Formulas

GENERAL MATHEMATICS
REVIEWER S1-Q2 Future value of
simple ordinary
Present value of
simple ordinary
Periodic
payment of R of
Annuity - a sequence of payments made at equal (fixed annuity, F annuity, P an annuity
intervals or periods of time).
n
(1+i) −1 1−( 1+ ⅈ )
−n
F
F=R P=R R=
i ⅈ ( 1+ ⅈ )n−1
Simple Annuity - the payment interval is also the same
r ⅈ
as the interest period. F = future value Where: ⅈ =
m
R = periodic P
General Annuity - refers to an annuity where the length R=
payment P = present value −n
of the payment interval is not the same as the length of i = interest rate 1−( 1+ ⅈ )
the interest compounding period. R = periodic
per period payment ⅈ
(𝑖=𝑟/𝑚) i = interest rate
Annuity Payment - the payment for each period is fixed
m = number of per period
and the compound interest rate is fixed over a specified
conversion (𝑖=𝑟/𝑚)
time. period in a year m = number of
Annuities - accounts associated with streams of annuity n = total number conversion period
of conversion in a year
payments.
periods (n=tm) n = total number
Regular / Periodic Payment (R) - each payment in an of conversion
annuity. periods (n=tm)

Payment Interval - the time between the successive
payments dates of an annuity.
Future Value or Amount of an Annuity (F) - the sum of
the future values of all the payments to be made during
the entire term of the annuity.
Present Value of an Annuity (P) - The sum of the
present values of all payments to be made during the
entire term of the annuity.
Examples of Annuity
Cash value or Cash price (CV) – equal to the down
payment (if there is any) plus the recent value of the
installment payments.
Fair Market value (FMV) of the cash flow – the price of
an asset can be sold in the open market when certain
conditions are met.
Cash flow – refers to the payments received (cash
inflows) or payments or deposits made (cash outflows).

• Rental payment • Monthly pensions • Monthly - Cash inflows - can be represented by

payment for car loan • Educational plan positive numbers.
- Cash outflows - can be represented by
Classifications of Annuities
negative numbers.
Annuity
According to the Simple Annuity General Annuity DEFERRED ANNUITY
payment interval
and interest period
Annuity – it is a sequence of equal payment (or
According to the Ordinary Annuity Due
payment deposits) made at a regular interval of time.
Annuity (or
Annuity
Immediate) Deferred annuities – are series of payments that will
According to Annuity Certain Contingent start on a later date.
duration Annuity - is an annuity that does not begin until a
given time interval has passed.
SIMPLE ANNUITY - payment interval = interest period
GENERAL ANNUITY - payment interval ≠ interest period Period of deferral – is the time between the purchase of
ORDINARY ANNUITY – due at the end an annuity and the start of the payments for the
ANNUITY DUE – due at the beginning deferred annuity.
Simple interest - is the interest charged on the principal
alone for the entire duration or period t of the loan or
investment, at a particular rate r.
Compound amount (F) – also called maturity value, it is
an accumulated amount obtained by adding the
principal and the compound interest.
Conversion period (m) – the number of times in a year
the interest will be compounded.
The following are the common conversion
periods in a year:
annually : m=1
semi-annually : m=2
quarterly : m=4
monthly : m = 12
Number of conversion periods (n) – the total number of
times interest is calculated for the entire term of the
investment or loan.
Annual interest rate or nominal rate (r) – the stated
rate of interest per year.
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.
Term (or Tenor) 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

Periodic rate (i) – the interest rate per conversion Fair Price of a Bond – present value of all cash inflows to
period. the bondholder
Present value of F (P) – this is the principal P, that will where:
accumulate to F if there is an interest at periodic rate i ࡵࢉ − compound interest
for n conversion periods. ࡼ − present value of F
࢘ − annual interest rate
࢚− time (per year)
Compound interest (Ic) - is usually used by banks in ࡲ − compound amount or maturity value
࢓ − conversion period
calculating interest for long-term investments and loans annually : m=1
such as savings account and time deposits. semi-annually : m=2
quarterly : m=4
monthly : m = 12
Stocks – share in the ownership of a company. ࢔ − total number of conversion periods (݊ = ݉ &‫ݐ‬
)

Dividend – share in the company’s profit. DIFFERENCE OF STOCKS AND BONDS

Dividend per share – ratio of the dividends to the STOCKS BONDS

number of shares Form of equity financing or
raising money by allowing
Stock Market – a place where stocks can be bought or investors to be part owners
sold. of the company;
Stock prices vary every day.
Market Value – the current price of a stock at which it
can be sold.
Investing in stocks involves
Stock Yield Ratio – ratio of the annual dividend per some uncertainty
share and the market value
per share. Higher risk but with
possibility of higher returns
Par Value – the per share amount as stated on the Can be appropriate if the
company certificate. investment is for the long
Form of debt financing; or
raising money by borrowing
from investors
Investors are guaranteed
interest payments and a
return of their money at the
maturity date
Uncertainty comes from the
ability of the bond issuer to
pay the bondholders.
Lower risk but lower yield
Can be appropriate for
retirees (because of
 term (10 years or more) guaranteed fixed income) or
for those who need money
soon (because they cannot
afford to take a chance at
the stock market)
Lender or creditor – person (or institution) who invests
the money or makes the funds available.
Borrower or debtor – person (or institution) who owes
the money or avails of the funds from the lender.
Origin or loan date – date on which money is received
by the borrower.
Repayment date or maturity date – date on which the
money borrowed or loaned is to be completely repaid.
Time or term (t) – amount of time in years the money is
borrowed or invested; length of time between the origin
and maturity dates.
Principal or present value (P) – amount of money
borrowed or invested on the origin date.
Rate of interest or simply rate (r) – annual rate, usually
in percent, charged by the lender, or rate of increase of
the investment.
Interest (I) – amount paid or earned for the use of
money.
Maturity Value or Future Value (F) – amount after t
years that the lender receives from the borrower on the
maturity date; equal to the sum of principal and the
interest earned.
Stock market or stock market index – is the measure of
value of a section of the stock market and is computed
from the price of selected stocks
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
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
Proposition – a declarative sentence that is either true
or false, but never both.
Notation: Variables are used to represent propositions.
The most common variables used are p, q, and r. If a
proposition is true, then its truth value is true, which is
denoted by T; otherwise, its true value is false, which is
denoted by F.
Simple Proposition – a proposition that conveys one
thought with no connecting words.
Compound Proposition – contains two or more simple
propositions that are put together using connective
words.
- Simple proposition can be combined to
form compound propositions by using
logical connectives or simply, connectives.
Words such as and, or, nor and if… then are
example of connectives.
BASIC LOGICAL CONNECTORS
CONJUNCTION – if two simple propositions are
connected by the word “and”
- “p and q”
- Symbolic form: “p ∧ q”
DISJUNCTION – if two simple propositions are
connected by the word “or”
- “p or q”
- Symbolic form: “p ∨ q”
CONDITIONAL – if two simple propositions are joined by
connectivity ‘if then’
- “if p then q”
- Symbolic form: “p → q”
BICONDITIONAL – if two propositions are connected by
the connective “If and only if”
- “p iff q”
- Symbolic form: “p ⇔ q”
NEGATION – an assertion that if a statement fails, or
denial of a statement
 - “not p” “it will only be true if both values are true or false, and if
- Can use/read as “it is not the case that” or the q value is true”
“it is false that” P q p→q
- Symbolic form: “~p” T T F
T F T
F T T
connective symbol Type of F F F
statement BICONDITIONAL
And ∧ conjunction “it will only be true if both values are true or false”
or ∨ disjunction
not ~ negation p q p⇔q
If … then → conditional T T T
If and only if ⇔ biconditional T F F
(iff) F T F
F F T
Commas – indicates which statements are grouped
together NEGATION
“it will just change the value of the given”
Parentheses – in symbolic statements are used to tell
what type of statements are being considered p ~p
- If there are no parentheses, we follow the T F
dominance of connectives (everything F T
except negation is first)
Truth table – displays the relationship between the EXAMPLES (for fun)
possible truth values of the propositions
p: Jupiter is a planet.
CONJUNCTION q: The Philippines is an archipelago.
“it will only be true if both of values are true”
p q p∧q (i) p∧q: Jupiter is a planet, and the Philippines
T T T is an archipelago.
T F F
F T F (ii) p∨q: Jupiter is a planet, or the Philipines
F F F is an archipelago.

DISJUNCTION (iii) p→q: If Jupiter is a planet, then the

Default: “it will only be false if both values are false” Philippines is an archipelago.
p q p∨q
T T T (iv) p⇔q: Jupiter is a planet if and only if the
T F T Philippines is an archipelago.
F T T
F F F (v) ~p: Jupiter is not a planet.

If stated otherwise: “it will only be true if one value is (vi) p→~q: Jupiter is a planet if and only if the
true and the other is false” Philippines is not an archipelago.
p q p∨q
T T F (vii) ~p→q: Jupiter is not a planet if and only if
T F T the Philippines is not an archipelago.
F T T
F F F (viii) ~(p∧q): Jupiter is not a planet, and the
Philippines is not an archipelago.
CONDITIONAL
(ix) ~ p⇔q: If Jupiter is not a planet, then the
Philippines is an archipelago.