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Module 2 Math of Investment

The document is a course module for the Bachelor of Science in Business Administration focusing on the Mathematics of Investment, specifically compound interest. It outlines the definition, benefits, and costs of compound interest, along with intended learning outcomes and activities for students. Additionally, it includes assessment methods and resources for further learning.

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guegueakeem1999
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© © All Rights Reserved
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Download as DOCX, PDF, TXT or read online on Scribd
8 views

Module 2 Math of Investment

The document is a course module for the Bachelor of Science in Business Administration focusing on the Mathematics of Investment, specifically compound interest. It outlines the definition, benefits, and costs of compound interest, along with intended learning outcomes and activities for students. Additionally, it includes assessment methods and resources for further learning.

Uploaded by

guegueakeem1999
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 18

TAGOLOAN Community

College
Baluarte, Tagoloan, Misamis Oriental
Tel.No. (08822)740-835/(088)5671-215

College/Department: Bachelor of Science in Business Administration


(BSBA)
COURSE Code: CBMC 102 - MATHEMATICS OF INVESTMENT
2nd Semester of A.Y. 2023-2024

Introduction

Compound interest is the interest you earn on interest. It refers to the phenomenon
whereby the interest associated with a bank account, loan, or investment increases
exponentially over time. The key to understanding the concept is the word
“compound”. Compound interest makes your money grow faster because interest is
COURSE MODULE

calculated on the accumulated interest over time as well as on your original principal.
Compounding can create a snowball effect, as the original investments plus the
income earned from those investments grow together.

Rationale

Students will learn about compound interest as it applies to credit, debt, and saving.
Students learn what compound interest is and how it can work for someone (by growing
savings deposits over time) or against them (by increasing the amount owed on unpaid
debt). Students will also learn ways to earn the best interest rates on their savings and
how time magnifies the benefits or costs of compound interest.

Intended Learning Outcomes

A. Define and explain what compound interest is.


B. Calculate the benefits and cost of compound interest.
C. Learn ways on how to earn the best interest rates on savings.
D. Relate and Discuss

Activity

1. Find the present value of P60,000, due at the end of 4 years, if money is worth
10%, compounded semiannually.

2. Cecil borrowed P85,000 from Vilma at 9%, compounded monthly, but was unable
to pay the interest for the first 2 years. How much should Cecil pay Vilma in order to
continue at the original principal?

Discussion

Read topics attached below.

Exercises
1. Find the amount due at the end of 10 years if P42,000 is invested at 9%,
compounded quarterly.
2. Accumulate P30,000 for 2 years at (a) 9% simple interest, (b) 9%, compounded
monthly.
3. If interest is compounded monthly, what nominal rate is equivalent to an effective
rate of 8%?
4. Find the nominal rate, converted quarterly, that is equivalent to 8% effective rate.

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Assessment

Evaluation Approaches and Methods:

 Assignment (related activity designed in the syllabus as feedback to connect the past
and present)
 Quizzes (long and short: Announced and un-announced)
 Project (activity compilations)
 Major Exams (Mid-term and Final)

Reflection
 Explain in your own understanding what compound interest is.
 Would you lend money to a friend? if so, would you expect to be paid back more
than they lent because their money was unavailable for a period of time? (limit
your answer to one-two paragraphs only).
COURSE MODULE

Resources and Additional Resources

 Mathematics of Investment, Third edition (2012). Leodegario SM. Bautista et al.

Additional Resources:
 https://www.investopedia.com/terms/c/compoundinterest.asp
 https://www.mathsisfun.com/money/compound-interest.html
 https://smallbusiness.chron.com/uses-compound-interest-business-
49709.html

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