Our Lady of Lourdes College

5031 Gen. T de Leon, Valenzuela City

DETAILED LESSON PLAN IN

PRE-CALCULUS 11
School Year 2024-2025
Date: October 22, 2024
Grade: 11
I. OBJECTIVES
At the end of 1 hour and 45 minutes, the learners are expected to:
a. Define annuities;
b. Identify the different types of Annuities;
c. Compute for the future and present value of an ordinary simple annuity.

II. SUBJECT MATTER

TOPIC: Annuities
DURATION: 1 hour and 45 minutes
REFERENCES: General Mathematics 11
Instructional Materials: Visual Aids, Printed Materials

III. LEARNING PROCEDURES

Teacher’s Response Student’s Response

A. Preliminary Activities

Good morning class, Good morning, Ma’am Vargas.

Let us pray first. Ms./Mr. kindly lead the Selected student will lead the prayer
prayer.

Before taking your seats, kindly pick up those Students will pick up the litters around them
litters that you see around you and arrange the and will arrange their chairs.
chairs properly.

Are there any absentees today, Ms. Secretary? The class secretary will tell the names of the
absentees.

Okay, thank you.

 B. Motivation

As a recap, today, we're going to play the

Matching Game! The goal is to identify the
riddle being described.

Are you ready to play?

Before that, here’s the mechanics. Yes ma’am.

Activity: RIDDLE OF INTEREST!

How to Play:

 The class will be divided into two.

 The teacher will read the riddle and the Students will listen to the mechanics to
students will analyze and identify what understand the game.
is being described.
 Each team will have a chance to answer
by raising their pen if they already
know the answer.
 The student with the most points at the
end wins.

Did you get it? Yes ma’am.

"I grow slow and steady, no surprise, just

based on the principal, no extra rise. My Simple Interest
growth is linear, you’ll always know, how much
you’ll have as I continue to grow. What am I?"

"I’m interest that grows fast and wide, on both

what you’ve earned and what’s inside. My Compound Interest
power comes when I multiply, making your
money reach for the sky. What am I?"

"I tell you what your future is worth today, with

discounting methods that show the way. I’m Present Value
smaller now, but over time I’ll grow, if you
invest me right, that’s all you need to know.
What am I?"

"I’m the treasure at the end of the line, what

your investments will become in time. Interest Future Value
and growth will make me more, if you wait,
I’m worth a lot in store. What am I?"
Congratulations to the winning group. The winning group may vary.

Did you enjoy our game? Yes ma’am

C. Lesson Proper

Now, that you’ve warm up your minds, we will

going to discuss a new topic entitled, annuities

Let us start by defining what an annuity is.

Kindly read the definition.

Introduction

Kindly read.

Annuities

An annuity is a financial product or An annuity is a financial product or

arrangement where regular, fixed payments are arrangement where regular, fixed payments
made over a specific period of time. are made over a specific period of time.

Okay so, annuities are often used for

investment or retirement purposes, where a
person invests a lump sum or makes regular
contributions, and in return, they receive
periodic payments (monthly, quarterly, yearly,
etc.).

Annuities can be certain or uncertain.

Read first the annuity certain.

Annuity Certain
It is an annuity certain when specific amounts It is an annuity certain when specific amounts
of payments are set to begin and end at a of payments are set to begin and end at a
specific length of time, such monthly cable specific length of time, such monthly cable
provider installments. provider installments.

Next, the uncertain.

Annuity Uncertain
If a person is paid according to a specific event If a person is paid according to a specific
in which the start of payment and the amount event in which the start of payment and the
of payment is dependent on that event, such as amount of payment is dependent on that
in the case of life insurance benefits. event, such as in the case of life insurance
benefits.
Okay, thank you for reading.
Okay, meaning to say, A certain annuity has
fixed, guaranteed payments made at regular
intervals for a specified period. An uncertain
annuity has payments that depend on external
factors, such as life expectancy or other
conditions, making the schedule unpredictable.

Next we have:

A. Annuities Based on Payment Dates

1. Ordinary Annuity
Equal payments are made at the end Ordinary Annuity- Equal payments are made
of each payment interval. at the end of each payment interval.
2. Annuity Due Annuity Due- Periodic payments are made at
Periodic payments are made at the the beginning of each payment interval.
beginning of each payment interval.

In short, an ordinary annuity pays at the end,

while an annuity due pays at the start of each
period.

Did you understand? Okay let’s proceed. Yes ma’am.

B. Annuities Based on Compounding

Periods

Read number 1.

1. Simple Annuity
The term used for annuities whose Simple Annuity is the term used for annuities
payment or receipt period is the whose payment or receipt period is the same
same as the interest period. as the interest period.
Continue.
a. Ordinary Simple Annuity
Payments or receipt made at the Ordinary Simple Annuity- Payments or
end of the compounding period, receipt made at the end of the compounding
which is in the same interest period, which is in the same interest period.
period.
b. Simple Annuity Due Simple Annuity Due- Payments or receipts
Payments or receipts made at made at the beginning of the compounding
the beginning of the period, which is in the same interest period.
compounding period, which is
in the same interest period.

Okay, thank you.

In simple terms, an ordinary simple annuity

has payments at the end of each period, and the
simple annuity period is the interval between
those payments, with interest calculated at the
same frequency.

Now, we have the general annuity. Kindly read.

2. General Annuity
The term used for annuities whose General Annuity- The term used for annuities
payment or receipt period does not whose payment or receipt period does not
coincide with the interest period. coincide with the interest period.
Continue.
a. Ordinary General Annuity Ordinary General Annuity- Payments or
Payments or receipt made at the receipt made at the end of the compounding
end of the compounding period, period, which is not the same as the interest
which is not the same as the period.
interest period.
b. General Annuity Due General Annuity Due- Payments or receipt
Payments or receipt made at the made at the beginning of the compounding
beginning of the compounding period, which is not the same as the interest
period, which is not the same as period.
the interest period.

In summary, the key difference is that in an

ordinary general annuity, payments are made
at the end of the period, while in a general
annuity due, payments are made at the
beginning, and the compounding and payment
intervals differ in both cases.

Understood? Yes ma’am.

Okay, let’s now proceed to the present value

and future value of annuities.

Present and Future Value of Annuities

1. Present and Future Values of An
Ordinary Simple Annuity

Read the future value.

a. Future Value
Calculates the final value of a series Future Value calculates the final value of a
of payments or except made at the series of payments or except made at the end
end of the interest period which is of the interest period which is equal to the
equal to the compounding period. compounding period.

So, we will be using this formula:

(1+𝑟)𝑛 −1
𝐹𝑉𝑂𝐴 = PMT [ ]
𝑟

Kindly read the example:

Let’s assume that Mr. Brown is annually
Example: Let’s assume that Mr. Brown is
receiving Php10,000 at year end from
annually receiving Php10,000 at year end from Investment A for the next 5 years, and he
Investment A for the next 5 years, and he invested each receipt at 5%. How much
invested each receipt at 5%. How much would would he have at the end of the transactional
he have at the end of the transactional period? period?

Let’s identify first our given: PMT – 10,000

r = 5% = 0.05
n=5
Okay, very good.

Now, distribute the given in our formula. (1+𝑟)𝑛 −1

𝐹𝑉𝑂𝐴 = PMT [ ]
𝑟
(1+0.05)5 −1
𝐹𝑉𝑂𝐴 = 10,000 [ ]
0.05
(1.05)5 −1
𝐹𝑉𝑂𝐴 = 10,000 [ ]
0.05
(1.276281−1
𝐹𝑉𝑂𝐴 = 10,000 [ ]
0.05
𝐹𝑉𝑂𝐴 = 10,000 [5.525631]

𝑭𝑽𝑶𝑨 = Php55,256.31

Okay, very good.

Next we have the present value. Kindly read.

b. Present Value
Obtains the value of a series of Present Value- Obtains the value of a series of
future periodic payments at a given future periodic payments at a given time
time which coincides with the which coincides with the period of
period of compounding. compounding.
In here, we will be using the formula:

1−(1+𝑟)−𝑛
𝑃𝑉𝑂𝐴= PMT [ ]
𝑟

Wherein,
PMT is the cash flow per period,
r is the rate of return per period, and
n is the number of payments per
term.

If the future value is given, this formula may

be used:

PV = FV(1 + r)−𝑛

Using the previous example, we can compute

the present value of Mr. Brown’s investment as
follows:
 1−(1+𝑟)−𝑛
𝑃𝑉𝑂𝐴= PMT [ ]
𝑟
1−(1+0.05)−5
Using the same given, distribute it to our 𝑃𝑉𝑂𝐴= 10,000 [ ]
0.05
formula in present value. 𝑃𝑉𝑂𝐴= 10,000 [4.329477]
𝑷𝑽𝑶𝑨= Php43,294.77

Okay, that is correct.

Did everyone follow? Yes ma’am.

Next.

2. Present and Future Values of a

Simple Annuity Due
a. Future Value
Calculates the final value of series Future Value- Calculates the final value of
of cash flows on a future date equal series of cash flows on a future date equal to
to its compounding period wherein its compounding period wherein the first
the first installment has installment has immediately been rendered.
immediately been rendered.

The formula to be used:

(1+𝑟)𝑛 −1
FVAD = (1 + r) x PMT [ ]
𝑟

Using the same example, we can

calculate is as follows.
(1+𝑟)𝑛 −1
FVAD = (1 + r) x PMT [ ]
𝑟

Again distribute the same given in our new FV = (1 + 0.05) x 10,000 [ (1+0.05)5 −1]
AD
formula. 0.05
0.276282
= (1.05) (10,000) [ 0.05 ]
= (1.05) (10,000) [ 5.525631]
= Php58,019.13

Very Good.

b. Present Value
Used interchangeably with the term Present Value are used interchangeably with
Immediate Annuity, it calculates a the term Immediate Annuity, it calculates a
series of periodic cash flows that series of periodic cash flows that start
start immediately. It uses the same immediately. It uses the same formula as
formula as ordinary annuity; except, ordinary annuity; except, the first cash flow is
the first cash flow is added to the added to the present value of the remaining
present value of the remaining periodic cash flows.
periodic cash flows.

1 − (1 + 𝑟)−(𝑛−1)
𝑃𝑉𝐴𝐷 = 𝑃𝑀𝑇 + 𝑃𝑀𝑇 [ ]
𝑟
or
1 − (1 + 𝑟)−𝑛
𝑃𝑉𝐴𝐷 = (1 + 𝑟)𝑥 𝑃𝑀𝑇 [ ]
𝑟

Let’s proceed to number 3.

Kindly read a and b.

3. Present and Future Values of an

Ordinary General Annuity
a. Future Value Future or final value of a cash flow series that
Future or final value of a cash flow are made at the end of a payment or receipt
series that are made at the end of a period unequal to the compounding period.
payment or receipt period unequal
to the compounding period.
b. Present Value Present Value- Periodic value of a cash flow
Periodic value of a cash flow that that are made at the end of a payment or
are made at the end of a payment or receipt period unequal to the compounding
receipt period unequal to the period.
compounding period.

Next is the present and future value of general

annuity.

4. Present and Future Values of General

Annuity Due
a. Future Value
The future value of a general The future value of a general annuity due is
annuity due is the total accumulated the total accumulated value of the fixed
value of the fixed payments made at payments made at the beginning of each
the beginning of each period, at a period, at a specified point in the future,
specified point in the future, assuming those payments are invested and
assuming those payments are earn interest.
invested and earn interest.
b. Present Value
The present value of a general The present value of a general annuity due is
annuity due is the total worth of a the total worth of a series of fixed payments
series of fixed payments made at made at the beginning of each period,
the beginning of each period, evaluated at the current time
evaluated at the current time.

Okay, so the key feature of a general annuity

due is the combination of payments made at
the beginning of the period and different
compounding intervals, which affects both the
present and future values.

Did you understood, class? Yes ma’am.

Next.
 C. Perpetuity
An annuity which has an infinite Perpetuity an annuity which has an infinite
payment or receipt period, wherein payment or receipt period, wherein payments
payments and receipts extend and receipts extend indefinitely.
indefinitely.

When we say perpetuity it is a financial

instrument that provides an infinite series of
cash flows or payments that continue
indefinitely.

Next, please read.

D. Simple Deferred Annuity Simple Deferred Annuity is an annuity in

An annuity in which the first payment which the first payment or receipt is deferred
or receipt is deferred after a certain after a certain period of time. This time
period of time. This time interval is interval is called Deferred Period, which
called Deferred Period, which covers covers the present to the start of the annuity
the present to the start of the annuity period.
period.
1. Ordinary Simple Deferred Ordinary Simple Deferred
The deferral period ends one The deferral period ends one payment or
payment or receipt interval before receipt interval before the start of periodic
the start of periodic payment. payment.
2. Deferred Simple Annuity Due
The deferral period ends at the Deferred Simple Annuity Due
beginning of the first periodic The deferral period ends at the beginning of
payment the first periodic payment

In here, a simple deferred annuity is a financial

product that provides a series of payments
starting at a future date rather than
immediately.

Next, who wants to read.

Future Value of a Deferred Annuity (𝑭𝑽𝒅𝒆𝒇 ) Future Value of a Deferred Annuity (𝐹𝑉𝑑𝑒𝑓 )
The sum of the series of payments or receipts The sum of the series of payments or receipts
at the end of the annuity period. at the end of the annuity period.

Present Value of a Deferred Annuity (𝑷𝑽𝒅𝒆𝒇 ) Present Value of a Deferred Annuity (𝑃𝑉𝑑𝑒𝑓 )
The discounted value of the series of payments The discounted value of the series of
or receipts at the beginning of the deferral payments or receipts at the beginning of the
period. deferral period.

Meaning, The Future Value of a Deferred

Annuity is the total amount you will receive at
the end of the annuity period, including all
payments made during that time. The Present
Value of a Deferred Annuity is the current
worth of all future payments, calculated at the
beginning of the deferment period, taking into
account the time value of money.

Did understand the concept of annuities? Yes ma’am.

Okay very good, I hope you’ve learned a lot

today.
D. Generalization

Okay now to measure your takeaways from

today’s discussion, I will ask you some
questions.

1. What is an annuity? An annuity is a financial product or

arrangement where regular, fixed payments
are made over a specific period of time.

2. What is the difference between annuity A certain annuity has fixed, guaranteed
certain and uncertain? payments made at regular intervals for a
specified period. An uncertain annuity has
payments that depend on external factors,
such as life expectancy or other conditions,
making the schedule unpredictable.

3. How can you define the general A general annuity is a financial product that
annuity? provides a series of payments made at regular
intervals over a specified period, where the
timing of the payments and the interest
compounding periods may differ.

Okay, Very Good class.

It seems that you learned something today.
That’s good.
E. Application
Now for your activity, get one-half crosswise
and answer the following.

Direction: Analyze the problem and answer

the following.

Solve for the future and present value using the

given problem.

1. Mr. Garcia is annually receiving (1+𝑟)𝑛 −1

𝐹𝑉𝑂𝐴 = PMT [ ]
Php10,000 at year end from Investment 𝑟
(1+0.05)5 −1
A for the next 5 years, and he invested 𝐹𝑉𝑂𝐴 = 10,000 [ ]
0.05
 each receipt at 5%. How much would 𝐹𝑉𝑂𝐴 = 10,000 [
(1.05)5 −1
]
he have at the end of the transactional 0.05
(1.276281−1
period? 𝐹𝑉𝑂𝐴 = 10,000 [ ]
0.05
𝐹𝑉𝑂𝐴 = 10,000 [5.525631]

𝐹𝑉𝑂𝐴 = Php55,256.31

1−(1+𝑟)−𝑛
𝑃𝑉𝑂𝐴= PMT [ ]
𝑟
1−(1+0.05)−5
𝑃𝑉𝑂𝐴= 10,000 [ ]
0.05
𝑃𝑉𝑂𝐴= 10,000 [4.329477]
𝑃𝑉𝑂𝐴= Php43,294.77

2. Using the same given in problem 1,

solve for Future Value of a Simple (1+𝑟)𝑛 −1
Annuity Due FVAD = (1 + r) x PMT [ ]
𝑟

(1+0.05)5 −1
FVAD = (1 + 0.05) x 10,000 [ ]
0.05
0.276282
= (1.05) (10,000) [ 0.05 ]
= (1.05) (10,000) [ 5.525631]
= Php58,019.13

IV. Evaluation
Now, get one-fourth paper and answer the
following.
Direction: Choose the correct term that
matches the definition.

1. Definition: A financial product that

provides a series of fixed payments
made at regular intervals over a
specified period. 1. b) Annuity
a) Perpetuity
b) Annuity
c) Deferred Annuity
Answer: __________
2. Definition: An annuity where payments
are made at the end of each period. 2. b) Ordinary Annuity
a) Annuity Due
b) Ordinary Annuity
c) Simple Deferred Annuity
Answer: __________
3. Definition: An annuity where payments
are made at the beginning of each
period. 3. b) Annuity Due
a) Ordinary Annuity
b) Annuity Due
c) Simple Annuity
Answer: __________
4. Definition: The current worth of a
series of future payments, evaluated at
today's interest rates.
a) Future Value 4. b) Present Value
b) Present Value
c) General Annuity
Answer: __________
5. Definition: The total amount of money
that will be received at the end of the
annuity period, including all payments 5. b) Future Value
and interest accrued.
a) Present Value
b) Future Value
c) Simple Interest
Answer: __________
6. Definition: Interest calculated only on
the initial principal amount, without
compounding. 6. b) Simple Interest
a) Compound Interest
b) Simple Interest
c) General Annuity
Answer: __________
7. Definition: Interest calculated on both
the initial principal and the
accumulated interest from previous
periods. 7. c) Compound Interest
a) Simple Interest
b) Future Value
c) Compound Interest
Answer: __________
8. Definition: A financial instrument that
provides payments indefinitely without
a maturity date.
a) Simple Annuity 8. b) Perpetuity
b) Perpetuity
c) Deferred Annuity
Answer: __________
9. Definition: An annuity that begins
payments after a specified deferment
period. 9. a) Simple Deferred Annuity
a) Simple Deferred Annuity
b) Ordinary Annuity
c) Annuity Due
 Answer: __________
10. Definition: An annuity that involves
fixed payments made at regular
intervals but may have different
compounding periods than payment 10. b) General Annuity
intervals.
a) Ordinary Annuity
b) General Annuity
c) Annuity Due
Answer: __________

Okay, pass your papers.

V. Assignment
Now for your assignment, answer the
following.

Instructions: Answer the following questions

and complete the tasks.

1. Define the following terms in your own

words:

a) Annuity
b) Ordinary Annuity
c) Annuity Due
d) Present Value of an Annuity
e) Future Value of an Annuity

Any questions? None ma’am.

Okay, then.

That would be all for today.

Goodbye class. See you again next meeting. Goodbye and thank you, ma’am Vargas.

Prepared by:
Kim Nicole Vargas