GENERAL

MATHEMATICS
Course Material No. 8

Karla Marie M. Galang

Mathematics Teacher
 2 GENERAL MATHEMATICS • NU LAGUNA

Business and
Consumer Loans 8
LESSON OUTLINE LEARNING OUTCOMES

• Solving Problem on Stocks and

Here’s what I will teach you in this course material:
Bonds
• Basic Concepts of Loans • Illustrate business and consumer loans
• Solving Problem on Business
• distinguish between business and consumer loans.
and Consumer Loans
• solve problems on business and consumer loans (amortization
Unit Outline
CONTENT STANDARDS
and mortgage)
The learner demonstrates the
understanding of the key
concepts of stocks and bonds,
and business and consumer
loans. RESOURCES NEEDED
PERFORMANCE STANDARDS
For this lesson, you would need the following resources:
The learner shall be able to use
appropriate financial • Stocks and Bonds.pptx
instruments involving stocks
and bonds in formulating • Course Material 8
conclusions and making • Instructional videos (see References)
decisions and decide wisely on
the appropriateness of
• Laptop, cellphone, activity sheets, course material, MS Teams
business or consumer loan and software
its proper utilization. •
GENERAL MATHEMATICS • NU LAGUNA 3

TABLE OF CONTENTS

Pretest
Pretest 3
Before you start, try answering the following:

I. Tell whether the following is a characteristic of What Do I already Know

stocks or bonds.
4 About Investing?

1. A form of equity financing or raising money by

allowing investors to be part owners of the Problem Solving on
company. 5 Stocks and Bonds

2. A form of debt financing or raising money by

borrowing from investors.
3. Investors are guaranteed interest payments and a
Basic Concepts of
10 Loans
return of their money at the maturity date.
II. Identify the following whether it is a business loan
or a consumer loan. Written Work 8: Stocks
4. Mr. Lim wants to have another branch for his 16 and Bonds

cellphone repair shop. He decided to apply for a

loan that he can use to pay for the rentals of the new
branch. 17 Summary of the Lesson
5. Trillas runs a trucking business. He wants to buy
three more trucks for expansion of his business. He
applied for a loan in a bank.
Key Terms
III. Solve for the following problems. 18
1. A food corporation declared a dividend of
P25,000,000 for its common stock. Suppose there
Post test
are 180,000 shares of common stock, how much is 18
the dividend per share?
2. A loan of P200,000 is to be repaid in full after 3
years. If the interest rate is 8% per annum. How References
much should be paid after 3 years?
19
4 GENERAL MATHEMATICS • NU LAGUNA

Stocks, Bonds, and

Loan
Key Point

Stocks and bonds help major

businesses and governments to
raise capitals for their
investment project, business
expansion, and strategic
infrastructure. In exchanges, they
must pay dividends, and
interests for investors and
creditors to fulfill their financial
responsibility.

What Do I Already Know About Investing?

Read the questions below and write down a response
based upon your knowledge of and/or experience
with investing. Be prepared to discuss your responses
with fellow class members.

1. What personal experience have you had with investing?

2. What have you heard about investing from others (parents, peers,
relatives, teachers, etc.)?

3. What television shows or movies relate to investing? Write a short

discussion to describe these.

4. What questions do you have about investing?

5. How can you personally relate to the topic of investing?

Saving = Low Risk, Low Reward and Investing = High Risk, High POTENTIAL
Reward
GENERAL MATHEMATICS • NU LAGUNA 5

Problem Solving on Stocks and Bonds

As what you’ve learned in the previous lesson about annuities, Stocks –share in the
ownership of a company
stocks and bonds are also funds that accumulates over the period of
time. Stocks and bonds are investment instruments of a corporation. Dividend – share in the
company’s profit
There are companies or corporation issues stock in which they sell
Dividend Per Share –
the part of the business to new owners and in every share of stock is a ratio of the dividends to
share in the ownership of the corporation that issued it. On the other the number of shares

hand, bond is a promissory note that serves as evidence of a dept of Stock Market –a place
where stocks can be
the corporation to the bondholder. bought or sold. The stock
market in the Philippines
is governed by the
STOCKS Philippine Stock Exchange
(PSE)
The following formulas are used in stocks:
Market Value –the
• Dividend per share (common)
current price of a stock at
𝑻𝒐𝒕𝒂𝒍 𝑫𝒊𝒗𝒊𝒅𝒆𝒏𝒅
= 𝑵𝒖𝒎𝒃𝒆𝒓 𝒐𝒇 𝒔𝒉𝒂𝒓𝒆𝒔 which it can be sold

Stock Yield Ratio –ratio

of the annual dividend per
• Total preferred dividend share and the market
= (𝑵𝒖𝒎𝒃𝒆𝒓 𝒐𝒇 𝒔𝒉𝒂𝒓𝒆𝒔)(𝑫𝒊𝒗𝒊𝒅𝒆𝒏𝒅 𝒑𝒆𝒓 𝒔𝒉𝒂𝒓𝒆) value per share. Also
called current stock yield.

Par Value –the per share

• Total common dividend
amount as stated on the
= 𝑻𝒐𝒕𝒂𝒍 𝒅𝒊𝒗𝒊𝒅𝒆𝒏𝒅 − 𝑻𝒐𝒕𝒂𝒍 𝒑𝒓𝒆𝒇𝒆𝒓𝒓𝒆𝒅 𝒅𝒊𝒗𝒊𝒅𝒆𝒏𝒅 company certificate.
Unlike market value, it is
determined by the
• Dividend per share (preferred) company and remains
stable over time
= (𝑷𝒂𝒓 𝒗𝒂𝒍𝒖𝒆)(𝑫𝒊𝒗𝒊𝒅𝒆𝒏𝒅 𝒓𝒂𝒕𝒆)

• Current Yield
𝑨𝒏𝒏𝒖𝒂𝒍 𝒅𝒊𝒗𝒊𝒅𝒆𝒏𝒅 𝒑𝒆𝒓 𝒔𝒉𝒂𝒓𝒆
= 𝑪𝒖𝒓𝒓𝒆𝒏𝒕 𝒑𝒓𝒊𝒄𝒆 𝒑𝒆𝒓 𝒔𝒉𝒂𝒓𝒆

• Price-earnings Ratio of Stock

𝑪𝒖𝒓𝒓𝒆𝒏𝒕 𝒑𝒓𝒊𝒄𝒆 𝒑𝒆𝒓 𝒔𝒉𝒂𝒓𝒆
=
𝑬𝒂𝒓𝒏𝒊𝒏𝒈𝒔 𝒑𝒆𝒓 𝒔𝒉𝒂𝒓𝒆
6 GENERAL MATHEMATICS • NU LAGUNA

Example 1.
A certain financial institution declared a
𝑃ℎ𝑃 30,000,000 dividend for the common stocks. If
there are a total of 700,000 shares of common stock,
how much is the dividend per share?
Given:
Total Dividend = 𝑃ℎ𝑃 30,000,000

Total Shares = 700,000

Find: Dividend per Share

Solution:
Total Dividend
Dividend per Share =
Number of shares

𝑃ℎ𝑃 30,000,000
=
700,000

= 𝑷𝒉𝑷 𝟒𝟐. 𝟖𝟔

Therefore, the dividend per share is 𝑃ℎ𝑃 42.86.

Example 2.
XYZ corporation is currently selling for 𝑃ℎ𝑃 2,512
per share. If the corporation had earnings per share of
𝑃ℎ𝑃 78.50 in the past year, what is the price-earnings ratio
for XYZ corporation?

Given:
Current price per share = 𝑃ℎ𝑃 2,512

Earnings per share = 𝑃ℎ𝑃78.50

Find: Price-earnings ration

GENERAL MATHEMATICS • NU LAGUNA 7

Solution:
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑝𝑟𝑖𝑐𝑒 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒
Price-earnings Ratio of Stock = 𝐸𝑎𝑟𝑛𝑖𝑛𝑔𝑠 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒

𝑃ℎ𝑃 2,512
= 𝑃ℎ𝑃 78.50

Price-earnings Ratio of Stock = 𝟑𝟐 𝑜𝑟 𝟑𝟐: 𝟏

Thus, the investors are currently willing to pay 30 times
of the earnings for one share of XYZ stock.

Example 3.
Corporation A, with a current market value of
𝑃ℎ𝑃 52, gave a dividend of 𝑃ℎ𝑃 8 per share for its
common stock. Corporation B, with a current market
value of 𝑃ℎ𝑃 95, gave a dividend of 𝑃ℎ𝑃 12 per share.
Use the stock yield ratio to measure how much dividends
shareholders are getting in relation to the amount
invested.

Corporation A
Given: Dividend per share = 𝑃ℎ𝑃 8
Market value = 𝑃ℎ𝑃 52

Find: Stock yield ratio

Solution:
Dividend per share
Stock yield ratio =
Market value

8
Stock yield ratio =
52

0.1538 = 𝟏𝟓. 𝟑𝟖%

8 GENERAL MATHEMATICS • NU LAGUNA

Corporation B: Bond – interest-bearing

security which promises to
Given: Dividend per share = 𝑃ℎ𝑃 12 pay (1) a stated amount of
Market value = 𝑃ℎ𝑃 95 money on the maturity
date, and (2) regular
interest payments called
coupons.
Find: stock yield ratio
Coupon –periodic interest
Solution: payment that the
Dividend per share bondholder receives during
Stock yield ratio = the time between purchase
Market value
date and maturity date;
usually received semi-
12 annually
Stock yield ratio =
95
Coupon Rate –the rate per
coupon payment period;
0.1263 = 𝟏𝟐. 𝟔𝟑% denoted by r

Corporation A has a higher stock-yield-ratio than Price of a Bond –the price

of the bond at purchase
Corporation B. Thus, each peso will earn you more if you time; denoted by P
invest in Corporation A than in Corporation B. If all other
Par Value or Face Value -
things are equal, then it is wiser to invest in Corporation A. the amount payable on the
maturity date; denoted by F.
As Example 3 shows, the stock yield ratio can be used
If P = F, the bond is
to compare two or more investments. purchased at par.

If P < F, the bond is

purchased at a discount.
BONDS
If P > F, the bond is
The following formulas are used in bonds: purchased at premium.

• Bond Yields (%) Term of a Bond – fixed

𝑨𝒏𝒏𝒖𝒂𝒍 𝒊𝒏𝒕𝒆𝒓𝒆𝒔𝒕
= period of time (in years) at
𝑷𝒓𝒊𝒄𝒆 𝒑𝒆𝒓 𝒔𝒉𝒂𝒓𝒆 which the bond is
redeemable as stated in the
• Current Yield (%) bond certificate; number of
𝑨𝒏𝒏𝒖𝒂𝒍 𝒊𝒏𝒕𝒆𝒓𝒆𝒔𝒕
= years from time of purchase
𝑪𝒖𝒓𝒓𝒆𝒏𝒕 𝒑𝒓𝒊𝒄𝒆 to maturity date.

• Approximate Yield to Maturity Fair Price of a Bond –

𝑷−𝑪
𝑰+ (
𝒏
) present value of all cash
= 𝑷+𝑪 inflows to the bondholder
𝟐
where, 𝐼 → amount of annual interest
𝑃 → par value of the bond
𝐶 → cost or current price
𝑛 → number of years to maturity
GENERAL MATHEMATICS • NU LAGUNA 9

Example 4.
For a 𝑃ℎ𝑃 5,000 with a 6% bond, that is
𝑃ℎ𝑃 5,250 with 10 years left to maturity, what is the
approximate yield to maturity?

Given: 𝐼 = (𝑃ℎ𝑃 5,000)(0.06) = 𝑃ℎ𝑃 300

𝑛 = 10 𝑦𝑒𝑎𝑟𝑠
𝑃 = 𝑃ℎ𝑃 5,000
𝐶 = 𝑃ℎ𝑃 5,250

Find: approximate yield to maturity

Solution:
𝑃−𝐶 𝑃ℎ𝑃 5,000 −𝑃ℎ𝑃 5,250
𝐼+ ( ) 𝑃ℎ𝑃 300 + ( )
𝑛 10
𝑃+𝐶 = 𝑃ℎ𝑃 5,000+𝑃ℎ𝑃 5,250
2 2

Approximate yield to maturity = 0.0537 ≈ 𝟓. 𝟑𝟕%

Therefore, the approximate yield to maturity is 5.37%.

Example 5.
What is the current yield of a bond whose face value is
𝑃ℎ𝑃 14,500 and pays a yearly interest of 12% if purchased at
face value at 𝑃ℎ𝑃 13,920?

Given: Annual interest = (𝑃ℎ𝑃 14,500)(0.12) = 𝑃ℎ𝑃 1,740

Current price = 𝑃ℎ𝑃 13,920

Find: current yield

Solution:
𝐴𝑛𝑛𝑢𝑎𝑙 𝑖𝑛𝑡𝑒𝑟𝑒𝑠𝑡
Current Yield = 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑝𝑟𝑖𝑐𝑒

𝑃ℎ𝑃 1,740
= 𝑃ℎ𝑃 13,920

Current Yield = 𝟏𝟐. 𝟓%

Thus, the current yield of a bond is 12.5%

10 GENERAL MATHEMATICS • NU LAGUNA

Example 6
ConventionalIMPORTANT
notation NOTE
Determine the amount of the semi-annual coupon for a
bond with a face value of 𝑃ℎ𝑃 300,000 that pays 10%, The coupon rate is used only
for computing the coupon
payable semi-annually for its coupons.
amount, usually paid semi-
annually. It is not the rate at
Given: Face Value F = 𝑃ℎ𝑃 300,000 which money grows. Instead
current market conditions are
Coupon rate r = 10% reflected by the market rate
and is used to compute the
present value of future
Find: Amount of the semi-annual coupon
payments.

Solution:
Annual coupon amount: 𝑃ℎ𝑃 300,000(0.10) = 𝑃ℎ𝑃 30,000
1
Semi-annual coupon amount: 𝑃ℎ𝑃 30,000 ( ) = 𝑷𝒉𝑷 𝟏𝟓, 𝟎𝟎𝟎
2
Thus, the amount of the semi- annual coupon is P15,000.

1. A financial institution declared a dividend of P75,000,000 for its common stock.

Suppose there are 900,000 shares of common stock, how much is the dividend per

share?

2. The ABC corporation gave out P38 dividend per share for its common stock. The
market value of the stock is P108. Determine the stock yield ratio.

3. A bank declared a dividend of P27 per share for the common stock. If the common
stock closes at P93, how large is the stock yield ratio on this investment?

4. Find the amount of the semi-annual coupon for a P200,000 bond which pays 5%
convertible semi-annually for its coupons.

5. Determine the amount of semi-annual coupon paid for a 3% bond with a face value
of P100,000 which matures after 8 years. How many coupons are paid?
GENERAL MATHEMATICS • NU LAGUNA 11

Basic Concepts of Loans

Loan –amount of money
If you want to have a business or own property but that you borrowed and
repay with interest on a
you have an insufficient amount of money on hand, you payment interval

may borrow money from someone you know, from a Secured loans – it
requires collaterals in
bank, or from organization. Usually, banks or other personal properties of the
borrower
companies let you to borrow money from them and you
need to pay them back with interest. This borrowed Unsecured loans –these
issued based on the
money is commonly known as loan. financial statement of the
borrower
Loans may come in a variety of forms, two
commonly types of loans are: consumer loans and
business loan. Consumer loan is a type of loan in which
it is given to retail customers or individuals for the
personal purpose. On the other hand, business loan is
lent to companies or business enterprise to finance their
business operating costs like commercial loan, small or
big enterprise loan, corporate loan, and other loans related
to business.

Examples: Identify if the given problem is a consumer or

business loan.
a) Mr. Agustin plans to have a barbershop. He wants to
borrow some money from the bank in order for him to
buy the equipment and furniture for the barbershop.
Answer. Business loan

b) Mr. and Mrs. Craig want to borrow money from the bank
to finance the college education of their son.
Answer. Consumer loan
12 GENERAL MATHEMATICS • NU LAGUNA

c) Mr. Alonzo wants to have some improvements on their

10-year-old house. He wants to build a new room for
their 13-year-old daughter. He will borrow some money
from the bank to finance this plan.
Answer. Consumer loan

d) Mr. Samson owns a siomai food cart business. He wants

to put another food cart on a new mall in the other city.
He decided to have a loan to establish the new business.
Answer. Business loan

e) Roan has a computer shop. She owns 6 computers. She

decided to borrow some money from the bank to buy 10
more computers.
Answer. Business loan

Annual Percentage Rate

If you are applying for a loan, you need to know
first what the interest rate offers. A lending organization
or company quote an annual interest rate and the annual
percentage rate (APR) for a loan. The formula below is
used to calculate the APR for a loan payable in a lump
sum.
𝑭𝒊𝒏𝒂𝒏𝒄𝒆 𝒄𝒉𝒂𝒓𝒈𝒆 𝒇𝒐𝒓 𝒐𝒏𝒆 𝒚𝒆𝒂𝒓
𝑨𝑷𝑹 =
𝑷𝒓𝒊𝒏𝒄𝒊𝒑𝒂𝒍
On the other hand, to calculate the APR for a loan
payable on installment payment at the annuity, the
formula is given below,
(𝟐)(𝒏𝒖𝒎𝒃𝒆𝒓 𝒐𝒇 𝒑𝒂𝒚𝒎𝒆𝒏𝒕 𝒑𝒆𝒓𝒊𝒐𝒅𝒔)(𝒇𝒊𝒏𝒂𝒏𝒄𝒆 𝒄𝒉𝒂𝒓𝒈𝒆)
𝑨𝑷𝑹 =
(𝒂𝒎𝒐𝒖𝒏𝒕 𝒍𝒐𝒂𝒏𝒅)(𝒕𝒐𝒕𝒂𝒍 𝒏𝒖𝒎𝒃𝒆𝒓 𝒐𝒇 𝒑𝒂𝒚𝒎𝒆𝒏𝒕𝒔 − 𝟏)
GENERAL MATHEMATICS • NU LAGUNA 13

The term finance charge is the amount that a lender charges for
lending money to others. The formula is given below,
𝟏𝟐 𝒎𝒐𝒏𝒕𝒉𝒔
𝑨𝒏𝒏𝒖𝒂𝒍 𝒇𝒊𝒏𝒂𝒏𝒄𝒆 𝒄𝒉𝒂𝒓𝒈𝒆 = (𝒇𝒊𝒏𝒂𝒏𝒄𝒆 𝒄𝒉𝒂𝒓𝒈𝒆 𝒇𝒐𝒓 𝒕𝒉𝒆 𝒈𝒊𝒗𝒆𝒏 𝒎𝒐𝒏𝒕𝒉𝒔) ( )
𝒈𝒊𝒗𝒆𝒏 𝒎𝒐𝒏𝒕𝒉𝒔

Example 7
A lending company offers a salary loan of 𝑃ℎ𝑃 50,000
for 2 months with a 𝑃ℎ𝑃 200 finance charge. What APR is the
lender offering?

Given: 𝑃𝑟𝑖𝑛𝑐𝑖𝑝𝑎𝑙 = 𝑃ℎ𝑃 50,000

𝑓𝑖𝑛𝑎𝑛𝑐𝑒 𝑐ℎ𝑎𝑟𝑔𝑒 𝑓𝑜𝑟 𝑡ℎ𝑒 𝑔𝑖𝑣𝑒𝑛 𝑚𝑜𝑛𝑡ℎ𝑠 = 𝑃ℎ𝑃 200
𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑚𝑜𝑛𝑡ℎ𝑠 = 2 𝑚𝑜𝑛𝑡ℎ𝑠

Since the finance charge is always calculated based on

one year, we have
12 𝑚𝑜𝑛𝑡ℎ𝑠
𝑎𝑛𝑛𝑢𝑎𝑙 𝑓𝑖𝑛𝑎𝑛𝑐𝑒 𝑐ℎ𝑎𝑟𝑔𝑒 = (𝑃ℎ𝑃 200) ( 2 𝑚𝑜𝑛𝑡ℎ𝑠 )

𝑎𝑛𝑛𝑢𝑎𝑙 𝑓𝑖𝑛𝑎𝑛𝑐𝑒 𝑐ℎ𝑎𝑟𝑔𝑒 = 𝑃ℎ𝑃 1,200

Find: 𝐴𝑃𝑅

Solution.
𝐹𝑖𝑛𝑎𝑛𝑐𝑒 𝑐ℎ𝑎𝑟𝑔𝑒 𝑓𝑜𝑟 𝑜𝑛𝑒 𝑦𝑒𝑎𝑟
𝐴𝑃𝑅 = 𝑃𝑟𝑖𝑛𝑐𝑖𝑝𝑎𝑙

𝑃ℎ𝑃 1,200
𝐴𝑃𝑅 = = 0.024 = 𝟐. 𝟒%
𝑃ℎ𝑃 50,000

Thus, the APR offers by the lender is 2.4%.

14 GENERAL MATHEMATICS • NU LAGUNA

Amortization
If you are paying a loan in with equal sums over a
certain period of time is known as amortization. Common
examples of this amortization are the purchase of real
estate like houses, condominiums, or other forms of
habitation. In case that loan is to be amortized, the
principal and interest are paid off by a series of equal
periodic payments. On the previous discussion, you’ve
learned that the present value is the amount you borrowed
and if the series of periodic payments reduce the amount
borrowed to 0, it is now the rent or mortgage.
To calculate the mortgage, the concept of the
periodic payments in present value will be used. The
formula is given below,
𝒊(𝟏 + 𝒊)𝒏
𝑹=𝑷 ( )
(𝟏 + 𝒊)𝒏 − 𝟏
where 𝑅 → periodic payment
𝑃 → present value
𝑖 → interest rate per period
𝑛 → number of payments

Example 8
Kaye borrowed 𝑃ℎ𝑃 100,000 for the improvement of her
home. She agreed to repay the loan in monthly payments for 5
years at 6% interest compounded monthly.
a. How much is her monthly payment?
b. What is the total amount to be paid?
c. How much interest is included in the total payment?
GENERAL MATHEMATICS • NU LAGUNA 15

Given: 𝑃 → 𝑃ℎ𝑃 100,000

0.06
𝑖 → = 0.005
12

𝑛 → 12(5) = 60

Solution:
(0.005)(1+0.005)60
a. 𝑅 = 𝑃ℎ𝑃 100,000 ( )
(1+𝑖0.005)60 −1

𝑅 = 𝑷𝒉𝑷 𝟏, 𝟗𝟑𝟑. 𝟐𝟖
Therefore, Kaye’s monthly payment is 𝑃ℎ𝑃 1,933.28

b. Total amount to be paid = 𝑅 𝑥 𝑛

= (𝑃ℎ𝑃 1,933.28)(60)
Total amount to be paid = 𝑷𝒉𝑷 𝟏𝟏𝟓, 𝟗𝟗𝟔. 𝟖𝟎
Thus, the total amount to be paid is 𝑃ℎ𝑃 115.996.80

Example 9
(Chattel mortgage). A person borrowed 𝑃ℎ𝑃 1,200,000
for the purchase of a car. If his monthly payment is 𝑃ℎ𝑃 31,000
on a 5-year mortgage, find the total amount of interest.

Given: 𝑃 = 𝑃ℎ𝑃 1,200,000

𝑀𝑜𝑛𝑡ℎ𝑙𝑦 𝑝𝑎𝑦𝑚𝑒𝑛𝑡 = 𝑃ℎ𝑃 31,000

Solution. The total amount paid is given by

T𝑜𝑡𝑎𝑙 𝐴𝑚𝑜𝑢𝑛𝑡 = (𝑃ℎ𝑃 31,000)(12 𝑚𝑜𝑛𝑡ℎ𝑠)(5 𝑦𝑒𝑎𝑟𝑠) = 𝑷𝒉𝑷 𝟏, 𝟖𝟔𝟎, 𝟎𝟎𝟎.
Thus, the total interest is the difference between the total amount paid
and the amount of the mortgage
𝑇𝑜𝑡𝑎𝑙 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 = 𝑃ℎ𝑃 1,860,000 – 𝑃ℎ𝑃 1,200,000 = 𝑷𝒉𝑷 𝟔𝟔𝟎, 𝟎𝟎𝟎
16 GENERAL MATHEMATICS • NU LAGUNA

WRITTEN WORK 8
Stocks and Bonds!

Directions: Read and solve each problem. Show your complete solutions for each
problem.
Rubric: given – 2 points
solution – 2 points
final answer – 2 points
conclusion – 1 point

1. What is the current yield of a bond whose face value is 𝑃ℎ𝑃 23,200 and

pays a yearly interest of 9.2% if purchased at face value at 𝑃ℎ𝑃 21,230?

2. ABC Inc. has 2,000,000 shares of common stock outstanding. If a dividend

of 𝑃ℎ𝑃 72,000,000 was declared by the company directors last year, what
are the dividend per share of common stock?

The board of directors of XYZ Inc. have declared a divided of 𝑃ℎ𝑃 23,000,000.
The company has 12,300 shares preferred stock that pay 𝑃ℎ𝑃 50 per share and
24,600 shares of common stock. Find the following:

3. Total amount of dividends of a preferred stock.

4. Total amount of dividends of a common stock.

5. Dividend per share for the common stock.

 GENERAL MATHEMATICS • NU LAGUNA 17

There are different kinds of investment around us, but the most precious
investment is investing in yourself. As a student, what do you think is the importance
of investing in yourself?

LESSON SUMMARY

• When an investor buys a stock, part ownership in the form of a share is bought.

• Bonds are a type of investment designed to aid governments and corporations to

raise money.

• When bonds and stocks are compared, bonds are considered to be a safer
investment.

• It is important to note that bonds are not completely risk-free and only receive
preference in case of bankruptcy.

• Consumer loans include things like mortgages, auto loans, boat loans, and even credit
cards.

• Business loans, also known as commercial loans, can be much more complex and
involve any number of different properties or pieces of equipment.
18 GENERAL MATHEMATICS • NU LAGUNA

KEY TERMS

Bond Dividend Market value

Business consumer Dividend per share Par value
Consumer loan Fair price of a bond Price of a bond

POSTTEST
Read the questions carefully. Show your computation.
I. Tell whether the following is a characteristic of stocks or bonds.
1. Investors can earn if the security prices increase, but they can lose money if the

security prices decrease or worse if the company goes bankrupt.

2. It can be appropriate for retirees (because of the guaranteed fixed income) or for
those who need the money soon.

II. Identify the following whether it is a business loan or a consumer loan.

3. Mrs. Alonzo decided to take her family for a vacation. To cover the expenses, she

decided to apply for a loan.

4. Glenn decided to purchase a condominium unit near his workplace. He got a loan

worth P2,000,000.

5. Mr. Galang purchased renovated her house P80,000. This was made possible
because of an approved loan worth P75,000.

III. Solve for the following problems.

1. A certain financial institution declared P57 dividend per share for its common stock.

The market value of the stock is P198. Determine the stock yield ratio.
2. For a purchase of a house and lot worth P3,800,000, the bank requires 20% down

payment, Find the mortgaged amount.

GENERAL MATHEMATICS • NU LAGUNA 19

REFERENCES

Barcelona, A. B., Belecina, R. R., & Villanueva, J. C. (2016). Conceptual Math and Beyond (General
Mathematics). Quezon City, Philippines: Brilliant Creations Publishing, Inc.
Cristobal, R. and Gabuyo, Y. (2019) General Mathematics. The Intelligente Publishing, Inc.

Marcos, J (2020). General Mathematics – Grade 11 Self-Learning Module (SLM). Department of

Education –SOCCSKSARGEN Region. Regional Center, Brgy. Carpenter Hill, City of Koronadal

Oronce, O. (2016). General Mathematics. Rex Bookstore

Regacho, C., et.al. (2017). Mathematics Skills for Life. Abiva Publishing House Inc.

Sirug, W. (2016) General Mathematics for Senior High School: A comprehensive Approach - K to
12 Curriculum Compliant. Mindshappers Co., Inc

Videos:

• GENERAL MATH | STOCKS AND BONDS PART 1 | CONCEPTS OF STOCKS AND SAMPLE
PROBLEMS | TAGLISH - YouTube
• Basic Concepts of Stocks and Bonds || Grade 11 General Mathematics - YouTube
• #stocks #genmath Stocks and bonds - Gen Math - YouTube
• Difference Between Stocks and Bonds in TAGALOG!!! - YouTube
• General Mathematics. Quarter 2: Problems Involving Business and Consumer Loans - YouTube

Contributors:

MS. KARLA MARIE M. GALANG

MS. JHANNA MAE V. TADIQUE

MR. JUNJUN A. VILLANUEVA