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Gen Math Reviewer

Uploaded by

thesecond2ndacc0
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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DEFINITION OF TERMS

SIMPLE INTEREST –
- interest is computed on the principal and then added to it
- It is calculated only on the principal
- it remains constant throughout the investment term

COMPOUND INTEREST –
- is calculated on both the principal and accumulated
interest.
- In compound interest, the interest from the previous year
also earns interest.
DEFINITION OF TERMS

LENDER OR CREDITOR
- person (or institution) who invests the money or makes the
funds available funds from the lender

PRINCIPAL (P)
- amount of money borrowed or invested on the origin date

Maturity value or Future Value (F) – amount after t years that the
lender receives from the borrower on the maturity date.

Rate (r) – annual rate, usually in percent, charged by the lender, or


rate of increase of the investment
Formula for simple interest: I = 𝑃𝑟t
Example:. Given P = ₱15,250, r = 3.25%, and t = 3 years
Answer: ________?

Maturity value of simple interest


F=P+I
Example:
If an investment of ₱45,000 earned an interest of ₱3,500, what will be the
maturity value?
Answer: ____________?

Maturity value for compounding more than once a year


FORMULA: 𝑭 = 𝑷(𝟏 + 𝒋)𝒏
Example:
Patrick has ₱100,000.00 to invest at 11.11% compounded monthly, how much is
the maturity value of his investment in 4 years?
Answer: ₱155,636.88
Carlo is planning to invest ₱150,000.00. Mendoza’s Rural
Bank is offering 1.15% compounded semi – annually, while
Cueto’s Cooperative Bank offers 1.25% compounded
monthly. How much will be the maturity value after 5 years
if he invests from Mendoza’s Bank?

Use the formula 𝑭 = 𝑷(𝟏 + 𝒋)𝒏


ORDINARY ANNUITY
- Is the term for an annuity where payments are made at the end of
each period
GENERAL ANNUITY
- annuity where the length of the payment interval is NOT the same as
the length of the interest compounding period
EXAMPLE of General Annuity
- Your teacher saves ₱5,000 every 6 months in a bank that pays 0.25%
compounded monthly.

SIMPLE ANNUITY
- simple annuity has a payment interval that is equal to the interest
compounding period, while a general annuity does not.
EXAMPLE OF SIMPLE ANNUITY
- A college educational plan earns 4% compounded quarterly and
payments are made quarterly.
SIMPLE ANNUITY
Suppose Mr. Villa would like to save ₱ 2,500 every month in a fund that earns
6% compounded monthly. What is the future value of his savings after 9
months?
A. ₱ 29,552.89 B. ₱ 25,592.92 C. ₱ 22,955.29 D. ₱19,295.59

Given: R = Php 2,500


t = 9 months
im = 6% or 0.06
m = 12
𝟗
n = 𝟏𝟐 𝒙 𝟏𝟐 = 𝟗
𝟎.𝟎𝟔
j= 𝟏𝟐

FORMULA: (𝟏+𝒋)𝒏 −𝟏
𝑭=𝑹 𝒋
SIMPLE ANNUITY

Mrs. Dimagiba would like to buy a refrigerator payable for 6 months, with
payments starting at the end of each month. What is the cost of the
refrigerator if her monthly payment is ₱3,500 and the
interest rate is 7% compounded monthly?
A. ₱ 20,577.83 B. ₱ 20,943.24 C. ₱21,308.64 D. ₱ 21,674.05

Given: R = Php 3,500


t = 6 months
im = 7% or 0.07
m = 12
𝟔
n = 𝒙 𝟏𝟐 = 𝟔
𝟏𝟐
𝟎.𝟎𝟕
j= 𝟏𝟐

FORMULA: 𝟏−(𝟏+𝒋)−𝒏
𝑷=𝑹 𝒋
FAIR MARKET VALUE
Mr. Rivera is considering purchasing a car with an
installment plan. He will make an initial down payment of
₱20,000 and will receive monthly payments of ₱4,000 for
the next 5 years. The interest
rate is 6% compounded monthly.
1. What is the present value of this cash flow stream?
𝟏−(𝟏+𝒋)−𝒏
Formula: 𝑷 = 𝑹 𝒋
ANSWER: ₱ 206,902.24

2. What is the fair market value of this cash flow stream?


Use the formula: FMV = P + Down payment
DEFERRED ANNUITY
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 payment of ₱ 4,000.00 for two
years. The payment will start at the end of 3 months.
What is the period of deferral?
DEFERRED ANNUITY
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 payment of ₱ 4,000.00 for two
years. The payment will start at the end of 3 months. If it
is 10% compounded monthly, what is the present value of
the deferred annuity?

Use the formula:


STOCKS
✓ Stocks represent ownership in a company,
✓ Stocks: Dividends;

BONDS
✓ bonds represent a loan made to a company or
government.
✓ Bonds: Coupon

Philippines Stock Exchange


✓ the government agency that protects and maintains
the integrity of the capital market, including the
stock market
Sector indices
Indices
PSEi
ALL SHARES
FINANCIALS
INDUSTRIAL
HOLDING HANDS
SERVICES
MINING AND OIL
PROPERTY
INDEX VAL CHG %CHG
PSEi 9, 754.66 85.22 0.87
INDUSTRIAL 1,346.78 -37.43 -2.78
HOLDING FIRMS 7,291.34 78.92 1.08
MINING AND OIL 12, 675.59 126.03 .99
FINANCIAL 3,061.85 -59.61 -1.95

Refer to the table.


What was the stock value of Mining and Oil company yesterday?
ANSWER: 12, 549.56
SOLUTION
Value of mining and oil = VAL-Chg
Value of mining and oil = 12, 675.59 - 126.03
Value of mining and oil = 12, 549.56
COLLATERAL
✓ term refers to assets, such as real estate or other
investments, used to secure a loan
CONSUMER LOAN
✓ It is money lent to an individual for personal or family
purposes.
BUSINESS LOAN
✓ The business loan has higher interest than a consumer loan.
EXAMPLE OF BUSINESS LOAN
Mr. Lim wants to open another branch for his cellphone repair
shop. He decides to apply for a loan to cover the rental costs of
the new branch

“The business loan has higher interest than a consumer loan.”


Business loan and
consumer loan

Downpayment = original price X rate


Mortage amount = original price - downpayment
EXAMPLE:
A car dealer offers Ms. Garcia a brand-new car worth
₱820,000.00 with a 10% down payment. How much would be the
down payment? How much would be the mortgaged amount?

DOWN PAYMENT = 820,000.00 X 0.10


= ₱ 82, 000.00
MORTGAGED = 820,000 – 82, 000
= ₱738,000.00
PROPOSITION
➢A sentence that is either true or false, but not both

PROPOSITION’S TRUTH VALUE


➢A true proposition has a truth value of “true,” while a false one has
“false.”

SIMPLE PROPOSITION
➢DOES NOT Joins multiple propositions with logical connectors
EXAMPLE: The sun is shining.

COMPOUND PROPOSITION
➢A compound proposition joins multiple propositions with logical
connectors
In the statement, “If 3 + 3 = 9, then 33 = 6.”, what is
the truth value of the given conditional statement?
Answer: p → q is true

Converse and inverse


❖ It is logically equivalents
Tautology
❖ It is a compound statement that is always true.
Fallacy
❖ It is a statement that is always false.
Let p and q be the propositions:
p: Angels exist.; q: π > 3.
Express the following conjunctions in English
sentences or in symbols, as the case may be.
1. p ∨ q
Answer: Angels exist or π > 3.
2. “Angels do not exist and π ≤ 3.”
Answer: (~p) ^ (~q)
Determine the form of the categorical syllogism:

All competent teachers are experienced teachers.


Some competent teachers are efficient teachers.
Therefore, some experienced teachers are not
efficient teachers.
answer: IAO-3
Which fallacy is manifested in this argument “If Neth
cooks, then she has something to eat. Therefore, if
Neth has something to eat, then she cooked.”?

Answer : Fallacy of the consequent

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