = P (1 + r/n) (nt)
A = 250,000 (1 + 0.05/12) (12)(10)

A = 250,000 (1 + 0.05/12) 120

A = 250,000 (1 + 0.004166666) 120

A = 250,000 (1.004166666) 120

A = 250,000 (1.647009498)
A = 411,752.3744
The investment balance after 10 years
A = 411,752.37

Activity 1: Solve the following problems.


I. Find the missing terms.
PRINCIPAL RATE TIME (years) INTEREST
1. Php5,250 12% 3.5
2. Php65,500 1¾% 2
3. Php8,500 13% 3.5 Php4,420
4. Php15,000 12% Php9,000
5. Php50,000 3 Php13,500
6. Php105,000 1.5 Php17,325
7. 8½% 5 Php42,500
8. Php 7% 4 Php24,000
9. Php5,000,000 8¾% 5
10. Php10,000,000 12½% 3

II. Solve the following problems.


1. Mr. Cruz borrowed Php110,000 at 5% annual simple interest rate to pay as down payment for a house and lot. If he was able to pay after 6
months, how much in all did he paid?

2. Mr. Reyes placed Php120,000, in a savings bank at 4% and Php130,000 in a time deposit at 10.5%. How much simple interest do these
investments earn every 3 months?
3. Mrs. Solidad borrowed Php25,000 to start a market stall, at 14% simple interest. If she paid Php10,000 every six months, (a) how many
times did she pay? (b) how much was her last payment? (c) how much in all did she pay?

Instruction: Please follow the given format below in presenting your solutions.
Module 6 – GE4
Activity 1

Name: _________________ Course/Sec._______

I. (table)

II.

1. (problem)

Given:

Required:

Solution:
VI. REFERENCES
Romeo Daligdig, EdD, Mathematics in the Modern World

https://www.khanacademy.org/math/in-in-class-7th-math-cbse/x939d838e80cf9307:comparing-quantities/x939d838e80cf9307:simple-interest/v/intro-to-simple-interest-
comparing-quantities-class-7-india-math-khan-academy#:~:text=Use%20this%20simple%20interest%20calculator,the%20same%20units%20of%20time.
https://www.mathsisfun.com/money/interest.html

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