GENMATH_2Q t = term of time in years

W1: Interest
NOTES (for all lessons)!
★ Simple Interest ● Do not round off in solution.
➔ interest Round off only in the final
➔ computed on the principal answer part.
➔ interest remains constant throughout ● In getting the final answer, if
the term it is in decimal form, get the
★ Lender or creditor 2 decimal places only.
➔ person (or institution) who invests
the money or makes the funds
Examples:
available
1. Given: 𝑃 = ₱18, 500, 𝑟 = 0.03, 𝑡 = 5. Find simple
★ Borrower or debtor
interest.
➔ person (or institution) who owes the
● Formula: I= 𝑃rt
money or avails of the funds from the
● Solution: I = (₱18, 500)(0.03)(5)
lender
I = ₱2,775
★ Origin or loan date
➔ date on which money is received by
2. Given: 𝑃 = ₱20,000, 𝐼 = ₱4,000, 𝑡 = 4 . Find the
the borrower
rate.
★ Repayment date or maturity date
● Formula: r= I/Pt x 100
➔ date on which the money borrowed
● Solution: r = (₱4,000) / (₱20,000)(4) x 100
or loan is to be completely repaid
I = 5%
★ Time or term (t)
➔ amount of time (in years) the money
3. Given: 𝑃 = ₱40,000., 𝐼 = ₱700, 𝑟 = 7%. Find
is borrowed or invested
time.
➔ length of time between the origin
● Formula: t = I/Pr
and maturity dates
● Solution: t = (₱700) / (₱40,000)(0.07)
★ Principal (P)
I = 0.25 x 100 (since there’s no
➔ amount of money borrowed or
decimal when it comes to time)
invested on the origin date
I = 25
★ Rate (r)
➔ annual rate
4. To buy a computer, Raquel borrowed pesos
➔ charged by the lender
3,000 at 9% interest for 4 years. How much
➔ rate of increase of the investment
money did she have to pay back?
➔ %
● Given: 𝑃 = ₱3,000, 𝑟 = 0.09, 𝑡 = 4 years
★ Interest
● Formula: I= 𝑃rt
➔ amount paid or earned for the use of
● Solution: I = (₱3,000)(0.09)(4)
money
I = ₱1,080
★ Maturity value or future value (A)
➔ amount after (t) years that the
5. A total of pesos 1,200 is invested at a simple
lender receives from the borrower on
interest rate of 6% for 4 months. How much
the maturity date
interest is earned on this investment?
● Given: 𝑃 = ₱1,200, 𝑟 = 0.06, 𝑡 = ⅓ (convert to
The formula can be manipulated to obtain the
years: 4/12 = ⅓)
following relationships:
● Formula: I= 𝑃rt
● The formula for finding the simple interest
● Solution: I = (₱1,200)(0.06)(⅓)
➔ I= 𝑃rt
I = ₱24
● The formula for finding the principal amount
➔ P = I/rt
6. Brit opened a savings account that fetches
● The formula for finding the rate
him 4% interest. Brit estimates that
➔ r= I/Pt x 100
assuming he neither adds to nor withdraws
● The formula for finding the time/term
from his account, he will earn Pesos 300 in
➔ t = I/Pr
interest after 5 years. How much did Brit
deposit when he opened the account?
➢ Where:
● Given: I = ₱300, 𝑟 = 0.04, 𝑡 = 5
I = Simple Interest
● Formula: P = I/rt
P = Principal or amount invested or
● Solution: P = (₱300) / (0.04)(5)
borrowed
P = ₱1,500
r = simple interest rate
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 ● 2nd Formula: A = P + I
7. Teresa borrowed $120,000.00 from her uncle. GETTING THE I
If Teresa agreed to pay an 8% interest rate, ● Solution: I = Prt
calculate the amount of interest she needs I = (₱13,200)(0.1)(1)
to pay if the loan period is: I = 1,320
a.) 1 year GETTING THE A
● Given: I =$120,000.00, 𝑟 = 0.08, 𝑡 = 1 ● Solution: A = P + I
● Formula: I= 𝑃rt A = ₱13,200 + 1,320
● Solution: I = ($120,000.00)(0.08)(1) A = ₱14,520
I = ₱9,600
★ Compound Interest
b.) 9 months ➔ interest computed on the principal
● Given: I =$120,000.00, 𝑟 = 0.08, 𝑡 = ¾ (9/12 = and also on the accumulated past
¾) interest
● Formula: I= 𝑃rt ➔ way to earn money because you
● Solution: I = ($120,000.00)(0.08)(¾) don’t just earn using your original
I = ₱7,200 money, but also the interest you
earned
c.) 18 months Formulas:
● Given: I =$120,000.00, 𝑟 = 0.08, 𝑡 = 1 ½ (18/12 = ● A = P (1+r)^t
1 ½) ● I=A-P
● Formula: I= 𝑃rt
● Solution: I = ($120,000.00)(0.08)(1 ½) ➢ where:
I = ₱14,400 A = maturity (future) value
P = principal or present value
★ Maturity value or future value (A) r = interest rate
Formulas: t = term or time in years
● A = 𝑃 (1 + 𝑟t)
● A=P+I Examples:
1. Given: P= ₱18,500, r = 0.03 and compounded
Examples: annually for 3 years, find the maturity value
1. Given: 𝑃 = ₱15,000, 𝑡 = ⅓, 𝑟 = 0.02. Find (A) and the compound interest.
maturity/future value (A). ● Formula: A = P (1+r)^t
● 1st Formula: A = 𝑃 (1 + 𝑟t) ● Solution: A = ₱18,500 (1 + 0.03)^3
● Solution: A = ₱15,000 [1 + (0.02)(⅓)] A = ₱20,215.45
A = ₱15,000 (1.006666667) ● Checking: I = A - P
I = ₱15,100 I = ₱20,215.45 - ₱18,500
I = ₱1,715.45
● 2nd Formula: A = P + I =A-I
GETTING THE I = ₱20,215.45 - ₱1,715.45
● Solution : I = Prt = ₱18,500 (same w/ the amount
I = (₱15,000)(0.02)(⅓) of P in the given)
I = 100
GETTING THE A 2. Given: P= ₱20,500, r = 4.5% and
● Solution: A = P + I compounded annually for 5 years, find the
A = ₱15,000 + 100 maturity value (A) and the compound
A = ₱15,100 (same answer w/ the interest.
answer from the 1st solution) ● Formula: A = P (1+r)^t
● Solution: A = ₱20,500 (1 + 0.045)^5
2. Johny invested in a bank that offers an A = ₱25,546.73
interest rate of 10% per year. If he earned an ● Checking: I = A - P
interest of ₱13, 200 after a year, how much I = ₱25,546.73 - ₱20,500
was Johnny's investment? I = ₱5046.73
● Given: 𝑃 = ₱13,200, 𝑡 = 1, 𝑟 = 0.1 =A-I
● 1st Formula: A = 𝑃 (1 + 𝑟t) = ₱25,546.73 - ₱5046.73
● Solution: A = ₱13,200 [1 + (0.1)(1)] = ₱20,500 (same w/ the amount
A = ₱15,000 (1.1) of P in the given)
I = ₱14,520
★ Compounded Interest

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 Compounded more than once a year ➔ Time between the 1st payment
Annually n=1 interval and the last payment
interval
Semi-annually n=2 ★ Regular or Periodic Payment (R)
➔ Amount of each payment
Quarterly n=4 ★ Amount (Future Value) of an annuity (F)
➔ Sum of future value of all the
Monthly n = 12 payments to be made during the
Daily n = 365 entire term of the annuity
★ Present Value of an annuity (P)
➔ Sum of present value of all the
Formula: payments to be made during the
● A = P (1+r/n)^nt entire term of the annuity\

Examples: SIMPLE ANNUITY

1. Suppose you invest 50, 000 at a 15% interest ★ Future Value
rate, compounded semi-annually. Formulas:
Determine the future value of your
investment after 3 years.
● Given: P =50,000, 𝑟 = 0.15, 𝑡 =3, n = 2
● Formula: A = P (1+r/n)^nt
● Solution: A = 50,000 (1 + 0.15 / 2)^(2)(3)
A = 50,000 (1.075)^6
A = 50,000 (1.5433015256)
A = 7,7165.08
Examples:
2. If Mohan deposits Php 4000 into an account
1. Suppose Mrs. Manda would like to deposit
paying 6% annual interest compounded
P3,000 every month in a fund that gives 9%,
quarterly, and then the money will be in his
compounded monthly. How much is the
account after five years.
amount of future value of her savings after 6
● Given: P =₱4,000, 𝑟 = 0.06, 𝑡 =5, n = 4
months?
● Formula: A = P (1+r/n)^nt
● Solution: A = ₱4,000 (1 + 0.06 / 4)^(4)(5)
A = ₱4,000 (1.015)^20
A = ₱4,000 ( 1.3468550066)
A = ₱5387.42

W2: Simple and General Annuity

★ Annuity: sequence of equal payments (or
deposits) made at a regular interval of time

2. To start a business, Jake wants to save a

certain amount of money at the end of
every month to put in an account providing
★ Term of an Annuity (t) 2% interest compounded monthly. His
estimated start-up capital is P150,000. If he
wants to start a business in 1.5 years, how
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 much monthly deposit must he put into the annually. How much withdrawal can be
account? made at the end of each year so that the
fund will have zero balance at the end of 12
years?

★ Present Value
Formulas: GENERAL ANNUITY
● General Ordinary Annuity
➔ Periodic payment is made at the end
of the payment interval
★ Future Value
Formula:

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

2. A certain fund currently has P100,000 and is

invested at 3% interest compounded

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 2. Ken borrowed an amount of money from FORMULAS TO GET THE FF:
Kat. He agrees to pay the principal plus ● To get I -> I = r/m
interest by paying P38, 973.76 each year for ● To get n -> (t)(m)
3 years. How much money did he borrow if
the interest is 8% compounded quarterly? ★ Present value
Formula:

➢ Where:
P = periodic payment
i = rate per conversion period
n = number of paying period
d = number of deferred periods

Examples:
1. Emma availed of a cash loan that gave her
an option to pay P10,000 monthly for 1 year.
The first payment is due after 6 months. How
much is the value of cash loan if the interest
rate is 12 % compounded monthly?

★ Present Value
Formula:

W3: Deferred Annuity

★ Deferred Annuity
➔ Payment scheme
➔ Not made at the beginning nor at the
end
➔ Made some later date
➔ E.g. (in real life) A credit card
company offering its client to
purchase today but to start paying ★ Future Value
monthly with their choice of term Formula:
after 3 months.
★ Period of Deferral (d)
➔ Time between the purchase of an
annuity and the start of the
payments for deferred annuity
W4: Stocks
TIME DIAGRAM:
★ Stocks
➔ Shares in the ownership of the
company
● Owners of stocks: may be part
owners of the company
➔ 2 types of stocks: (both will receive
dividends or share of earnings of the
company)
a. Common stock

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 b. Preferred stock
● Dividends: share of earnings; paid
first to preferred shareholders
● Market value: stocks brought or sold
at their current price
➔ When a person buys some shares,
the person receives a certificate with
the corporation name, owner name,
number of shares and par value per
share.

STOCK CERTIFICATE

DEFINITION OF TERMS (RELATED TO STOCKS)

Stock ➔ Share in the ownership of a

company

Dividend ➔ Share in the company's

profit

Dividend ➔ Ratio of the dividends to the

Per Share number of shares

Stock ➔ A place where stocks can be

Market bought or sold.
➔ The stock market in the
Philippines is governed by
the Philippine Stock
Exchange (PSE).

Market ➔ Current price of a stock at

Value which it can be sold

Stock ➔ A.k.a current stock yield

Yield Ratio ➔ Ratio of the annual dividend
per share and the market
value per share

Par Value ➔ Per share amount as stated ★ Bonds

on the company certificate
➔ Unlike market value, it is ➔ Interest-bearing security
determined by the company ➔ Promises to pay the amount of
and remains stable over money on a certain maturity date as
time.
stated in the bond certificate
● Bondholders
Examples: ➔ Lenders (to a government or
1. A certain financial institution declared a private institution)
₱30,000,000 dividend for the common ➔ do not vote in the institution's
stocks. If there are a total of 700,000 shares annual meeting but the first
of common stock, how much is the dividend to claim in the institution's
per share? earnings.
➔ Some bond issuers are the following:
a. National government
b. Government agencies

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 c. Government-owned and Bond redeemable as stated in the
controlled corporations bond certificate
d. Non-bank corporations ➔ number of years from the
e. Banks and multilateral time of purchase to maturity
date
agencies.
➔ On the maturity date, the Fair Price ➔ present value of all cash
bondholders will receive the face of a Bond inflows to the bondholder
amount of the bond. Aside from the
face amount due on the maturity Examples:
date, the bondholders may receive 1. Determine the amount of the semi-annual
coupons (payments/interests), coupon for a bond with a face value of
usually done semi-annually, ₱300,000 that pays 10%, payable
depending on the coupon rate semi-annually for its coupons.
stated in the bond certificate.

BOND CERTIFICATE

2. Suppose that a bond has a face value of

₱100,000 and its maturity date is 10 years
DEFINITION OF TERMS (RELATED TO BONDS) from now. The coupon rate is 5% payable
semi-annually. Find the fair price of this
Bond ➔ interest-bearing security
which promises to pay bond, assuming that the annual market rate
a. a stated amount of is 4%.
money on the
maturity date
b. regular interest
payments (coupons)
➔

Coupon ➔ periodic interest payment

that the bondholder receives
during the time between
purchase date and maturity
date
➔ usually received
semi-annually

Coupon ➔ rate per coupon payment

Rate period
➔ denoted by r

Price of a ➔ price of the bond at

Bond purchase time
➔ denoted by P

Par Value ➔ amount payable on the

or Face maturity date
Value ➔ 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.
STOCKS VS BONDS
Term (or ➔ fixed period of time (in
Tenor) of a years) at which the bond is Basis for Stocks Bonds

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compariso ★ Loan
n ➔ Debt provided by one entity (an
individual or an organization) to
Form of equity Form of debt another entity at an agreed interest
financing or financing or rate
raising money raising money by
by allowing borrowing from ➔ E.g. Personal loans, mortgages,
investors to be investors. government bonds, and bank loans
part owners of are examples of loans
the company
● Business Loans
Prices vary every Investors are ➔ For business purposes
day; reported in guaranteed ➔ E.g. Bank loans to start or
various media interest expand a business and to buy
(newspaper, TV, payments and a
internet, etc) return of their equipments for the business
Meaning money at the ● Consumer Loans
maturity date. ➔ For personal or family
Can earn if the Investors still purposes
stock prices need to consider ➔ E.g. Educational loans, bank
increase, but the loans for personal purposes
they can lose borrower’s credit such as gadgets, tuition fees,
money if the rating. Bonds
stock prices issued by the cars, and housing loans
decrease or government
worse if the pose less risk ★ Outstanding Balance
company goes than those by
bankrupt. companies ➔ Amount that is left to be repaid on
because the any loan
government has
guaranteed
funding (taxes) ★ Perspective Method
from which it can ➔ Used when all regular payments are
pay its loans. equal
Issuers Corporate Government ➔ Calculates the outstanding balance
Institutions, as a present value of all future
Financial payments to be made
Institutions, ➔ FORMULA:
Companies etc.

Status of Shareholders Bondholders

Holders owners of the lenders to the
company company

Form of Profits earned by Interest

Returns the company payments are
are paid in the made in the form
form of of Coupon
Dividends Payments.

Risk Level Higher risk but Lower risk but

with the lower yield.
possibility of
higher returns.

Can be Can be
appropriate if appropriate for
the investment retirees (because
is for the long of the
term (10 years or guaranteed fixed
more). This can income) or for
allow investors those who need
to wait for stock the money soon
prices to (because they
increase if ever cannot afford to ★ Retrospective Method
they go low take a chance at ➔ Used if there is an irregular payment;
the stock that is, the final payment is not equal
market).
to the regular payment
➔ Calculates the loan balance as the
accumulated value of the loan at a
W5: Loans particular date minus the future

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 value of the regular payments made ➔ Claims a given proposition (called
at a particular date the antecedent) that entails another
➔ Cimputes the future value and is proposition (called the consequent)
used when nt is not known. ➔ A.k.a conditional proposition
➔ E.g.
Implication: If today is Tuesday, then
tomorrow is Wednesday.
Antecedent: Today is Tuesday.
Consequent: Tomorrow is
Wednesday.
W6: Proposition: Logical Operators ★ Biconditional Proposition
➔ Conjunction of two implications
★ Propositions
formed by exchanging their
➔ Statements that express a belief,
antecedents and consequents
opinion, or knowledge
➔ E.g.
➔ Declarative sentence that is either
Implication 1: If x = 1, then x + 1 = 2.
true or false but not both
Implication 2: If x + 1 = 2, then x = 1
➔ has exactly one truth value: true,
Biconditional: If x = 1 if and only if x +
which we denote by T; or false, which
1 =2 (to remove redundancy).
we denote by F.
★ Propositional Form
➔ Expression involving propositional
★ Simple Proposition
variables and logical connectives
➔ Expresses a single thought
➔ E.g.
➔ Not composed of any other
Proposition: 7 is a prime number,
propositions
and 3 is an odd number.
➔ Has one subject and one predicate
Let p be “7 is a prime number.”
➔ E.g. The sky is blue.
Let q be “3 is an odd number.”
★ Negation
Propositional form: p ^ q
➔ Denies the truth of the given
★ Propositional Variables
proposition
➔ Variables that represent propositions
➔ The negation statement is false
➔ Just as letters are used to denote
whenever the given statement is
numerical variables
true, and true whenever the given
➔ P, q, r, s, and so on
statement is false.
➔ Inserting the word “not”
★ Compound Proposition
➔ 2 or more simple propositions
➔ Put together using the logical
connective words (such as, and, or,
if)
➔ E.g. If today is Tuesday, then
tomorrow is Wednesday.
★ Conjunction
➔ Combines 2 propositions (called
conjuncts) w/ the word “and”
➔ E.g.
Proposition 1: 7 is a prime number.
Proposition 2: 3 is an odd number.
Conjunction: 7 is a prime number,
and 3 is an odd number. W7: Truth Values of Propositions
★ Disjunction
➔ Combines 2 propositions (called ★ Truth Value
disjuncts) w/ the word “or” ➔ Truthfulness of a proposition
➔ E.g. ➔ Either true or false
Proposition 1: 7 is a prime number. ➔ Tabular form
Proposition 2: 3 is an odd number. ★ Truth Table
Conjunction: 7 is a prime number, or ➔ Table
3 is an odd number. ➔ Shows complete possible truth
★ Implication values of a proposition

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 EXAMPLE 2
Proposition p
● (𝑝 → 𝑞) → ((~𝑝) ∨ 𝑞)

Proposition p
and q

TAUTOLOGY

Proposition Tautology All TRUE

p, q, and r
Contradiction All FALSE

Contingency Mix of
TRUE & FALSE

EXAMPLE 1
Given the statement “A diabetic either takes
conventional drugs, natural medicine or both”,
determine the truth value of 𝑝 ∨ (~𝑞 ∧ 𝑟) in each
scenario.
● Let p: A diabetic takes conventional drugs.
● Let q: A diabetic takes natural medicine.
And;
● Let r: A diabetic takes both conventional and
natural medicines.
➔ Scenario 1: Patient A only eats leaves of his
insulin plant to control his sugar level.

➔ Scenario 2: Patient B consults his doctor and

buys diligently the prescribed conventional
drugs.

➔ Scenario 3: Patient C supplements

conventional drugs with natural medicine
he reads is effective as well for diabetics.

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