LESSON PLAN

I. OBJECTIVES: At the end of the lesson, the students are expected to:
*Solve problems involving business and consumer loans (amortization,
mortgage)

II. SUBJECT MATTER

TOPIC: BUSINESS AND CONSUMER LOANS (AMORTIZATION, MORTGAGE)
REFERENCE: https://math.la.asu.educ>-garcia; www.mathportal.org
MATERIALS: Calculator, manila paper, pentel pen

III. PROCEDURE
A. PRELIMENARY ACTIVITY
1. Prayer
2. Checking of attendance
B. Review (Business and consumer loans)
C. Motivation (games )
D. Presentation of the lesson
1. Activity
Direction: Group the students with five members. Give each group the strips of
problem. After 20 minutes, let the students to present their output in the class. Group 1
and 2 will answer problem 1, then group 3 and 4 will answer problem 2.
Group 1. What is the monthly payment on a mortgage of $12,000 with annual interest
rate of 5.5% that runs for 10 years.
Group 2. If a mortgage is amortized over 10 months at an interest rate of 9% and
monthly payments of ₱25.3, what is the original value of the mortgage?

2. Analysis
Guide Questions: 1. How did you find your activity? Did you enjoy?
2. What have you observed in all the outputs of your
classmates?
3. What are the steps in finding or creating an amortization
table?
3. Abstraction
Amortization- is a repayment of a loan in an equal periodic payment.
-refers to the process of paying off debt (often from a loan or
mortgage)
Steps in making amortization table:
Step 1. Determine monthly interest rate.
The formula for changing from an annual interest rate to a monthly one is:
Monthly rate = ( 1 + annual rate )1/2 – 1
Annual rate is 0.055
Monthly rate = ( 1 + 0.055)1/2 – 1
≈ 0.0044717

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 Step 2. Determine monthly payment

P .i
A= -n
1−(1+i)

where: A = monthly payment amount

P = loan payment
i = monthly interest rate
n = total no. of payments
Step 3. Create amortization Schedule
Monthly interest = Remaining balance x monthly interest
12000 x 0.0044717 = 53.6604
Subtract the interest from the first payment to see how much principal is paid with the first
payment.

129.44 – 53.6604 = 75.7796

Determine the new balance
New balance = 12000 – 75.7796 = 11924.2204

Amortization table
Month Payment Principal Paid Interest payment Remaining
Required Payment
0 12000
1 129.44 75.78 53.66 11924.22
2 129.44 76.12 5.32 11848.10

4. Application ( by Pair)

Problem: You want to take out a mortgage for ₱ 50000 with monthly payment at 4.5%, and you
can afford ₱ 550 per month payments. How long would you have to make payments to pay off
the mortgage?

IV. Assignment ( Assignment notebook)

Direction: Make an amortization table
Problem: What is the interest rate on a mortgage of ₱ 23000 with an ₱ 350 monthly payment
that runs for 10 years?

Prepared by:
JESELYN R. FERRER
LAMPARI NATIONAL HIGH SCHOOL
SOUTH COTABATO DIVISION

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