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Definition of Terms GM2Q

The document defines key terms related to interest, annuities, stocks, and bonds. It also classifies different types of annuities according to payment interval, schedule, and duration. Finally, it provides formulas for simple interest, compound interest, annuities, and calculating dividend yield from stocks. The document appears to be instructional material for a General Mathematics class covering financial mathematics concepts and calculations.

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37 views3 pages

Definition of Terms GM2Q

The document defines key terms related to interest, annuities, stocks, and bonds. It also classifies different types of annuities according to payment interval, schedule, and duration. Finally, it provides formulas for simple interest, compound interest, annuities, and calculating dividend yield from stocks. The document appears to be instructional material for a General Mathematics class covering financial mathematics concepts and calculations.

Uploaded by

erueljosiahalvarez
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Philippine Christian University

Sampaloc 1, Dasmariñas City, Cavite 4114


SENIOR HIGH SCHOOL
S.Y. 2023-2024

General Mathematics 2nd Quarter


Definition of Terms

Simple interest - calculated by multiplying the interest rate by the principal amount and
the time.
Compound interest – interest is computed on the principal and on the accumulated past
interest.
Principal – amount of money borrowed or invested on the origin date.
Rate – percentage charged by the lender, or rate increase of the investment.
Interest – amount paid or earned for the use of money.
Maturity Value or Future Value – is the sum of the principal and the interest that
accumulates over the agreed term.
Time or Term – in the form of years, days, or months in which the money is borrowed or
invested, length of time between the origin and maturity dates.
Annuity – a sequence of payments made at equal (fixed) intervals or periods of time.
Payment Interval – the length of time between successive payments.
Term of Annuity – the total time between the first payment interval and last payment
interval.
Regular or Periodic Payment – the amount of each payment.
Amount of an Annuity/ Future Value – sum of the Future Values (compound amounts) of
all the payments to be made during the entire term of the annuity.
Present Value of an Annuity – sum of the Present Values of all the payments (lump sum)
to be made during the entire term of the Annuity.
Stocks - share in the ownership of a company
Stockholder- someone who has shares in a company.
Dividend- the amount of stockholders’ share of the company’s earning or profit.
Bonds- are loans provided to an organization like the government.
Bondholder- a holder of bonds issued by a government or corporation.
Par Value or Face Value – is the principal borrowed as shown in the bond.
Proposition – is a declarative sentence that is either true or false; it must be one or the other,
and it cannot be both.
Compound proposition - is a proposition formed from simpler proposition using logical
connectors or some combination of logical connectors.
Conditional statements - are those statements where a hypothesis is followed by a
conclusion.
Tautology – is a compound statement which is true for every value of individual statements.
A statement which is true and cannot be false.
Fallacy- the opposite of tautology is contradiction or fallacy. A compound statement which
is false and cannot be true. It is the use of invalid or otherwise faulty reasoning.
Contingency- a compound proposition which has both some true and some false values for
every value of its propositional variables.

CLASSIFICATION OF ANNUITIES
A. According to Payment Interval and Interest Period
1. SIMPLE ANNUITY – an annuity where the payment interval is the same as the interest
period.
2. GENERAL ANNUITY – an annuity where the payment interval is not the same as the
interest period.
B. According to Payment Schedule
1. Ordinary Annuity – a type of annuity in which the payments are made at the end of each
payment interval. Examples:
● installment basis of paying a car, appliance, house, and lot
● tuition fee
● salaries
● stock dividends
2. Annuity Due – a type of annuity in which the payments are made at the beginning of
each payment interval.
Examples:
● Rent
● Educational insurance plan
C. According to Duration (Term)
1. Annuity Certain – an annuity in which payments begin and end at definite times
(specific number of time periods).
Examples:
● Mortgage payment of house ● Salary ● Installment plans
2. Contingent Annuity – an annuity in which the payments extend over an indefinite
(indeterminate) length of time.
Examples:
● Life insurance that ceases when the person insured dies. ● Pension payments
Philippine Christian University
Sampaloc 1, Dasmariñas City, Cavite 4114
SENIOR HIGH SCHOOL
S.Y. 2023-2024

General Mathematics 2nd Quarter


Formulas
Name:_______________________________
Section:_____________________________

Simple Interest

Compound
Interest

Annuity

𝒕𝒐𝒕𝒂𝒍 𝒏𝒖𝒎𝒃𝒆𝒓 𝒐𝒇 𝒅𝒊𝒗𝒊𝒅𝒆𝒏𝒅


𝒏=
𝒕𝒐𝒕𝒂𝒍 𝒏𝒖𝒎𝒃𝒆𝒓 𝒐𝒇 𝒔𝒉𝒂𝒓𝒆𝒔
Stocks and
𝒏 = 𝑷𝒂𝒓 𝑽𝒂𝒍𝒖𝒆 𝒙 𝑫𝒊𝒗𝒊𝒅𝒆𝒏𝒅 𝑹𝒂𝒕𝒆 𝒙 𝑵𝒖𝒎𝒃𝒆𝒓 𝒐𝒇 𝑺𝒉𝒂𝒓𝒆
Bonds

Truth Table:

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