GENERAL MATHEMATICS

Level: SENIOR HIGH SCHOOL Semester: FIRST

Subject Group: CORE SUBJECT Quarter: SECOND

Course Description:
At the end of the course, the students must know how to solve problems involving rational, exponential
and logarithmic functions; to solve business-related problems; and to apply logic to real-life situations.
Course Requirements:
Below is the list of activities that must be completed and submitted with their corresponding percentage.
WEEK ACTIVITIES Date of Final
Completion Grade
1 ENABLING ASSESSMENT ACTIVITY NO. 1 –
2 SIMPLE AND COMPOUND INTEREST

3 Mini-Performance Task #1 – Annuity

4
5 Enabling Assessment Activity 2- Stocks and Bonds
6 Mini-Performance Task # 2 – Consumer and
Business Loan
7 Enabling Assessment Activity # 3 – Propositions

8 Culminating Performance Task

TOTAL

QUARTER 2 CULMINATING PERFORMANCE TASK

Goal: The problem/challenge is to assist two customers: one wants to invest while another one wants
to apply for a loan. You have to provide the best option to the customers.
Role: Financial Consultant
Audience: Customers
Situation: As a financial analyst, you are to present bank products, or loan schemes of government
agencies (SSS, GSIS, Pag Ibig) and other private financial institutions. It will also include requirements
for loan applications, loan processing, investing in stocks or bonds.
Product: Loan structure profile and investment report to aid Customer A and Customer B to make
decisions on the products that best suit their lifestyle.
Standards: The report will be evaluated according to the following criteria:
Mathematical Content (45%), Persuasive Presentation (30%), and Planning and Organization (25%)

0
 1
Colegio de Los Baños – GENERAL MATHEMATICS

PRE-REQUISITE ASSESSMENT
How are logarithmic and exponential differ from each other?

LESSON 9: SIMPLE AND COMPOUND INTERESTS

LEARNING MATERIALS: Module, pen, paper, old mathematics books, internet (if applicable)
PRE-REQUISITE CONTENT KNOWLEDGE: Exponential functions
PRE-REQUISITE SKILL: Calculating exponential functions

TIME ALLOTMENT: 4 HRS

CONSULTATION: For inquiries and clarifications regarding the lesson, you may contact your subject
teacher thru his/her FB Messenger.

RUA: At the end of the lesson, you should be able to:

• illustrate simple and compound interests.
• distinguish between simple and compound interests.
• compute interest, maturity value, future value, and present value in simple interest and compound
interest environment.
• solve problems involving simple and compound interests.

INSTITUTIONAL VALUES: Critical thinking, problem solving, and risk-taking

Students will be able to apply
a. Critical and Analytical thinking skills in distinguishing the difference between simple and
compound interest
b. Excellence in solving problems related to interest including maturity value, future value and
present value

OVERVIEW OF THE LESSON

This lesson is all about simple and compound interests; their differences from one another and the
relationship of maturity value, future value and present value in calculating interests.

STUDENT’S EXPERIENTIAL LEARNING

CHUNK 1: SIMPLE INTEREST

Simple Interest
An annual simple interest is based on 3 factors:
a. Principal which is the amount invested or borrowed
b. Simple interest rate, usually expressed in percent
c. Time or term of loan, in years

Annual Simple Interest, 𝑰𝒔 = 𝑷𝒓𝒕

Where 𝐼𝑠 = maturity (future) value
𝑃 = principal
𝑟 = interest
𝑡 = term (time in years)
 2
Colegio de Los Baños – GENERAL MATHEMATICS

Example: A bank offers 0.25% annual simple interest rate for a particular deposit. How much interest
will be earned if 1 million pesos is deposited in this savings account for 1 year?

Solution.

Answer: The interest earned is P2,500.

Example: When invested at an annual interest rate of 7%, an amount earned P11,200 of simple
interest in two years. How much money was originally invested?

Solution.

Answer: The amount invested is P80,000.

Example: If an entrepreneur applies for a loan amounting to P500,000 in a bank, the simple interest
of which is P157,500 for 3 years, what interest rate is being charged?

Solution:
Given: P = 500, 000
Is = 157, 500
t = 3 years
Find: r

Answer: The bank charged an annual simple interest rate of 10.5%.

 3
Colegio de Los Baños – GENERAL MATHEMATICS

Example: How long will a principal earn an interest equal to half of it at 5% simple interest?

Solution.

Given: P
r = 5% = 0.05
Is = ½ P = 0.5P

Find: t
𝐼𝑠 0.5𝑃
𝑡= =
𝑃𝑟 (𝑃)(0.05)
𝐼𝑠
𝑡 = = 10 𝑦𝑒𝑎𝑟𝑠
𝑃𝑟

Answer: It will take 10 years for a principal to earn half of its value at 5% simple annual interest rate.

Many persons or institutions are interested to know the amount that a lender will give to the borrower
on the maturity date. For instance, you may be interested to know the total amount of money in a
savings account after t years at an interest rate r. This amount is called the maturity value or future
value F.

Maturity (Future) Value, 𝐹 = 𝑃 + 𝐼𝑠

Where 𝐹 = maturity (future) value
𝑃 = principal
𝐼𝑠 = simple interest

Substituting 𝐼𝑠 = 𝑃𝑟𝑡

Maturity (Future) Value, 𝐹 = 𝑃(1 + 𝑟𝑡)

Where 𝐹 = maturity (future) value
𝑃 = principal
𝑟 = interest
𝑡 = term (time in years)

Example: Find the maturity value if 1 million pesos is deposited in a bank at an annual simple interest
rate of 0.25% after (a) 1 year and (b) 5 years?

Solution.
Given: P = 1, 000, 000
r = 0.25% = 0.0025

Find: (a) maturity or future value F after 1 year

(b) maturity or future value F after 5 years
 4
Colegio de Los Baños – GENERAL MATHEMATICS

Note: There are two ways to solve the problem.

Method 1: Solve the simple interest Is first and then add it to P , that is, F = P + Is.

Method 2: Use the derived formula F = P (1 + rt).

a. When t = 1, the simple interest is given by

Method 1:
Is =Prt
Is = (1, 000, 000)(0.0025)(1)
Is = 2, 500

The maturity or future value is given by F = P + Is

F =1,000,000+2,500
F = 1, 002, 500

Method 2: To directly solve the future value F,

F = P (1+rt)
F = (1, 000, 000)(1 + 0.0025(1))
F = 1, 002, 500
Answer: The future or maturity value after 1 year is P1,002,500.

b. When t = 5,
Method 1:
Is =Prt
Is = (1, 000, 000)(0.0025)(5)
Is = 12, 500

F = P + Is
F =1,000,000+12,500
F = 1, 012, 500

Method 2:
F = P (1+rt)
F = (1, 000, 000)(1 + 0.0025(5))
F = 1, 012, 500
Answer: The future or maturity value after 5 years is P1,012,500.

Chunk 2: COMPOUND INTERESTS

Many bank savings accounts pay compound interest. In this case, the interest is added to the
account at regular intervals, and the sum becomes the new basis for computing interest. Thus, the
interest earned at a certain time interval is automatically reinvested to yield more interest.

Maturity (Future) Value, 𝐹 = 𝑃(1 + 𝑟)𝑡

Where 𝐹 = maturity (future) value
𝑃 = principal
𝑟 = interest
𝑡 = term (time in years)
 5
Colegio de Los Baños – GENERAL MATHEMATICS

Compound Interest, 𝑰𝒄 = 𝑭 − 𝑷
Example: Find the maturity value and interest if P50,000 is invested at 5% compounded annually for
8 years.
Solution.

Answer: The maturity value F is P73,872.77 and the compound interest is P23,872.77.
Example: Suppose your father deposited in your bank account P10,000 at an annual interest rate of
0.5% compounded yearly when you graduated from kindergarten and you did not get the amount until
you will have finished Grade 12. How much will you have in your bank account after 12 years?

Solution.

Answer: The amount will become P10,616.77 after 12 years.

The present value or principal of the maturity value F due in t years any rate r can be obtained from
the maturity value formula F = P (1 + r)t.
 6
Colegio de Los Baños – GENERAL MATHEMATICS

Solving for the present value P,

Chunk 3: MATURITY VALUE, FUTURE VALUE AND PRESENT VALUE IN SIMPLE AND
COMPOUND INTEREST

Compounding More Than Once a Year

The compound frequency (or conversion frequency) is the number of compounding that takes place a
year. The number of conversion periods for one year is denoted by m, while the total number of
conversion periods for the whole investment term is denoted by n.
Compounding or Conversion Frequency Number of Compounding(s) or Conversion(s) per Year
Annually 1
Semi-Annually 2
Quarterly 4
Monthly 12
Weekly 52
Daily 365
Definition of Terms
Let us define the following additional terms:
• conversion or interest period - time between successive conversions of interest
• frequency of conversion (m) - number of conversion periods in one year
• nominal rate (i(m)) - annual rate of interest
• rate (j) of interest for each conversion period

• total number of conversion periods n

n = tm = (frequency of conversion) × (time in years)
Maturity (Future) Value, 𝐹 = 𝑃(1 + 𝑗)𝑡
Where 𝐹 = maturity (future) value
𝑃 = principal
𝑖𝑚
𝑗= 𝑚
rate for each conversion period
𝑡 = term (time in years)

𝒎𝒕
𝒊(𝒎)
𝑭 = 𝑷 (𝟏 + )
𝒎
 7
Colegio de Los Baños – GENERAL MATHEMATICS

𝑭
Present Value, 𝑷 = 𝒎𝒕
𝒊(𝒎)
(𝟏+ )
𝒎
Where 𝐹 = maturity (future) value
𝑃 = principal
𝑖𝑚
𝑗= 𝑚
rate for each conversion period
𝑡 = term (time in years)

Example: Find the maturity value and interest if P10,000 is deposited in a bank at 2% compounded
quarterly for 5 years.
Solution:
Given: P = 10, 000
𝑖 (4) = 0.02

Answer: The compound interest is given by

Ic =F - P =11,048.96 -10,000=P1,048.96

Example: Find the maturity value and interest if P10,000 is deposited in a bank at 2% compounded
monthly for 5 years.

Solution.
 8
Colegio de Los Baños – GENERAL MATHEMATICS

Compute for the interest rate in a conversion period by:

𝑖 12 0.02
𝑗= = = 0.0016̅
𝑚 12
Compute for the total number of conversion periods by:
𝑛 = 𝑚𝑡 = (12)(5) = 60 𝑐𝑜𝑛𝑣𝑒𝑟𝑠𝑖𝑜𝑛 𝑝𝑒𝑟𝑖𝑜𝑑𝑠.

Compute for the maturity value using:

𝐹 = 𝑃(1 + 𝑗)𝑛
= (10,000)(1 + 0.0016̅)60
𝐹 = 11, 050.79
Answer: The compound interest is given by
Ic = F - P
= 11,050.79 - 10,000
= P1,050.79

Example: Cris borrows P50,000 and promises to pay the principal and interest at 12%
compounded monthly. How much must he repay after 6 years?
Solution.
Given:
P = 50,000
I(12) = 0.12
t=6
m = 12

Find: F
You may also use the other formula to compute for the maturity value
𝑡𝑚
𝑖 12
𝐹 = 𝑃 (1 + )
𝑚
0.12 (6)(12)
𝐹 = 50,000 (1 + 12
)
72
𝐹 = 50,000(1.01)
𝐹 = 102, 352.97

Answer: Thus, Cris must pay P102,354.97 after 6 years.

Example Find the present value of P50,000 due in 4 years if money is invested at 12% compounded
semiannually.
Solution:
Given: F = 50, 000
t=4
i(2) = 0.12

Find: P
First, compute for the interest rate per conversion period given by:

𝑖 (2) 0.12
𝑗= = = 0.06
𝑚 2
The total number of conversion periods is 𝑛 = 𝑡𝑚 = (4)(2) = 8
 9
Colegio de Los Baños – GENERAL MATHEMATICS

The present value can be computed by substituting those values in the formula
𝐹
𝑃=
(1 + 𝑗)𝑛
Thus,
50,000 50,000
𝑃= 8
= = 31, 370.62
(1 + 0.06) (1.06)8

Example What is the present value of P25,000 due in 2 years and 6 months if money is worth 10%
compounded quarterly?

Solution.
 10
Colegio de Los Baños – GENERAL MATHEMATICS

WEEK 1 AND 2 ANSWER SHEET (Please submit only the answers. Do not return the entire module.)

Name: ________________________________ Section: _____________

Last Name, First Name

ENABLING ASSESSMENT ACTIVITY NO. 1 – SIMPLE AND COMPOUND INTEREST

ENGAGEMENT
Complete the table below by finding the unknown. Use a SEPARATE SHEET OF PAPER for your
solution.

Principal (P) Rate (r) Time (t) Interest (Is)

1. ________________ 2.5 % 4 1, 500

36, 000 2. _______________ 4 4,860

250,000 0.5% 3. ________________ 275

500,000 12.5% 10 4. ________________

Assimilation
Solve the following word problems. Show your solutions.
1. During this time of pandemic, many lending institutions offer a loan package to wage earners.
Suppose loan Company A offers you to borrow money amounting to PHP 50, 000 and payable
in 4 years at a simple interest rate of 3% per annum, while loan Company B offers a 3%
compounded annually. What loan company will you borrow money from, then justify why you
decided to choose to take out a loan from that particular loan company.
2. Mrs. Alyani wants to compare simple and compound interests on a P350,000 investment for 3
years and 3 months.
a. Find the interest if funds earn 6.5% simple interest for 1 year.
b. Find the interest if funds earn 6.5% interest compounded annually.
c. Find the difference between the two interests.

___________________________________________________________________
SIGNATURE OVER PRINTED NAME OF PARENT/GUARDIAN
DATE: _____________________
 11
Colegio de Los Baños – GENERAL MATHEMATICS

PRE-REQUISITE ASSESSMENT
What is the difference between future value and maturity value?

LESSON 10. ANNUITY

INTRODUCTION:
LEARNING MATERIALS: Module, pen, paper, calculator, internet (if applicable)
PRE-REQUISITE CONTENT KNOWLEDGE: simple and compound interests
PRE-REQUISITE SKILL: Calculating interests

TIME ALLOTMENT: 4 HRS

CONSULTATION: For inquiries and clarifications regarding the lesson, you may contact your teacher
thru his/her FB Messenger

RUA: At the end of the lesson, you should be able to:

• Illustrate simple and general annuities.
• distinguish between simple and general annuities.
• find the future value and present value of both simple annuities and general annuities.
• calculate the fair market value of a cash flow stream that includes an annuity.
• calculate the present value and period of deferral of a deferred annuity.

INSTITUTIONAL VALUES: Critical thinking, problem solving skills

Students will be able to apply
a. Critical and Analytical thinking skills in illustrating and distinguishing the difference between
simple and general annuity
b. Excellence in solving problems related to annuity including fair market value, future value and
present value

OVERVIEW OF THE LESSON

This lesson is all about annuities; the simple and general annuities, the future and present value of both
annuities. This also includes the calculation of the fair market value of a cash flow stream that includes
an annuity and the present value and period of deferred annuity.

STUDENT’S EXPERIENTIAL LEARNING

Chunk 1: SIMPLE AND GENERAL ANNUITY
ANNUITY– a sequence of payments made at equal(fixed) intervals or periods of time. Annuities may
be classified in different ways, as follows.

TYPES OF ANNUITIES

According to Simple Annuity- an annuity General Annuity - an annuity

payment interval where the payment interval is where the payment interval is not
and interest period the same as the interest period the same as the interest period
According to time of Ordinary Annuity (or Annuity Due – a type of annuity in
payment Annuity Immediate) – a type which the payments are made at
of annuity in which the the beginning of each payment
payments are made at the end period
of each payment interval
 12
Colegio de Los Baños – GENERAL MATHEMATICS

TYPES OF ANNUITIES

According to Annuity Certain- an annuity Contingent Annuity – an annuity

duration in which payments begin and in which the payments extend over
end at definite times an indefinite (or indeterminate)
length of time

Term of an Annuity, t – time between the first payment interval and last payment interval
Regular or Periodic payment, R – the amount of each payment
Amount (Future Value) of an annuity, F – sum of future values of all the payments to be made
during the entire term of the annuity
Present value of an annuity, P – sum of present values of all the payments to be made during the
entire term of the annuity

Examples of Annuity: installment basis of paying a car, appliance, house & lot, tuition fee
Examples of Contingent Annuity: life insurance, pension payments
Example of Simple Annuity: Installment payment for an appliance at the end of each month with
interest compounded monthly.
Example of General Annuity: Installment payment for an appliance at the end of each month with
interest compounded annually.

Both simple and general annuities may be illustrated using a time diagram. The time diagram for an
ordinary annuity (i.e., payments are made at the end of the year) is given below.

Example 1. Suppose Mrs. Remoto would like to save P3,000 every month in a fund that gives 9%
compounded monthly. How much is the amount or future value of her savings after 6 months?

Given: periodic payment R = P3,000

term t = 6 months
interest rate per annum 𝑖12 = 0.09
number of conversions per year m = 12
interest rate per period 𝑗 = = 0.0075

Find the amount (future value) at the end of the term, F

 13
Colegio de Los Baños – GENERAL MATHEMATICS

Solution
(1) Illustrate the cash flow in a time diagram

(2) Find the future value of all the payments at the end of the term (t =6)
3) Add all the future values obtained from the
previous step.

Thus, the amount of this annuity is P18,340.89.

Chunk 2: Future Value and Present Value of Simple and General Annuities

Amount (Future Value) of ordinary annuity:

The future value F of an ordinary annuity is given by Where:
R - the regular payment;
j - the interest rate per period;
n - the number of payments

Using the formula with the previous problem

Example 2. In order to save for her high school graduation, Marie decided to save P200 at the end of
each month. If the bank pays 0.250% compounded monthly, how much will her money be at the end
of 6 years?
Given:
R = 200
m = 12
𝑖12= 0.25% = 0.0025

𝑗 == 0.0002083 t = 6 years
Find F
Hence, Marie will be able to save P14,507.85 for her graduation
 14
Colegio de Los Baños – GENERAL MATHEMATICS

Example 3: (Recall the problem in Example 1.) Suppose Mrs. Remoto would like to know the present
value of her monthly deposit of P3,000 when interest is 9% compounded monthly. How much is the
present value of her savings at the end of 6 months?

Given:
periodic payment R = 3,000
term t = 6 months
interest rate per annum 𝑖12 = 0.09
number of conversions per year m = 12
interest rate per period 𝑗 =

Find: Present value P

(1) Discount the payment of each period to the beginning of the term. That is, find the present value of
each payment. Recall the formula

Thus, the present value of her savings at the end of the six months is P17,536.79.

Alternate Solution:
Since we already know from Example 1 that the accumulated amount at the end of 6 months is
P18,340.89, then we can simply get the present value of this amount using the formula

Present Value of an Ordinary Annuity

The present value of an ordinary annuity is given by Where:
R is the regular payment;
j is the interest rate per period;
n is the number of payments
 15
Colegio de Los Baños – GENERAL MATHEMATICS

The cash value or cash price of a purchase is equal to the down payment (if there is any) plus the
present value of the installment payments.

Example 4. Mr. Ribaya paid P200,000 as down payment for a car. The remaining amount is to be
settled by paying P16,200 at the end of each month for 5 years. If interest is 10.5% compounded
monthly, what is the cash price of his car?
Given:
down payment = 200,000
R = 16,200
𝑖12 = 0.105
m = 12
𝑗= 0.00875
t = 5 years
n = mt = (12)(5) = 60 periods

Find: cash value or cash price of the car

1 − (1 + 𝑗)−𝑛
𝑃=𝑅
𝑗
1 − (1 + 0.00875)−60
= 16, 200
0.00875
= 953, 702. 20

The cash price of the car is P953,702.20.

Periodic payment R of an Annuity:

Periodic payment R can also be solved using the formula for amount F or present value P of an
annuity.

General Annuity
Where: R is the regular payment;
P is the present value of an annuity
F is the future value of an annuity
j is the interest rate per period
n is the number of payments

General Annuity an annuity where the length of the payment interval is not the same as the length of
the interest compounding period
General Ordinary Annuity – a general annuity in which the periodic payment is made at the end of
the payment interval

Examples of General Annuity:

1. Monthly installment payment of a car, lot, or house with an interest rate that is compounded annually
2. Paying a debt semi-annually when the interest is compounded monthly
 16
Colegio de Los Baños – GENERAL MATHEMATICS

Future and Present Value of a General Ordinary Annuity

The future value F and present value P of a general ordinary annuity is

Where: R - the regular payment;

j - the equivalent interest rate per payment interval given by converted from the interest
rate per period; and
n - the number of payments.

Example 1. Cris started to deposit P1,000 monthly in a fund that pays 6% compounded quarterly.
How much will be in the fund after 15 years?
Given: R = 1,000 n = 12(15) = 180 payments i(4) = 0.06m = 4
Find: F
Solution:
The cash flow for this problem is shown in the diagram below.

(1) Convert 6% compounded quarterly to its equivalent interest rate for monthly payment interval.

Thus, the interest rate per monthly payment interval is 0.00497521 or 0.497521%.

(2) Apply the formula in finding the future value of an ordinary annuity using the computed equivalent rate

Thus, Cris will have P290,082.51 in the fund after 20 years.

 17
Colegio de Los Baños – GENERAL MATHEMATICS

Example 2. A teacher saves P5,000 every 6 months in a bank that pays 0.25% compounded
monthly. How much will be her savings after 10 years?
Given: R = 5000 n = 2(10) = 20 payments 𝑖12 = 0.25% = 0.0025 m = 12
Find: F
Solution:
(1) Convert 0.25% compounded monthly to its equivalent interest rate for each semi-annual payment
interval.

Thus, the interest rate per semi-annual payment interval is 0.00125063 or 0.125%.

(2) Apply the formula in finding the future value of ordinary annuity using the computed equivalent rate

Thus, the teacher will be able to save P101,197.06 after 10 years.

Present Value of an Ordinary Annuity

where R is the regular payment;

j is the equivalent interest rate per payment interval converted from the interest rate per period; and
n is the number of payments.

Example 3. Ken borrowed an amount of money from Kat. He agrees to pay the principal plus interest
by paying P38,973.76 each year for 3 years. How much money did he borrow if interest is 8%
compounded quarterly?
Given: R = 38,973.76
𝑖(4) = 0.08
m=4
n = 3 payments
Find: present value P
 18
Colegio de Los Baños – GENERAL MATHEMATICS

Solution:
The cash flow for this problem is shown in the diagram below. Convert 8% compounded quarterly to
its equivalent interest rate for each payment interval.

Thus, the interest rate per payment interval is 0.082432 or

8.24%.

(1) Apply the formula in finding the present value of an ordinary annuity using the computed
equivalent rate j = 0.082432.

Hence, Ken borrowed P100,000 from Kat.

Chunk 3: Fair Market Value of a Cash Flow Stream

A cash flow is a term that refers to payments received (cash inflows) or payments or deposits made
(cash outflows). Cash inflows can be represented by positive numbers and cash outflows can be
represented by negative numbers.

The fair market value or economic value of a cash flow (payment stream) on a particular date refers
to a single amount that is equivalent to the value of the payment stream at that date. This particular
date is called the focal date.

Example 4. Mr. Ribaya received two offers on a lot that he wants to sell. Mr. Ocampo has offered
P50,000 and a P1 million lump sum payment 5 years from now. Mr. Cruz has offered P50,000 plus
P40,000 every quarter for five years. Compare the fair market values of the two offers if money can
earn 5% compounded annually. Which offer has a higher market value?
Given:
Mr. Ocampo’s offer Mr. Cruz’s offer
P50,000 down payment P50,000 down payment
P1,000,000 after 5 years P40,000 every quarter for 5 years
Find: fair market value of each offer
 19
Colegio de Los Baños – GENERAL MATHEMATICS

Solution.

We illustrate the cash flows of the two offers using time diagrams.
Mr. Ocampo’s offer Mr. Cruz’s offer

Choose a focal date and determine the values of the two offers at that focal date. For example, the
focal date can be the date at the start of the term.
Since the focal date is at t = 0, compute for the present value of each offer.

Mr. Ocampo’s offer:

Since P50,000 is offered today, then its present value is still PhP 50 000.The present value of
P1,000,000 offered 5 years from now is

Mr. Cruz’s offer:

We first compute for the present value of a general annuity with quarterly payments but with annual
compounding at 5%. Solve the equivalent rate, compounded quarterly, of 5% compounded annually.
The present value of an annuity is given by

Hence, Mr. Ocampo’s offer has a higher market value. The difference between the market values of
the two offers at the start of the term is 833 526.20 - 755 572.70 = P77,953.50
 20
Colegio de Los Baños – GENERAL MATHEMATICS

Example 5. Which has better market value?

Company A offers P150,000 at the end of 3 years plus P300,000 at the end of 5 years. Company B
offers P25,000 at the end of each quarter for the next 5 years. Assume that money is worth 8%
compounded annually.

Company A Company B
P150,000 at the end of 3 years P25,000 at the end of each quarter for
P300,000 at the end of 5 years the next 5 years

Find: fair market value of each offer

Solution.
(1) Illustrate the cash flows of the two offers using time diagrams.

Company A offer: Company B offer:

Suppose that selected focal date is the start of the term. Since the focal date is the start of the term,
compute for the present value of each offer.

Company A offer:
The present value of P150,000 three years from now is

The present value of P300,000 five years from now is

Company B offer:
Compute for the present value of a general annuity with quarterly
payments but with semi-annual compounding at 8%. Solve the
equivalent rate, compounded quarterly, of 8% compounded semi-
annually.
The present value of an annuity is given by

Therefore, Company B offer is preferable since its market value is larger.

 21
Colegio de Los Baños – GENERAL MATHEMATICS

Chunk 4: DEFERRED ANNUITY

Definition of Terms
Deferred Annuity – an annuity that does not begin until a given time interval has passed
Period of Deferral – time between the purchase of an annuity and the start of the payments for the
deferred annuity
Present Value of a Deferred Annuity
The present value of a deferred annuity is given by

where:
R is the regular payment;
j is the interest rate per period;
n is the number of payments ;
k is the number of conversion periods in the deferral

Example 1. On his 40th birthday, Mr. Ramos decided to buy a pension plan for himself. This plan will
allow him to claim P10,000 quarterly for 5 years starting 3 months after his 60th birthday. What one-
time payment should he make on his 40th birthday to pay off this pension plan, if the interest rate is
8% compounded quarterly?
Given: R=10,000, m=4, 𝑖(4) =0.08
Find: P
Solution.
The annuity is deferred for 20 years and it will go on for 5 years. The first payment is due three
months (one quarter) after his 60th birthday, or at the end of the 81st conversion period. Thus,
there are 80 artificial payments.
Number of artificial payments:𝑘 = 𝑚𝑡 = (4)(20) = 80
Number of actual payments: 𝑛 = 𝑚𝑡 = (4)(5) = 20
(4 )
Interest rate per period: 𝑗 = 𝑖 = 0.08 = 0.02
𝑚 4
If you assume that there are payments in the period of deferral, there would be a total of payments
𝑘 + 𝑛 = 80 + 20 = 100

Time Diagram:

Thus, the present value of the deferred annuity can be solved as

 22
Colegio de Los Baños – GENERAL MATHEMATICS

Example 2. A credit card company offers a deferred payment option for the purchase of any
appliance. Rose plans to buy a smart television set with monthly payments of P4,000 for 2 years. The
payments will start at the end of 3 months. How much is the cash price of the TV set if the interest
rate is 10% compounded monthly?
Given: R=4,000
m=12,
𝑖(12) =10
Find: P

Solution. The annuity is deferred for 2 months and it will go on for 2 years. The first payment is due at
the end of 3 months, or at the end of the 3rd conversion period. Thus, there are 2 artificial payments.
Number of artificial payments: 𝑘 =2
Number of actual payments: 𝑛 = 𝑚𝑡 = (12)(2) = 24
𝑖 (12) 0.10
Interest rate per period: 𝑗 = 𝑚
= 12
= 0.00833

If you assume that there are payments in the period of deferral, there would be a total of payments.
𝑘 + 𝑛 = 2 + 24 = 26 𝑝𝑎𝑦𝑚𝑒𝑛𝑡𝑠

Time Diagram:

Thus, the present value of the deferred annuity can be solved as

Therefore, the present value of the smart television set is P85,260.53.

 23
Colegio de Los Baños – GENERAL MATHEMATICS

WEEK 3 and 4 ANSWER SHEET (Please submit only the answers. Do not return the entire module.)

NAME: ________________________________________ SECTION: _________________

Last name, First Name SCORE: __________

Mini-Performance Task #1 - Annuity

ENGAGEMENT
Answer the following problems. Write your solution neatly and clearly. Box your final answer.
1. Find the present value of a 2-year deferred annuity at 4% interest compounded quarterly with
payments P1,000 made every quarter for 3 years.

2. Find the present value of a 3-year deferred annuity with regular payments of P10,000
compounded annually at an interest rate of 3%.

ASSIMILATION:
Write your answers on the space provided.
1. Which of the topics interest you the most? Why?
_____________________________________________________________________________
_____________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________
2. Which of the topics interest you the least? Why?
_____________________________________________________________________________
_____________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________
 24
Colegio de Los Baños – GENERAL MATHEMATICS

PRE-REQUISITE ASSESSMENT
How is fair market value in annuity different from the maturity value in interests?

Lesson 11: Stocks and Bonds

INTRODUCTION:
LEARNING MATERIALS: Module, pen, paper, calculator, internet (if applicable)
PRE-REQUISITE CONTENT KNOWLEDGE: Interests and Annuities
PRE-REQUISITE SKILL: Calculating annuities and interests

TIME ALLOTMENT: 4 HRS

CONSULTATION: For inquiries and clarifications regarding the lesson, you may contact your teacher
thru his/her FB Messenger

RUA: At the end of the lesson, you should be able to:

• illustrate stocks and bonds.
• distinguish between stocks and bonds.
• describe the different markets for stocks and bonds.
• analyze the different market indices for stocks and bonds.

INSTITUTIONAL VALUES: Critical thinking, problem solving skills

Students will be able to apply
a. Critical and Analytical thinking skills in illustrating and distinguishing the difference between
stocks and bonds
b. Excellence in solving market indices related to stocks and bonds

OVERVIEW OF THE LESSON

This lesson explains the difference between stocks and bonds in terms of: definition, its markets and
market indices.
DEVELOPMENT
MOTIVATION: What’s the difference between stocks & bonds?
https://www.youtube.com/watch?v=uI2vhCitTBw

Chunk 1: STOCKS and BONDS

STOCKS
Some corporations may raise money for their expansion by issuing stocks. Stocks are shares in the
ownership of the company. Owners of stocks may be considered as part owners of the company.
There are two types of stocks: common stock and preferred stock. Both will receive dividends or
share of earnings of the company.
Dividends are paid first to preferred shareholders.
Stocks can be bought or sold at its current price called the market value. When a person buys some
shares, the person receives a certificate with the corporation’s name, owner’s name, number of
shares and par value per share.
 25
Colegio de Los Baños – GENERAL MATHEMATICS

BONDS
Bonds are interest bearing security which promise to pay an amount of money on a certain maturity
date as stated in the bond certificate. Unlike the stockholders, bondholders are lenders to the
institution which may be a government or private company. Some bond issuers are the national
government, government agencies, government owned and controlled corporations, non-bank
corporations, banks and multilateral agencies.
Bondholders do not vote in the institution’s annual meeting but are the first to claim in the institution’s
earnings. On the maturity date, the bondholders will receive the face amount of the bond. Aside from
the face amount due on the maturity date, the bondholders may receive coupons
(payments/interests), usually done semi-annually, depending on the coupon rate stated in the bond
certificate.

Comparison of Stocks and Bonds

Stocks Bonds
A form of equity financing or raising money A form of debt financing, or raising money by
by allowing investors to be part owners of the borrowing from investors
company.
Stock prices vary every day. These prices are Investors are guaranteed interest payments
reported in various media (newspaper, TV, and a return of their money at the maturity date
internet, etc).
Investors can earn if the stock prices Investors still need to consider the borrower’s
increase, but they can lose money if the stock credit rating. Bonds issued by the government
prices decrease or worse, if the company pose less risk than those by companies
goes bankrupt. because the government has guaranteed
funding (taxes) from which it can pay its loans.
Higher risk but with possibility of higher Lower risk but lower yield
returns
Can be appropriate if the investment is for the Can be appropriate retirees (because of the
long term (10 years or more). This can allow guaranteed fixed income) or for those who
investors to wait for stock prices to increase if need the money soon (because they cannot
ever they go low. afford to take a chance at the stock market)

Definition of Terms in Relation to Stocks

• Stocks –share in the ownership of a company
• Dividend – share in the company’s profit
• Dividend Per Share –ratio of the dividends to the number of shares
• Stock Market –a place where stocks can be bought or sold. The stock market in the Philippines is
governed by the Philippine Stock Exchange (PSE)
• Market Value –the current price of a stock at which it can be sold
• Stock Yield Ratio –ratio of the annual dividend per share and the market value per share. Also called
current stock yield.
• Par Value –the per share amount as stated on the company certificate. Unlike market value, it is
determined by the company and remains stable over time.
 26
Colegio de Los Baños – GENERAL MATHEMATICS

Example 1. A certain financial institution declared a P30,000,000 dividend for the common stocks.
If there are a total of 700,000 shares of common stock, how much is the dividend per share?
Given: c = P30,000,000
Total Shares = 700,000
Find the dividend per share:
Solution.
𝑑𝑖𝑣𝑖𝑑𝑒𝑛𝑑 30,000,000
𝑑𝑖𝑣𝑖𝑑𝑒𝑛𝑑 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒 = = = 42.86
𝑡𝑜𝑡𝑎𝑙 𝑠ℎ𝑎𝑟𝑒𝑠 700, 000

Therefore, the dividend per share is P42.86.

Example 2. A certain corporation declared a 3% dividend on a stock with a par value of P500. Mrs
Lingan owns 200 shares of stock with a par value of P500. How much is the dividend she received?
Given: Dividend Percentage = 3% ,
Par Value = P500
Number of Shares = 200
Find: Dividend

Solution.
The dividend per share is: P500 x 0.03 = P15.
Since there are 300 shares, the total dividend is:
P15/share x 200 shares = P3,000

In summary,
𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑 = (𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑 𝑝𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒)(𝑃𝑎𝑟 𝑣𝑎𝑙𝑢𝑒)(𝑁𝑜. 𝑜𝑓 𝑆ℎ𝑎𝑟𝑒𝑠)
= (0.03)(500)(200)
= 3,000
Thus, the dividend is P3,000.

Example 3. Corporation A, with a current market value of P52, gave a dividend of P8 per share for
its common stock. Corporation B, with a current market value of P95, gave a dividend of P12 per
share. Use the stock yield ratio to measure how much dividends shareholders are getting in
relation to the amount invested.

Solution.
Given:
Corporation A Corporation B
Dividend per share = P8 Dividend per share = P12
Market value = P52 Market value = P95
Find: stock yield ratio Find: stock yield ratio

𝑑𝑖𝑣𝑖𝑑𝑒𝑛𝑑 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒 𝑑𝑖𝑣𝑖𝑑𝑒𝑛𝑑 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒

𝑠𝑡𝑜𝑐𝑘 𝑦𝑖𝑒𝑙𝑑 𝑟𝑎𝑡𝑖𝑜 = 𝑠𝑡𝑜𝑐𝑘 𝑦𝑖𝑒𝑙𝑑 𝑟𝑎𝑡𝑖𝑜 =
𝑚𝑎𝑟𝑘𝑒𝑡 𝑣𝑎𝑙𝑢𝑒 𝑚𝑎𝑟𝑘𝑒𝑡 𝑣𝑎𝑙𝑢𝑒
8 12
= =
12 95
= 0.1538 = 0.1268
= 15.38% = 12.63%
 27
Colegio de Los Baños – GENERAL MATHEMATICS

Corporation A has a higher stock-yield-ratio than Corporation B. Thus, each peso would earn you
more if you invest in Corporation A than in Corporation B. If all other things are equal, then it is wiser
to invest in Corporation A.
As Example 3 shows, the stock yield ratio can be used to compare two or more investments.

Definition of Terms in Relation to Bonds

• Bond – interest-bearing security which promises to pay (1) a stated amount of money on the
maturity date, and (2) regular interest payments called coupons.
• Coupon –periodic interest payment that the bondholder receives during the time between
purchase date and maturity date; usually received semi-annually
• Coupon Rate –the rate per coupon payment period; denoted by r
• Price of a Bond –the price of the bond at purchase time; denoted by P
• Par Value or Face Value - the amount payable on the maturity date; denoted by F.
If P = F, the bond is purchased at par.
If P < F, the bond is purchased at a discount.
If P > F, the bond is purchased at a premium.
Term of a Bond – fixed period of time (in years) at which the bond is redeemable as stated in the
bond certificate; number of years from time of purchase to maturity date.
Fair Price of a Bond –present value of all cash inflows to the bondholder.

Example 4. Determine the amount of the semi-annual coupon for a bond with a face value of
P300,000 that pays 10%, payable semi-annually for its coupons.
Given: Face Value F = 300,000
Coupon rate r = 10%
Find: Amount of the semi-annual coupon

Solution.
Annual coupon amount: 300,000(0.10) = 30,000.
Semi-annual coupon amount: 30,000 ( ) = 15,000

Example 5. Suppose that a bond has a face value of P100,000 and its maturity date is 10 years from
now. The coupon rate is 5% payable semi-annually. Find the fair price of this bond, assuming that the
annual market rate is 4%.
Given: Coupon rate r = 5%, payable semi-annually
Face Value = 100,000
Time to maturity = 10 years
Number of periods = 2(10) = 20
Market rate = 4%

Solution: Amount of semi-annual coupon: 100,000(0 .) = 2,500

The bondholder receives 20 payments of P2,500 each, and P100,000 at t = 10.
Present value of P100,000:
Present value of 20 payments of P2,500 each:
 28
Colegio de Los Baños – GENERAL MATHEMATICS

Convert 4% to equivalent semi-annual rate:

Price = 67,556.42 + 40,956.01 = 108,512.43.

Thus, a price of P108,512.14 is equivalent to all future payments, assuming an annual market rate of
4%.
Chuck 2: Market Indices for Stocks and Bonds
Definition: A stock market index is a measure of a portion of the stock market.
• One example is the PSE Composite Index or PSEI.
• It is composed of 30 companies carefully selected to represent the general movement of market
prices.
• The up or down movement in percent change over time can indicate how the index is performing.
• Other indices are sector indices, each representing a particular sector (e.g., financial institutions,
industrial corporations, holding firms, service corporations, mining/oil, property)
• The stock index can be a standard by which investors can compare the performance of their stocks. A
financial institution may want to compare its performance with those of others. This can be done by
comparing with the “financials” index.

Stock Index Tables

Stock indices are reported in the business section of magazines or newspapers, as well as
online (http://www.pse.com.ph/stockMarket/home.html). The following table shows how a list of
index values is typically presented (values are hypothetical).
Indices Most Active Advances Declines
As of June 10, 2020 12:50:00 PM Market Closed
Index Value Chg %Chg
PSEi 6,439.37 -144.47 -2.19
All shares 3, 786.10 -75.99 -1.97
Financials 1,309.13 -43.55 -3.22
Industrial 8,127.94 -93.02 -1.13
Holding Firms 6,551.17 -165.15 -2.46
Services 1,437.55 -4.97 -0.35
Mining and Oil 5,260.90 -209.65 -3.83
Property 3,229.28 -85.33 -2.57

Val – value of the index

Chg – change of the index value from the previous trading day (i.e., value today minus value
yesterday)
%Chg – ratio of Chg to Val (i.e., Chg divided by Val)
 29
Colegio de Los Baños – GENERAL MATHEMATICS

Stock Tables
Various information about stock prices can be reported. The following table shows how information
about stocks can be presented (values are hypothetical).

52-WK HI/LO – highest/ lowest selling price of the stock in the past 52 weeks
HI/LO– highest/ lowest selling price of the stock in the last trading day
STOCK– three-letter symbol the company is using for trading
DIV – dividend per share last year
VOL (100s)– number of shares (in hundreds) traded in the last trading day. In this case, stock AAA
sold 2,050 shares of 100 which is equal to 20,500 shares.
CLOSE- closing price on the last trading day.

Bond Market Indices

Definition: A bond market index is a measure of a portion of the bond market.
• The main platform for bonds or fixed income securities in the Philippines is the Philippine Dealing and
Exchange Corporation (or PDEx). Unlike stock indices which are associated with virtually every stock
market in the world, bond market indices are far less common. In fact, other than certain regional
bond indices which have sub-indices covering the Philippines, our bond market does not typically
compute a bond market index. Instead, the market rates produced from the bond market are interest
rates which may be used as benchmarks for other financial instruments.

The Bond Market and Government Bonds

• Government bonds are auctioned out to banks and other brokers and dealers every Monday by the
Bureau of Treasury. Depending on their terms (or tenors), these bonds are also called treasury bills
(tbills), treasury notes (t-notes), or treasury bonds (t-bonds). The resulting coupon rates and the total
amount sold for these bonds are usually reported by news agencies on the day right after the auction.
Since these bond transactions involve large amounts, these bonds are usually limited to banks,
insurance firms, and other financial institutions. The banks may then re-sell these bonds to its clients.

• Although the coupon rate for bonds is fixed, bond prices fluctuate because they are traded among
investors in what is called the secondary market. These prices are determined by supply and
demand, the prevailing interest rates, as well as other market forces. As the price of the bond may
increase or decrease, some investors may choose to sell back to banks the bonds they acquired
before their maturity to cash in their gains even before maturity.

• Despite the fact that bond investing is considered safer than stock investing, there is still some risk
involved. The most extreme scenario is default by the issuer. In this case, the investor can lose not
only the coupons, but even the money invested in the bond. Bond investors should thus be aware of
the financial condition of the issuer of the bond and of prevailing market conditions.
 30
Colegio de Los Baños – GENERAL MATHEMATICS

WEEK 5 ANSWER SHEET (Please submit only the answers. Do not return the entire module.)

NAME: ____________________________________________ SECTION: _______________

Last name, First Name, Middle Initial

Enabling Assessment Activity 2- Stocks and Bonds

A. Group the following characteristics of stocks and bonds and write on the space provided.
• Lower risk but with higher reward • Debt instrument
• Higher risk but with higher reward • Equity instrument
• Market value varies everyday • Own a small piece of the company
• It has a maturity day • Sold by Government and financial
• Makes profit by dividend institution

Stocks Bonds

B. Suppose you have savings in the bank that you want to invest in stocks and bonds instead of
setting up in a new business. Write one to two paragraphs discussing what method you can
use to make the investment and explain the reasons for your decision.
Content Area Rubric
15 • Use of the skills of evaluation, analysis, and synthesis is apparent.
• Sound reasoning is employed.
• Appropriate and accurate specific examples are cited and explained
10 • Use of the skills of synthesis and analysis is apparent.
• Reasoning employed is on the inferential level.
• Appropriate examples are cited and explained, however, some inaccurate
information is included.
5 • Use of literal skills is apparent.
• Reasoning employed is on the concrete level.
• Some examples may be cited, may attempt to be explained and inaccurate
information is included.
0 • There is little or no evidence of any apparent skills.
• There is little or no evidence of any reasoning employed.
• Examples, if cited, are inaccurate or inappropriate
 31
Colegio de Los Baños – GENERAL MATHEMATICS

PRE-REQUISITE ASSESSMENT
If you are to invest your savings, which is more practical, stocks or bonds? Justify your answer.

LESSON 12: BASIC CONCEPT OF LOANS

LEARNING MATERIALS: Module, pen, paper, calculator, internet (if applicable)
PRE-REQUISITE CONTENT KNOWLEDGE: Interests and Annuities
PRE-REQUISITE SKILL: Calculating exponential values, interests and annuities

TIME ALLOTMENT: 4 HRS

CONSULTATION: For inquiries and clarifications regarding the lesson, you may contact your
teacher thru his/her FB Messenger

RUA: At the end of the lesson, you should be able to:

• illustrate business and consumer loans.
• distinguish between business and consumer loans.
• solve problems involving business and consumer loans (amortization, mortgage).

INSTITUTIONAL VALUES: Critical thinking, problem solving skills

Students will be able to apply
a. Critical and Analytical thinking skills in illustrating and distinguishing the difference between
business and consumer loans
b. Excellence in solving problems related to business and consumer loans

OVERVIEW OF THE LESSON

This lesson is about the differences of business and consumer loans

STUDENT’S EXPERIENTAL LEARNING

Chunk 1: Business and Consumer Loans

Definition of Terms
Business Loan – money lent specifically for a business purpose. It may be used to start a business
or to have a business expansion
Consumer Loan –money lent to an individual for personal or family purpose
Collateral – assets used to secure the loan. It may be real-estate or other investments
Term of the Loan – time to pay the entire loan
• Consumer loans are given to an individual for personal or family purpose while business loans are
loans for businesses.
• Consumer and business loans may require collateral, which may be real estate or other
investments. For business loans, they can use equipment, fixtures or furniture as collateral.
• Consumer loans do not require a guarantor. Business loans require the business owner to sign
guarantors.
• For consumer loans, the bank or lending institution may require a credit report, bank statements
and income tax return and if the lendee is employed, a certificate of employment and employee
pay slips.
 32
Colegio de Los Baños – GENERAL MATHEMATICS

• For business loans, the lendee has to submit a credit report, income tax return and financial
statements. The term of the business loan is generally shorter that the consumer loan. The
interest rate for business loan is usually higher than that for the consumer loan.

For the following examples, identify whether the following is a consumer or business loan.
Business Consumer
loan loan
Example 1. Mr. Agustin plans to have a barbershop. He wants to
borrow some money from the bank in order for him to buy the
equipment and furniture for the barbershop.
Example 2. Mr and Mrs Craig want to borrow money from the bank
to finance the college education of their son.
Example 3. Mr. Alonzo wants to have some improvements on their
10year old house. He wants to build a new room for their 13-year old
daughter. He will borrow some money from the bank to finance this
plan.
Example 4. Mr. Samson owns a siomai food cart business. He
wants to put another food cart on a new mall in the other city. He
decided to have a loan to establish the new business.
Example 5. Roan has a computer shop. She owns 6 computers.
She decided to borrow some money from the bank to buy 10 more
computers.

Definition of Terms
Amortization Method – method of paying a loan (principal and interest) on installment basis,
usually of equal amounts at regular intervals
Mortgage – a loan, secured by a collateral, that the borrower is obliged to pay at specified terms.
Chattel Mortgage – a mortgage on a movable property
Collateral – assets used to secure the loan. It may be a real-estate or other investments
Outstanding Balance – any remaining debt at a specified time

Example 1. Mr. Garcia borrowed Solution.

P1,000,000 for the expansion of his Given: P = 1,000,000 j =0.07 n=1
business. The effective rate of Find F.
interest is 7%. The loan is to be Solution. 𝑭 = 𝑷(𝟏 + 𝒋)𝒏
repaid in full after one year. How 𝑭 = 1,000,000(𝟏 + 𝟎. 𝟎𝟕)𝟏
much is to be paid after one year? An amount of P1,070,000 must be paid after one
year.
 33
Colegio de Los Baños – GENERAL MATHEMATICS

Example 2 (Chattel mortgage). A Given: P = 1,200,000 Monthly payment = 31,000

person borrowed P1,200,000 for the Solution.
purchase of a car. If his monthly The total amount paid is given by
payment is P31,000 on a 5-year Total Amount = (31,000)(12 months)(5 years)
mortgage, find the total amount of = 1,860,000
interest. Thus, the total interest is the difference between
the total amount paid and the amount of the
mortgage;
Total Interest = 1,860,000 – 1,200,000
= 660,000

Example 3. If a house is sold for Solution.

P3,000,000 and the bank requires Down payment = down payment rate x cash price
20% down payment, find the amount = 0.20(3,000,000)
of the mortgage. = 600,000
Amount of the Loan = cash price - down payment
= 3,000,000 – 600,000
= 2,400,000
The mortgage amount is P2,400,000.
Note: In this case, the house itself is used as the mortgaged property. Also please take note
that the other way to solve this is to directly compute the mortgaged amount by multiplying the
cash value of the property by the percentage of the financed amount, which in this case,
100%-20%=80%.
Thus, the amount of the loan is given by : (0.80)(P3,000,000)= P2,400,000.
Example 4. Ms Rosal bought a car. Solution.
After paying the downpayment, the Given: P = 400,000
amount of the loan is P400,000 with i(12)= 0.09
an interest rate of 9% compounded 𝑖 12 0.09
monthly. The term of the loan is 3 𝑗 = 12
= 12 = 0.0075
years. How much is the monthly n = 36
payment?
Find the regular payment R

𝑃
𝑅=
1 − (1 + 𝑗)−𝑛
𝑛

400,000
𝑅=
1 − (1 + 0.0075)−36
0.0075

𝑅 = 12,719.89

The regular payment is P12,719.89.

 34
Colegio de Los Baños – GENERAL MATHEMATICS

Outstanding Balance(the amount of the loan at this time)

One method to compute the outstanding balance is to get the present value of all remaining
payments. This method is called the prospective method.
Example 5. Mrs. Se borrowed some Given:
money from a bank that offers an R = 11, 122.22
interest rate of 12% compounded i(12) = 0.12
monthly. His monthly amortization for 𝑖 12 0.12
5 years is P11,122.22. How much is 𝑗 = 12 = 12 = 0.01
the outstanding balance after the 12th
payment? k = 12 number of payments paid
n – k = 48since only 48 payments remain

Find: present value of 48 future payments (since

there are 48 payments left)
Solution:
1 − (1 + 𝑗)−(𝑛−𝑘)
𝐵𝑘 = 𝑅 [ ]
𝑗
1 − (1.01)−( 48)
= 11, 122.22 [ ]
0.01
= 422, 354.73
Example 6. Mr. and Mrs. Banal (b) Given: P =3,200,000 R = 35,234.76 n = 240
purchased a house and lot worth Find: total interest paid
P4,000,000. They paid a down There are 240 payments of P35,234.76. The
payment of P800,000. They plan to total payment is
amortize the loan of P3,200,000 by 240 x P 35,234.76 = P8,456,342.40.
paying monthly for 20 years. The
interest rate is 12% convertible The principal is only P 3,200,000.
monthly.
Interest Amount = Total Payments – Principal
(a) How much is the monthly
=8,456,342.40-3,200,000
payment?
= P5,256,342.40
(b) What is the total interest
paid? (c) What are the principal
The interest amount is P5,256,342.40
and interest components of the
51st payment? Solution:
(c) Find: principal and interest components of the
51st payment The 51st payment of P35,234.76 is
(a) Given: P =3,200,000
partly used to pay for the principal, and partly to
𝑖 12 = 0.12 pay for the interest.
𝑖 (12) 0.12
𝑖 (12) = = = 0.01
12 12 Step 1: Get the outstanding balance after the 50th
𝑛 = (𝑚)(𝑡) = (12)(20) = 240 payment (the balance after the 50th payment is
what the 51st payment will be for).
Find: regular payment R Since 50 payments have been paid already, there
Using the formula will be 190 remaining payments.
To solve for R: The outstanding balance after the 50th payment is:
 35
Colegio de Los Baños – GENERAL MATHEMATICS

𝑃 1 − (1 + 𝑗)−190
𝑅= 𝐵50 = 𝑅 [ ]
1 − (1 + 𝑗)−𝑛 𝑗
[ 𝑗 ]

1 − (1 + 0.01)−190
𝐵50 = 35,234.76 [ ]
3, 200, 000 0.01
𝑅=
1 − (1 + 0.01)−240
[ 0.01 ]
𝐵50 = 2,991,477.63

Step 2: After the 50th payment, the outstanding

𝑅 = 35, 234. 76 balance is P2,991,477.63.

Since the interest rate per period is j = 0.01, then

Therefore, the monthly payment is P the remaining balance of P2,991,477.63 will be
35,234.76. charged an interest of
(0.01)(2,991,477.63)=29,914,78.

The 51st payment of P35,234.76 will be used to pay

for this interest. Thus, the interest component I51 of
the 51st payment is P29,914.78.

The remaining portion of the 51st payment is the

principal component, denoted by PR51, is:
𝑃𝑅51 = 𝑅 − 𝐼50 = 35,234.76 − 29,914.78 = 5,319.98
Thus, for the 51st payment, the part that goes to
pay the interest is P29,914.78 and the part that
goes to pay the principal is P5,319.98.
 36
Colegio de Los Baños – GENERAL MATHEMATICS

WEEK 6 ANSWER SHEET (Please submit only the answers. Do not return the entire module.)

NAME: ___________________________________ SECTION: _________________________

Last name, First Name SCORE: __________

Mini-Performance Task # 2 – Consumer and Business Loans

ENGAGEMENT
Tell which of the following illustrate a business or consumer loan. Write a capital letter B that
would represent a business loan and a capital letter C for a consumer loan.
1. Maria wants to celebrate her birthday in California. She applied for a loan to cater these
expenses.
2. An actress bought the condominium near her house. She got a loan worth P2,000,000 in a
bank.
3. Mr. Lanz wants to buy 3 new computers for his PISO NET business. To do this, he
obtained a loan amounting to P100,000 from the bank.
4. Mang Tanny wants to buy a tricycle which will serve as his children’s service in going to
their school. To make this happen, he applied for a loan in a bank.
5. Ms. Yang was able to put up her tutorial center near the school. This was made possible by
an approved loan in a bank

Assimilation
Solve the following problems carefully. Write your solution neatly and clearly on a separate sheet
of paper.
1. A business loan of 800,000 is to be repaid in full after 2 years. What is the amount to be paid
if the effective rate of interest is 8%?
2. For the purchase of a farm worth P2,800,000, the bank requires 30% down payment, find the
mortgaged amount.
3. If a condominium is purchased for P1,700,000 and the bank requires 25% down payment,
how much is the mortgaged amount?
4. Mr. Sia got a P1,100,000 mortgage. If the monthly payment is P33,000 for five years, how
much is the total interest paid?
5. Mr. Yuson obtained a 20-year mortgage for P2,200,000. If his monthly payment is P18,500 ,
how much is the total interest?
 37
Colegio de Los Baños – GENERAL MATHEMATICS

PRE-REQUISITE ASSESSMENT
What is the difference between consumer and business loans?
Give examples of business and consumer loans.

LESSON 13 PROPOSITIONS
LEARNING MATERIALS: Module, pen, paper, internet (if applicable)
PRE-REQUISITE CONTENT KNOWLEDGE: Logic
PRE-REQUISITE SKILL: Understanding logical terms

TIME ALLOTMENT: 4 HRS

CONSULTATION: For inquiries and clarifications regarding the lesson, you may contact your
teacher thru his/her FB Messenger

RUA: At the end of the lesson, you should be able to:

• illustrate and symbolize propositions.
• distinguish between simple and compound propositions.
• perform the different types of operations on propositions.
• determine the truth values of propositions.
• illustrate the different forms of conditional propositions.
• illustrate different types of tautologies and fallacies.

INSTITUTIONAL VALUES: Critical thinking, problem solving skills

Students will be able to apply
a. Critical and Analytical thinking skills in illustrating and distinguishing the different types of
propositions
b. Excellence in solving problems using truth tables in propositions

OVERVIEW OF THE LESSON

This lesson is all about propositions; the different types, illustrations and symbols in presenting
propositions and presenting truth table using logic to verify different propositions

STUDENT’S EXPERIENTAL LEARNING

Chunk 1: PROPOSITIONS

Definition: A proposition is a declarative sentence that is either true (denoted either T or 1) or

false (denoted either F or 0).
Notation: Variables are used to represent propositions. The most common variables used are p,
q, and r. If a sequence of propositions is considered, we denote the propositions by 𝑝1, 𝑝2 …
Examples
“Drilling for oil caused dinosaurs to proposition declarative sentence
become extinct.”
“Look out!” not a Not a declarative sentence
proposition
“How far is it to the next town?” not a Not a declarative sentence
proposition
 38
Colegio de Los Baños – GENERAL MATHEMATICS

“x + 2 = 2x” not a Neither true nor false/ cannot be determined

proposition because no values of x was given
“x + 2 = 2x when x = −2” proposition Recall a proposition is a declarative
sentence that is either true or false.
All cows are brown. proposition Declarative sentence that is either true or
false.
The Earth is further from the sun proposition Declarative sentence that is either true or
than Venus. false.
There is life on Mars. proposition Declarative sentence that is either true or
false.
2×2=5 proposition Declarative sentence that is either true or
false.
“Do you want to go to the movies?” not a Since a question is not a declarative
proposition sentence, it fails to be a proposition.
“Clean up your room.” not a An imperative is not a declarative sentence;
proposition hence, fails to be a proposition.
“2x = 2 + x.” not a This is a declarative sentence, but unless x
proposition is assigned a value or is otherwise
prescribed, the sentence neither true nor
false, hence, not a proposition.
“This sentence is false.” not a that happens if you assume this statement
proposition is true? false? This example is called a
paradox and is not a proposition, because
it is neither true nor false.
You will pass GENMATH proposition Declarative sentence that is either true or
false 😊

Example 1. Determine whether each of Solution. Recall that for a statement to be a proposition,
the following statements is a proposition it must be a declarative sentence, and it should have a
or not. If it is a proposition, give its truth truth value of either true or false, but not both true and
value. false at the same time.

p: Mindanao is an island in the p. This is a declarative sentence, and Mindanao is an

Philippines. island in the Philippines. Hence p is a proposition.

q: Find a number which divides your q. This is an imperative sentence, and so it is not a
age. proposition.

r: My seatmate will get a perfect score in r. The statement is a declarative sentence, but its truth
the logic exam. value will only be known after the logic exam.
Nonetheless, it can either be true or false, but not both.
Hence r is a proposition.
 39
Colegio de Los Baños – GENERAL MATHEMATICS

s: Welcome to the Philippines! s. This statement is exclamatory, hence it is not a

proposition.

t: 3+2=5 t. The given equation is a mathematical sentence.

Translated into English, the equation reads “the sum of
three and two is five”, which is a declarative sentence. It
is also a true statement. Hence t is a true proposition.

√𝑥
u: 𝑓(𝑥) = (𝑥+1)is a rational function. u. This is a declarative statement. Since the numerator of
the function is not a polynomial function, the function f is
not rational, so the statement is false. It is therefore a
false proposition.

v: What is the domain of the function? v. This is an interrogative sentence. Hence it is not a
proposition.

w: I am lying. w. Although w is a declarative sentence, it is not a

proposition because it can neither be true nor false.
Suppose w is true—that is, it is the case that I am lying.
Since I am lying, my statement is not true, and so w
must be false. The same conclusion can be drawn if w
is assumed to be false.

𝑝1: It is not the case that √2 is a rational 𝑝1. While this is a declarative sentence, it can be shown
number. that cannot be expressed as a quotient of two integers.
Thus, is a false proposition.
𝑝2: Either logic is fun and interesting, or it
is boring. 𝑝2. This is a declarative sentence, which is true, since
students may find logic either fun or boring. Hence is a
𝑝3: If you are a Grade 11 student, then true proposition.
𝑝3. This is a declarative sentence, but it is not true. There
you are a Filipino.
are also Grade 11 students of other nationalities.

𝑝4. We know that it is a true proposition. This is also

𝑝4If you are more than 60 years old,
known as a biconditional statement, since we can
then you are entitled to a Senior
Citizen’s card, and if you are entitled to rewrite it as “You are more than 60 years old if and only
a Senior Citizen’s card, then you are if you are entitled to a Senior Citizen’s card.”
more than 60 years old.
 40
Colegio de Los Baños – GENERAL MATHEMATICS

Logical Operators
Definition: Given a proposition, its truth table shows all its possible truth values.
Definition: Unary Operator negation: “not p”, ¬p.
Definitions: Binary Operators
(a) conjunction: “p and q”, p ∧ q.
(b) disjunction: “p or q”, p ∨ q.
(c) exclusive or: “exactly one of p or q”, “p xor q”, p ⊕ q.
(d) implication: “if p then q”, p → q.
(e) biconditional: “p if and only if q”, p ↔ q.

Negation. Negation Operator, “not” has symbol ¬

Truth Table The negation operator is a unary
operator which, when applied to a
proposition p, changes the truth
value of p.
That is, the negation of a
proposition p, denoted by¬𝑝, is
the proposition that is false when p
is true and true when p is false.

Examples. State the negation of the Solution.

following propositions.
(𝑥+2) ¬𝑛1: “It is not true that is a polynomial function”
𝑛1: 𝑓(𝑥) = (𝑥+1) is a polynomial function.
or simply “ is not a polynomial function”.
𝑛2: 2 is an odd number. ¬𝑛2: “It is not true that 2 is an odd number”, or
“2 is an even number.”
𝑛3:Tinikling is the most difficult dance. ¬𝑛3: “Tinikling is not the most difficult dance.”
¬𝑛4: “Not everyone in Visayas speaks
𝑛4: Everyone in Visayas speaks Cebuano. Cebuano.”
 41
Colegio de Los Baños – GENERAL MATHEMATICS

Conjunction. Conjunction Operator, “and”, has symbol ˄.

p: This book is interesting. Truth Table The conjunction operator is the binary
q: I am staying at home. operator which, when applied to two
p ˄ q: This book is interesting, and I propositions p and q, yields the
am staying at home. proposition “p and q”, denoted p˄q. The
conjunction p˄q of p and q is the
proposition that is true when both p and q
are true and false otherwise.

Let p and q be the propositions Solution.

𝑝: Angels exist. 𝑞: 𝜋 > 3
Express the following conjunctions in
English sentences or in symbols, as the
case may be. 1. “Angels exist and 𝜋 > 3.”
1. 𝑝˄𝑞
2. “Angels exist and 𝜋 ≤ 3” or “Angels exist, yet
2. 𝑝˄¬𝑞
𝜋 ≤ 3.”
3. “Angels do not exist and 𝜋 ≤ 3 .”
3. (¬𝑝)˄(¬𝑞)
4. “While angels do not exist, 𝜋 > 3.”
4. (¬𝑝)˄𝑞

Disjunction. Disjunction Operator, inclusive “or”, has symbol ˅.

p: This book is Truth Table The disjunction operator is the binary operator
interesting. which, when applied to two propositions p and q,
yields the proposition “p or q”, denoted p ˅ q. The
q: I am staying at home. disjunction p ˅ q of p and q is the proposition that
is true when either p is true, q is true, or both are
p ˅ q: This book is true, and is false otherwise. Thus, the “or”
interesting, or I am intended here is the inclusive or. In fact, the
staying at home. symbol ˅ is the abbreviation of the Latin word vel
for the inclusive “or”.

Exclusive Or. Exclusive Or Operator, “xor”, has symbol ⊕.

p: This book is Truth Table The exclusive or is the binary operator which, when
interesting. applied to two propositions p and q yields the
q: I am staying at proposition “p xor q", denoted p ⊕ q, which is true
home. if exactly one of p or q is true, but not both. It is
p ⊕ q: This book is false if both are true or if both are false.
interesting, or I am Many times in our everyday language we use “or”
staying at home. in the exclusive sense. In logic,
however, we always mean the inclusive or when we
simply use “or" as a connective in a proposition. If
we mean the exclusive or it must be specified. For
example, in a restaurant a menu may say there is a
choice of soup or salad with a meal. In logic this
 42
Colegio de Los Baños – GENERAL MATHEMATICS

would mean that a customer may choose both a

soup and salad with their meal.
The logical implication of this statement, however,
is probably not what is intended.
To create a sentence that logically states the
intent the menu could say that there is a choice of
either soup or salad (but not both). The phrase
“either . . . or . . . " normally indicates the
exclusive or.

Implications. Implication Operator, “if...then...”, has symbol →.

p: This Truth Table Equivalent Forms of “If p then q":
book is • p implies q
interesting. • If p, q
q: I am • p only if q
staying at • p is a sufficient condition for q
home. • q if p
p→ q: If this book • q whenever p
is interesting, • q is a necessary condition for p
then I am staying The implication p →q is the proposition that is often read “if p
at home. then q." “If p then q" is false precisely when p is true but q is
false.
One way to think of the meaning of p → q is to consider it a
contract that says if the first condition is satisfied, then the
second will also be satisfied. If the first condition, p, is not
satisfied, then the condition of the contract is null and void. In
this case, it does not matter if the second condition is satisfied
or not, the contract is still upheld.

Definition. A compound proposition is a proposition formed from simpler proposition using

logical connectors or some combination of logical connectors. Some logical connectors
involving propositions p and/or q may be expressed as follows:
not p
p and q
p or q
If p, then q
where <.> stands for some proposition.
A proposition is simple if it cannot be broken down any further into other component propositions.
 43
Colegio de Los Baños – GENERAL MATHEMATICS

Example 2. For each of the propositions in Example 1, determine whether it is a simple or a

compound proposition. If it is a compound proposition, identify the simple components.

Solution. The propositions p, r, t, and u are all simple propositions. On the other hand, the
following are compound propositions:
𝑝1. It is not the case that is a rational number.
𝑝2. Either logic is fun and interesting, or it is boring.
𝑝3. If you study hard, then you will get good grades.
𝑝4. If you are more than 60 years old, then you are entitled to a Senior Citizen’s card, and if you
are entitled to a Senior Citizen’s card, then you are more than 60 years old.
Furthermore, we can determine the simple propositions that make up the propositions 𝑝1, 𝑝2 , 𝑝3
and 4. We do so in the following table P

Proposition Simple Components

𝑝1 is a rational number.
𝑝2 f: Logic is fun i: Logic is interesting b: Logic is boring
𝑝3 h: You study hard g: You get good grades

𝑝4 a: You are more than 60 years old: You are entitled to a Senior
Citizen’s card

The compound propositions can thus be expressed as follows:

𝑝1: not r 𝑝3: if h, then g
𝑝2:f and i or b 𝑝4: (if a then s) and (if s then a)

Truth Tables
Example 1. Let p and q be propositions. Construct the truth table for the compound
proposition (𝑝 → 𝑞) ∧ (𝑞 → 𝑝) .
Solution. Note that there are two propositions, 𝑝 and 𝑞 , 𝑝 𝑞
involved in the compound proposition. Thus, the truth table T T
will contain 4 rows, the first two columns of which are T F
F T
F F

𝑝 𝑞 (𝑝 → 𝑞) (𝑞 → 𝑝)
T T T T
T F F T
F T T F
F F T T
 44
Colegio de Los Baños – GENERAL MATHEMATICS

Using the truth table for the definition of the conditional statements (𝑝
→ 𝑞)and (𝑞 → 𝑝) , we add two more columns to indicate the truth
values of
𝑝 𝑞 (𝑝 → 𝑞) (𝑞 → 𝑝) (𝑝 → 𝑞) ∧ (𝑞 → 𝑝)
(𝑝 → 𝑞)and (𝑞 → 𝑝) :
T T T T T

T F F T F
In the final column, we add the truth value of (𝑝 → F T T F F
𝑞) ∧ (𝑞 → 𝑝), which is a conjunction involving
(𝑝 → 𝑞) and (𝑞 → 𝑝) as disjuncts. F F T T T

Connectives, Truth Tables.

Connectives are used for making

compound propositions. The main ones
are the following (p and q represent
given propositions):

The truth value of a compound proposition

depends only on the value of its
components. Writing F for
“false” and T for “true”, we can summarize
the meaning of the connectives in the
following way:

Note that ∨ represents a non-exclusive or, i.e., p ∨ q is true when any of p, q is true and also
when both are true. On the other hand represents an exclusive or, i.e., p q is true only
when exactly one of p and q is true.

Conditional Propositions
A proposition of the form “if p then q” or “p implies q”, represented “p → q” is called a conditional
proposition.
For instance: “if John is from Chicago then John is from Illinois”.
The proposition p is called hypothesis or antecedent, and the proposition q is the conclusion or
consequent. Note that p → q is true always except when p is true and q is false.
So, the following sentences are true: “if 2 < 4 then Paris is in France” (true → true), “if London is
in Denmark then 2 < 4” (false → true), “if 4 = 7 then London is in Denmark” (false → false).
However, the following one is false: “if 2 < 4 then London is in Denmark” (true → false).
In might seem strange that “p → q” is considered true when p is false, regardless of the truth
value of q. This will become clearer when we study predicates such as “if x is a multiple of 4 then
x is a multiple of 2”.
 45
Colegio de Los Baños – GENERAL MATHEMATICS

That implication is obviously true, although for the particular case x = 3 it becomes “if 3 is a
multiple of 4 then 3 is a multiple of 2”.
The proposition p ↔ q, read “p if and only if q”, is called biconditional. It is true precisely when p
and q have the same truth value, i.e., they are both true or both false.

Logical Equivalence
Note that the compound propositions p → q and p ∨ q have the same truth values:

When two compound propositions have the same truth values no

matter what truth value their constituent propositions have, they
are called logically equivalent. For instance p → q and p ∨ q are
logically equivalent, and we write it: p → q ≡ p ∨ q

Example: De Morgan’s Laws for Logic. The

following propositions are logically equivalent:

We can check it by examining their truth tables:

Example: The following propositions are logically

equivalent: p ↔ q ≡ (p → q) ∧ (q → p) Again, this
can be checked with the truth tables:

Converse, Contrapositive
• The converse of a conditional proposition p → q is the proposition q → p.
• As we have seen, the biconditional proposition is equivalent to the conjunction of a
conditional proposition an its converse. p ↔ q ≡ (p → q) ∧ (q → p)
• So, for instance, saying that “John is married if and only if he has a spouse” is the same as
saying “if John is married then he has a spouse” and “if he has a spouse then he is
married”.
• Note that the converse is not equivalent to the given conditional proposition, for instance “if
John is from
Chicago then John is from Illinois” is true, but the converse “if John is from Illinois then
John is from Chicago” may be false.
• The contrapositive of a conditional proposition p → q is the proposition q → p. They are
logically equivalent. For instance the contrapositive of “if John is from Chicago then John is
from Illinois” is “if John is not from Illinois then John is not from Chicago”.
 46
Colegio de Los Baños – GENERAL MATHEMATICS

Applications of Logic in Everyday Life

• Logic, on the other hand, may be defined as the science that evaluates arguments.
• All of us encounter arguments in our everyday life. We read arguments in books, magazines
and newspapers, hear them on television, and formulate them when communicating with
friends, parents, juniors and senior colleagues.
• The aim of logic therefore is to develop a system of methods and principles that we may use
as criteria for evaluating the arguments of others and as guides in constructing arguments of
our own.
• Among the benefits to be expected from the study of logic is an increase in confidence that
we are making sense when we criticize the arguments of others and when we advance
arguments of our own.
• An argument, as it occurs in logic, is a group of statements, one or more of which (the
premises) are claimed to provide support for, or reasons to believe, one of the others (the
conclusion).
• The purpose of logic, as the science that evaluates arguments, is thus to develop methods
and techniques that allow us to distinguish good arguments from bad.
 47

Colegio de Los Baños – GENERAL MATHEMATICS

WEEK 7 ANSWER SHEET (Please submit only the answers. Do not return the entire module.)

NAME: _________________________________________SECTION:
__________________________
Last Name, First Name Middle Initial SCORE: __________

Enabling Assessment Activity # 3 - Propositions

ENGAGEMENT

Identify the following statements if it is a proposition or not proposition, then state the reason why it
is a proposition and state why it is not.

_________1. The Philippines is a country. _________11. Are you stressed?

_________2. 2024 will be a leap year. _________12. What a bright sunny day!
_________3. Sun sets in the east. _________13. Siam is in Thailand.
_________4. P(x) : x + 6 = 7 _________14. I never said that, “I love you”.
_________5. P(4) : 4 + 6 = 2 _________15. I never lie.
_________6. Apples are oranges. _________16. Do not go there.
_________7. Grapes are black. _________17. This sentence is true.
_________8. Three and three makes 6. _________18. This sentence is false.
_________9. x < 10 _________19. It will rain tomorrow.
_________10. Close the door. _________20. Fan blade is rotating.

Problem Solving
Consider the following statements
a. Ticket is sufficient to enter a movie house
b. Ticket is necessary to enter a movie house

Which of the above statement is/are logically correct?

Prove your claims by constructing a TRUTH TABLE
 48
Colegio de Los Baños – GENERAL MATHEMATICS

PRE-REQUISITE ASSESSMENT: What is the difference between tautology and fallacy?

LESSON 14 METHODS OF PROOF

LEARNING MATERIALS: Module, pen, paper, internet (if applicable)
PRE-REQUISITE CONTENT KNOWLEDGE: Logic and propositions
PRE-REQUISITE SKILL: Presenting logics and truth tables

TIME ALLOTMENT: 4 HRS

CONSULTATION: For inquiries and clarifications regarding the lesson, you may contact
your teacher thru his/her FB Messenger

RUA: At the end of the lesson, you should be able to:

• determine the validity of categorical syllogisms.
• establish the validity and falsity of real-life arguments using logical propositions,
syllogisms, and fallacies.

INSTITUTIONAL VALUES: Critical thinking, problem solving skills

Students will be able to apply
a. Critical and Analytical thinking skills in determining if syllogisms are valid
b. Excellence in solving problems by validating arguments using propositions and
fallacies

OVERVIEW OF THE LESSON

This lesson is all about determining the validity of syllogisms, propositions, logics, and fallacies.

STUDENT’S EXPERIENTAL LEARNING

CHUNK 1: PROOFS
Basic Idea of Proofs. The goal of the proof is to show that the conclusion logically follows
from the given propositions (or premises).
As for the content of the proof, each proposition must be a valid assertion: they must be
based on a given statement (i.e. a premise), or they must follow from the premise via logical
equivalences or rules of inferences.

Example 1. Prove the validity of the following argument:

𝑝 → (𝑟 ∧ 𝑠)
~𝑟

∴ ~𝑝
Solution. Thinking process: We assume that all propositions over the line are true. From
these two propositions, the goal is to establish a logical sequence of propositions to arrive at
the conclusion ~𝑝.
A common strategy is to start with the statement not involving a conditional (i.e., start with
~𝑟). Now think, if ~𝑟 is true, how can we reach~𝑝?

To do that, we can use Modus Tollens on 𝑝 → (𝑟 ∧ 𝑠), but first we need to establish that ~(𝑟
∧ 𝑠)is true. Since ~𝑟 is true, then by the Rule of Addition, (~𝑟) ∨ (~𝑠)is true. It follows that ,
(~𝑟) ∨ (~𝑠) ⟺ ~(𝑟 ∧ 𝑠), by De Morgan’s Law. The actual proof is written as follows:
 49
Colegio de Los Baños – GENERAL MATHEMATICS

Proposition Reason
1 ~𝑟 Premise
2 (~𝑟) ∨ (~𝑠) (1), Rule of Addition
3 ~(𝑟 ∧ 𝑠) (2), De Morgan’s Law
4 𝑝 → (𝑟 ∧ 𝑠) Premise
5 ~𝑝

Types of Proofs. Suppose we wish to prove an implication 𝑝 → 𝑞 Here are some strategies
we have available to try.

Trivial Proof: If we know q is true then 𝑝 → 𝑞 is true regardless of the truth value of p.
Example: Prove the statement: If there are 100 students enrolled in this course this semester,
then 62 = 36.

Proof. The assertion is trivially true, since the conclusion is true, independent of the hypothesis
(which, may or may not be true depending on the enrollment).

Vacuous Proof: If p is a conjunction of other hypotheses and we know one or more of

these hypotheses is false, then p is false and so 𝑝 → 𝑞 is vacuously true regardless of the
truth value of q.
Example: Prove the statement. If 6 is a prime number, then 62 = 30.
Proof. The hypothesis is false, therefore the statement is vacuously true (even though the
conclusion is also false).

Direct Proof: Assume p, and then use the rules of inference, axioms, definitions, and
logical equivalences to prove q.

Example: Prove the statement: For all integers m and n, if m and n are odd integers, then
m + n is an even integer.

Proof. Assume m and n are arbitrary odd integers. Then m and n can be written in the form
m = 2a + 1 and n = 2b + 1; where a and b are also integers.
Then m + n = (2a + 1) + (2b + 1) (substitution)
= 2a + 2b + 2 (associative and commutative laws of addition)
= 2(a + b + 1) (distributive law)

Since m+n is twice another integer, namely, a+b+1, m+n is an even integer.

Indirect Proof or Proof by Contradiction: Assume 𝑝 and ~𝑞 and derive a contradiction r

∧ ~r.

Example:
Prove the statement is true: Let x and y be real numbers. If 5x + 25y = 1723, then x or y is
not an integer. Proof. Assume x and y are real numbers such that 5x+25y = 1723, and
assume that both x and y are integers. By the distributive law, 5(x + 5y) = 1723:
Since x and y are integers, this implies 1723 is divisible by 5. The integer 1723, however, is
clearly not divisible by 5. This contradiction establishes the result.
 50
Colegio de Los Baños – GENERAL MATHEMATICS

Proof by Contrapositive: (Special case of Proof by Contradiction.)

Give a direct proof of ~𝑞 → ~𝑝. Assume ~𝑞 and then use the rules of inference, axioms,
definitions, and logical equivalences to prove ~𝑝.(Can be thought of as a proof by
contradiction in which you assume 𝑝 and ~𝑞 and arrive at the contradiction 𝑝 ∧ ~𝑝.
Example:
Prove the statement: For all integers m and n, if the product of m and n is even, then m is
even or n is even.
We prove the contrapositive of the statement: If m and n are both odd integers, then mn is
odd.
Proof. Suppose that m and n are arbitrary odd integers.
Then m = 2a+1 and n = 2b + 1; where a and b are integers.
Then mn = (2a + 1)(2b + 1) (substitution)
= 4ab + 2a + 2b + 1 (associative, commutative, and distributive laws) = 2(2ab + a + b) + 1
(distributive law)
Since mn is twice an integer (namely, 2ab + a + b) plus 1, mn is odd.

Proof by Cases: If the hypothesis p can be separated into cases p1 ∨ p2∨…∨ pk, prove
each of the propositions, p1 →q, p2 → q, . . . , pk→q, separately.
(You may use different methods of proof for different cases.)
Example If 𝑥 is a real number such that 𝑥 2−1 > 0, then either 𝑥 > 1 𝑜𝑟 − 2 < 𝑥 < −1

𝑥+2

Proof. Assume 𝑥 is a real number for which the inequality 𝑥 2−1 > 0 holds
𝑥+2 holds. Factor the numerator
of the fraction to get the inequality

(𝑥 + 1)(𝑥 − 1)
>0
𝑥+2
For this combination of (𝑥 + 1); (𝑥 − 1), and 𝑥 + 2 to be positive, either all are positive
or two are negative and the other is positive. This gives four cases to consider:

Case 1. 𝑥 + 1> 0; 𝑥 − 1> 0, and 𝑥 + 2 > 0. In this case 𝑥 > −1, 𝑥 > 1 𝑎𝑛𝑑 𝑥 > −2 which
implies 𝑥 > 1.

Case 2. 𝑥 + 1> 0; 𝑥 − 1< 0, and 𝑥 + 2 < 0. In this case 𝑥 > −1, 𝑥 < 1 𝑎𝑛𝑑 𝑥 < −2, and there
is no x satisfying all three inequalities simultaneously.
Case 3. 𝑥 + 1< 0; 𝑥 − 1> 0, and 𝑥 + 2 < 0.. In this case 𝑥 < −1,𝑥 > 1 𝑎𝑛𝑑 𝑥 < −2, and there
is no x satisfying all three inequalities simultaneously.

Case 4. 𝑥 + 1< 0; 𝑥 − 1< 0, and 𝑥 + 2 > 0. In this case 𝑥 < −1, 𝑥 < 1 𝑎𝑛𝑑 𝑥 > −2, which
implies that −2 < 𝑥 < −1
Thus, either 𝑥 > 1 (Case 1) or −2 < 𝑥 < −1 (Case 4).
 51
Colegio de Los Baños – GENERAL MATHEMATICS

Some terminologies:
• Axioms: Statements that are always true.
Example: Given two distinct points, there is exactly one line that contains them.
• Definitions: Used to create new concepts in terms of existing ones
• Theorem: A proposition that has been proved to be true.
• Two kinds of theorems: Lemma and Corollary
Lemma: A theorem that is usually not too interesting in its own right but is useful in proving
another theorem.
Corollary: A theorem that follows quickly from another theorem

Inductive Reasoning VS. Deductive Reasoning

• Inductive reasoning: draw a conclusion based on experience
- You observe a number of cases in which whenever P is true, Q is also true. On the
basis of these experiences, you may formulate a conjecture: P→ Q
- The more cases you find where Q follows from P, the more confident you are in your
conjecture
- But no matter how reasonable the conjecture sounds, you will not be satisfied

• Deductive reasoning: verify the truth or falsity of a conjecture

- Either produce a proof for P → Q
- Or find a counterexample that disproves the conjecture, where P is true and Q is false
 52
Colegio de Los Baños – GENERAL MATHEMATICS

Name: _________________________________Section:________________________
Last Name, First name

Quarterly Assessment

Goal: The problem/challenge is to assist two customers: one wants to invest while
another one wants to apply for a loan. You have to provide the best option to the
customers.
Role: Financial Consultant

Audience: Customers

Situation: As a financial analyst you are to present bank products, or loan schemes
of government agencies (SSS, GSIS, Pag Ibig) and other private financial
institutions. It will also include requirements for loan applications, loan processing,
investing in stocks or bonds.
Product/Performance and Purpose: Loan structure profile and investment report to aid
Customer A and Customer B to make decisions on the products that best suit their
lifestyle.
Standards
The report will be evaluated according to the following criteria:
Mathematical Content (45%),
Persuasive Presentation (30%), and
Planning and Organization (25%)
 53
Colegio de Los Baños – GENERAL MATHEMATICS

For Customer A: Loan Structure Profile

Options: Requirements Interest Rate Advantages VS
Disadvantages
Bank: (Any Philippine Bank)

Government: SSS/ Pag

Ibig/ GSIS

YOUR
RECOMMENDATION
 54
Colegio de Los Baños – GENERAL MATHEMATICS

For Customer B: Investment Portfolio

Options: Requirements Interest Rate Advantages VS
Disadvantages
Time Deposit: (Any
Philippine Bank)

Stocks:

Bonds:

YOUR RECOMMENDATION

Name and Signature of Parent/ Guardian: ____________________________________