Dear Heavenly Father, Thank You for the gift of life.

We grateful for Your abundant

grace and mercy. Thank You for watching over us and out family throughout the
night and blessing us with divine health to go through this beautiful day. Father, I
commit our lives, and this day into Your hands. I ask that you lead and guide us by
Your Spirit in every step along the way, Your wisdom to make the right choices and
decisions that will bring glory and honor to your Holy name. As we step out we do
so in faith hoping and believing for the best. May doors of opportunities be opened
to us And may we meet people of our destinies according to your will.I declare
we're protected on every side and kept by the power of God. No evil shall befall us.
Our going out and our coming in is blessed. I declare that all our expectations for
this day have been exceeded. I pray that we will also be a blessing in the life of
those we come incontact with this day. Thank you Father for the answered prayer,
and makingthis day a glorious one for us, in Jesus' Name, we pray, Amen
SOLVING PROBLEMS
ON BUSINESS &
CONSUMER LOANS
(AMORTIZATION AND
MORTGAGE)
 OBJECTIVE:

>Solve problems on business and

consumer loans amortization and
mortgage).
DEFINITION OF TERMS
> Amortization Method – method of paying a loan (principal and
interest) on installments 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 like CAR and a house and LOT.
> Outstanding Balance – any remaining debt at a
specified time .
 > COLLATERAL- Are assets that can secure a loan.

>MORTGAGOR - The one who borrowed the loan.

> PRINCIPAL-The original amount borrowed, excluding
interest. The initial loan amount that needs to be repaid.
> LOAN TERM - The period which a borrower is required
to repay the loan.

> AMORTIZATION SCHEDULE - A table details each loan

payments allocation between principal and interest.

> DOWNPAYMENT - It
is the initial upfront payment made by the
borrower when purchasing a property or appliances.
 EXAMPLE 1:
Mr. Garcia borrowed P1,000,000 for the expansion of his business. The
effective rate of interest is 7% The loan is to be repaid in full after one
year. How much is to be paid after one year?
Find F. F=
Given:
=
j=
(interest rate in n= (Interest rate)
conversion period)
TRY ME!!!!

• Dr. Corpuz borrowed 2,000 for the rehabilitation of his

building. The interest rate is 5%. The loan is to repaid
full after 1 year. How much is paid after 1 year.
 EXAMPLE 2:
(Chattel Mortgage). A person borrowed P1,200,000 for the purchase of a car. If
his monthly payment is P31,000 on a 5-years mortgage, find the total amount of
interest.

Given: P= Monthly payment

(5 years)
Total Amount = (12months)

=
Total Interest = total amount = amount of the
mortgage

=
 TRY ME!!!
• Mr. Javier borrowed 3,200 ,000 to buy a house and lot. If his monthly
payment is 50,000 on a 4 year mortgage. Find the total interest.
 EXAMPLE
3:
If a house is sold for P3,000,000 and the bank requires
20% down payment, find the amount of the mortgage.
down payment rate x cash
Down payment =
price
=
=
Amount of the loan = cash price – down payment

=
HAVING FUN :TRY ME

• Luxurious Car sold for 3,500,000 and the bank company

requires 30% downpayment,find the amount of mortgage.
Example 4: Ms. Rosal bought a car. After paying the downpayment,the
amount loan is 400,000 with an interest rate of 9% compounded
monthly. The term of loan is 3years. How much is the monthly
payment.

GIVEN: P=

= n= = =
 TRY ME!!!AMORTIZATION AND MORTGAGE

Aliah bought a Lamborghini . After paying the downpayment,the

amount of her loan is 900,000 with an interest rate of 6% compounded
monthly/quarterly. The term of loan is 2 years. How much is the
monthly payment.
OUTSTANDING BALANCE
One method to compute the outstanding balance is to get the present value of all remaining
payment. This method is called the prospective method.

We use the symbol to denote the outstanding balance after k payments.

Example 5: Mrs. Se borrowed some money from a bank that
offers an interest rate of 12% compounded monthly. His
monthly amortization for 5 years is 11,122.22. How much is
the outstanding balance after 12th payment.
Given: R=

= n=

k= number of payments paid

n–k=
LAST TRY!!!!

• Atty. Ammaqui borrowed small amount of money from the

bank that offers an interest rate of 10% compounded
monthly/semi annually. His amortization for 8 years is 13,212.
How much is the outstanding balance after 12 payment.
 QUIZ TIME: ½ CROSSWISE
DEFINITION OF TERMS
1.This is the installment basis,usually of equal amounts at regular intervals. What
paying method is this?
2. An any remaining debt at a specified time?
3. A mortgage on a movable property like car and house/lot
4. A loan that secured by a collateral that the borrower is obliged to pay at a
specified terms?
5. Assets that can secure a loan
6. The one who borrowed the loan.
7. The original amount borrowed,excluding interest. The initial loan amount that
needs to be repaid.
8. The period which a borrower is required to repay the loan.
9. A table that details each loan payments allocation between principal and
interest, snapshots of the loan repayment overtime.
10. It is the initial upfront payment made by the borrower when purchasing a
property or appliances.
ANSWER KEY:

1. AMORTIZATION METHOD 6. MORTGATOR

2. OUTSTANDING BALANCE 7.PRINCIPAL

3.CHATTEL MORTGAGE 8.LOAN TERM
4.MORTGAGE 9.AMOTOZATION SCHEDULE
5. COLLATERAL 10.DOWNPAYMENT
THANK YOU FOR LISTENING and GOD BLESS
EVERYONE!!!!!!!!

GROUP 1
• GROUP LEADER: Marvin Vuelta
• Busty Corpuz
• Fritz Aragoza
• Princess Siringan
• Frances Padilla