5 Mathematics of Finance1

CTU GEC TRAINING 2020
GEC – MMW Mathematics in the Modern World

Week 5 | 02 December 2020
MATHEMATICS
OF FINANCE
LESSON 5
JULIUS D. SELLE
Main Campus
TARGET COURSE LEARNING OUTCOMES
use mathematics in other areas such as finance
appreciate the nature and uses of mathematics in everyday life
2
TOPICS
▪ Simple Interest
▪ Compound Interest
▪ Credit Cards and Consumer Loans
▪ Stocks, Bonds, and Mutual Funds
CTU GEC Training 2020 | GEC-MMW Mathematics in the Modern World 3

5.1 SIMPLE INTEREST
Simple interest | Future and Maturity Value
OBJECTIVES
• Calculate simple interest
• Calculate future and maturity values
4
SIMPLE INTEREST
Suppose Person A agrees to lend Person B

some amount of money. This amount is
called the principal. After an agreed
period of time, Person B has to pay the
loan with an additional amount called the
interest. The percent used to determine
the amount of interest is called the
interest rate.
For instance, if Person A lends PhP 10,000

to Person B and charging a 5% interest per
year, then the amount PhP 10,000 is the
principal while 5% is the interest rate.

Simple Interest Formula
Example
Calculate the simple interest on a loan of PhP 1000

after 3 years if the interest rate is 5%.

Solution
Practice 1 Practice 2
Calculate the simple interest earned in a 5-month The simple interest charged on a 6-month loan of PhP
time deposit of PhP 20000 if the interest rate is 3000 is PhP 150. Find the simple interest rate.
0.25% per month.

MATURITY AND FUTURE VALUES OF A SIMPLE INTEREST
MATURITY VALUE FUTURE VALUE

MATURITY AND FUTURE VALUES
•
Example
Calculate the maturity of a simple interest,
8-month loan of PhP 8,000 if the interest
rate is 9.75%.

Solution
Practice 1 Practice 2
Calculate the maturity value of a simple interest, 3- Find the future value after 1 year of PhP 850 in an
month loan of PhP 3,800. The interest rate is 6%. account earning 8.2% simple interest.

OBJECTIVES CHECKLIST
5.1 SIMPLE INTEREST

✔ Calculate simple interest
✔ Calculate future and maturity values
EXERCISES
POSSIBLE/SUGGESTED ACTIVITIES
1. What is the interest of 6-month loan
worth PhP 2 000 if the monthly interest Research loan/deposit terms of lending and financing
rate is 2.5%? companies, and banks. Examples:
2. What amount should be deposited in • BPI Savings Account Deposit Rates
order to earn an interest of PhP 3 000 in 2 https://www.bpiexpressonline.com/p/1/326/deposit-rates-savings-and-
years if the bank advertises 1% simple checking
annual interest rate?
• CitySavings Bank Time Deposit
3. Find the future value of a 30-month time https://citysavings.com.ph/deposits/time-deposit
deposit worth PhP 50 000, to a bank
which offers 1.25% simple interest rate. Create a loan/balance schedule based on the interest rates
and other terms published in the website.
4. Calculate the maturity value of a simple
interest, 1-year loan of PhP 6 700 if the * May need lessons on tax on interest and other charges.
interest rate is 8.9%.

5.2 COMPOUND INTEREST
Compound interest | Present Value | Inflation | Effective Interest Rate
OBJECTIVES
• Calculate compound interest and future
value of a compound interest.
• Calculate present value.
• Estimate prices, purchasing power, and

future values due to inflation.
• Calculate nominal and effective rates.

12
COMPOUND INTEREST
Most institutions apply simple interest only

when the term of the loan or deposit is less
than the period (e.g., a deposit of less than
one year for an annual interest rate). If the
term covers more than one period
compound interest is applied.
The principle of this computation is that

interest is earned not only by the principle,
but also by the interest that have already
been earned. For example, if interest have
already been earned in the first year, then
that interest will also earn its own interest
on the next year.

COMPOUND INTEREST
•

Compound Amount

Example
Notes
• Let us agree to round off all amounts to two
decimal places when necessary.
• In reality, a 20% withholding tax is charged

for every interest earned.
COMPOUND INTEREST
Practice 1
A lending company offers two loan programs:
Program A. 10% interest rate compounded quarterly

Program B. 5% interest rate compounded monthly. Practice 2
If you want to take a loan worth PhP 50 000 payable
Find the interest earned after 5 years in a deposit
in three years, which program would you avail?
worth PhP 10 000 if the interest rate is 2.5%
compounded monthly.
Present
Value
Present Value Formula

Remark
The present value is used to determine how much
money must be invested today in order for an
investment to have a specific value at a future date.

Example
How much money should be invested in an account
that earns 8% interest compounded quarterly in
order to have PhP 30 000 in 5 years?
Practice
How much money should be invested in an account
that earns 9% interest, compounded semiannually, in
order to have PhP 20 000 in 5 years?

INFLATION
•

INFLATION
Inflation is an economic condition during

which there are increases in the costs and
services.
In the past few years, the following were
the recorded inflation rates:
* 2020 data is based on a 10-month geometric average

YOUR SAVINGS VS INFLATION
SAVINGS INFLATION

Note
Example Solution
If a 50-kg sack of rice is currently priced PhP 2 200,
estimate its price in 10 years.

Purchasing Power
Purchasing power is the measure of how much a
future value is worth in today’s money. For
example, an amount of PhP 10,000 in 2050 has
a purchasing power of only PhP 4 767.43.
In other words, 10 thousand pesos in 2050 is

worth only 4.7 thousand in todays money. What
you can buy for 10 thousand pesos in 2050 is
about the same as what you can by for 4.7
thousand pesos today.
Purchasing Power Formula

Example
You purchased an insurance for PhP 75 000. The company
promises to grant you the amount of PhP 200 000 when
you retire in 2067. Calculate the purchasing power of this
amount. Was this a good purchase?

Solution
Practice
The US inflation rate is steady at 6.1%. If John expects
an amount of USD 200 000 for his retirement in
2030, calculate the purchasing power of this
amount. Will he be able to buy a house that’s worth
about USD 100,000 today?
EFFECTIVE INTEREST RATES
•

Effective Interest Rate
The annual interest rate that is compounded during
some period is called the nominal rate. The effective
rate is the simple interest rate that would yield the
same amount of interest after one year.
Example
A bank offers a savings account that pays 2.75%
annual interest compounded quarterly. What is
this bank’s nominal rate and effective rate?

Solution
Practice 2
Practice 1
You are choosing between to loan offers. One incurs
Find the effective interest of a savings account which 5% interest compounded monthly, the other 5.1%
earns 3% compounded semiannually. compounded quarterly. Which one would you choose?


✔ Calculate compound interest and future
EXERCISES ✔ Calculate present value.
✔ Estimate prices, purchasing power, and
1. Find the amount of a deposit worth PhP ✔ Calculate nominal and effective rates.
1200 earning 0.75% interest compounded
quarterly after 3 years.
2. How much would you need to invest in SUGGESTED/POSSIBLE ACTIVITIES
order to achieve an amount of PhP 70
Name one product in the following category and research
thousand in 2035 if this investment
their current price:
scheme is projected to earn 6.2%
annually? • Daily essentials (food, soap, etc.)
3. The global average gasoline inflation rate • Price per square meter of land in their neighborhood
is 9.09%. If a liter of premium gasoline
costs PhP 45.90 on November 2020, how • Expensive accessories such as jewelry, gadgets, etc.
much would we project it to cost in May Using the average inflation rate, estimate these prices in
2022? 10 years.


✔ Calculate compound interest and future
EXERCISES ✔ Calculate present value.
✔ Estimate prices, purchasing power, and
4. Your piggybank already has PhP 6,912 ✔ Calculate nominal and effective rates.
worth of coins in it. You decide not open it
until your birthday in May 2025. What will
be the purchasing power of this money by SUGGESTED/POSSIBLE ACTIVITIES
then?
Name one product in the following category and research
5. What is the nominal and effective rate of a
their current price:
bank which offers 0.45% interest
compounded monthly? • Daily essentials (food, soap, etc.)
• Price per square meter of land in their neighborhood
• Expensive accessories such as jewelry, gadgets, etc.
Using the average inflation rate, estimate these prices in
10 years.

5.3 CREDIT CARDS AND CONSUMER LOANS
Truth in Lending Act | Finance Charges | APRs | Monthly Payments | Loan Payoffs
OBJECTIVES
• Calculate finance charges on credit
card loans.
• Calculate annual percentage rates.
• Calculate monthly payments for a

consumer loan.
• Calculate the amount of payoff for a

consumer loan.
31
TRUTH IN LENDING ACT
R.A. 3765
RA 3765 otherwise known as the “Truth in

Lending Act” protects citizens from the
lack of awareness of the true cost of
credit to the user by assuring a full
disclosure of such cost with a view of
preventing the uninformed use of credit
to the detriment of the national economy.
Section 4. Any creditor shall furnish to
each person whom credit is extended,
prior to the consummation of the
transaction, a clear statement in writing
setting forth, to the extent applicable and
in accordance with the rules and
regulations prescribed by the Board, the
following information:

R.A. 3765
1) the cash price or delivered price of the

property or service to be acquired;
2) the amounts, if any, to be credited as
down payment and/or trade-in;
3) the difference between the amounts
set forth under clauses (1) and (2);
4) the charges individually itemized,
which are paid or to be paid by such
person in connection with the
transaction but which are not incident
to the extension of credit;
5) the total amount to be financed;

R.A. 3765
6) the finance charge expressed in terms

of pesos and centavos; and,
7) the percentage that the finance bears
to the total amount to be financed
expressed as a simple annual rate on
the outstanding unpaid balance of the
obligation.

FINANCE CHARGES
When a customer uses a credit card to

make a purchase, the customer is actually
receiving a loan. Therefore, there is
frequently an added cost to the consumer
who purchases on credit. This added cost
may be in the form of an annual fee or
interest charges on purchases. A finance
charge is an amount paid in excess of the
cash price; it is the cost to the customer
for the use of credit.

• Most credit card companies issue monthly bills.
• The due date on the bill is usually 1 month after

the billing date (the date the monthly bill is
prepared and sent to the customer). It is also
common that a fixed date is set in the issuance of
bills, e.g. every 10th of the month.
• If the bill is paid in full by the due date, the

customer pays no finance charge.
• If the bill is not paid in full by the due date, a

finance charge is added to the next bill.

Sample Transaction
Record
Suppose we have a credit card company which sets
due date every 1st of the month. If its annual interest
rate is 24%, what will be the finance charge (interest)
Solution
and outstanding balance on Dec 01? In order to solve the problem, we would first need the
average daily balance. Note that we need to count the
number of days every time a new transaction is made so
Date Payments Purchases Balance that we can calculate the mean of the daily balances. (Just
Nov 01 (O/S) 31 246.05 like computing for the weighted mean!)
Nov 03 20 000 21 246.05

Nov 07 2 346.25 23 592.30 31 246.05 2 62 492.10
Nov 16 20 000 100.00 3 692.30 21 246.05 4 84 984.20
Nov 20 1 715.50 5 407.80 23 592.30 9 212 330.70
Nov 28 1 200.00 6 607.80 3 692.30 4 14 769.20
Nov 30 5 000 1 607.80 5 407.80 8 43 262.40
Dec 01 (Bill) Finance Charge: ??? ??? 6 607.80 2 13 215.60
1 607.80 1 1 607.80
Note
To determine monthly interest rate, simply divide the
annual interest rate by 12. So since the interest rate in
our example is 24%, the monthly interest rate would
be 2%.
Practice
In the same credit card, for the month of
December, the customer plans to purchase on
Dec 05 an item worth PhP 15 000 and make
periodic payments of PhP 4 000 every Monday
thereafter. What will be the O/S Balance on
January 01, 2021?
ANNUAL PERCENTAGE
RATE
Section 4, clause (7) of RA 3765 specifies
that the lender has to declare the simple
annual rate. In actuarial terms, this is
called the annual percentage rate
(sometimes true annual interest rate or
annual percentage yield) or APR.
The clause also specifies that the interest
is owed only to the unpaid balance of
the loan. Because of this, the simple
interest rate which takes effect every due
date may change every time. The APR is
a measure that gives the true annual
interest rate of the loan.

For example, a lending company offers a loan worth
PhP 24 000, with a simple annual interest rate of
10% for a term of 6 months and to be done in six Common Simple Interest Calculation
equal monthly payments.
Month Balance Payment O/S
0 25 200.00
1 25 200.00 4 200.00 21 000.00
2 21 000.00 4 200.00 16 800.00
3 16 800.00 4 200.00 12 600.00
4 12 600.00 4 200.00 8 400.00
5 8 400.00 4 200.00 4 200.00
6 4200.00 4 200.00 0.00

Annual Percentage Rate Formula
Month Balance Interest Payment O/S

0 24
000.00
1 24 342.80 4 200.00 20 142.80
000.00
2 20 142.80 287.71 4 200.00 16 230.51
3 16 230.51 231.83 4 200.00 12 262.33
4 12 262.33 175.15 4 200.00 8 237.48
5 8 237.48 117.66 4 200.00 4155.14
6 4155.14 59.35 4 200.00 14.49

Practice
You purchased a laptop computer worth
PhP 37 500 by a 30% down payment and
agreed to repay the balance in 12 equal
monthly payments. There is a 10% simple
interest rate on this balance.
a. Find the finance charge
a. Find the amount of monthly

Remark payments
The APR allows consumers to compare loan terms. It a. Estimate the APR
also helps take out the confusion caused by a wide
variety of loan terms available in the market.

MONTHLY PAYMENTS

Example
A motorbike worth PhP 119 500 is purchased with a
20% down payment. The rest of the amount is to be
paid in equal amounts monthly for three years at 15%
APR. Find the monthly payment.
Solution

PRACTICE
The City Government borrowed money

with the sum of PhP 71,235,000.00 from
a mutual fund to finance its project of
repairing their gymnasium. This loan has
an APR of 8% and is to be paid in equal
amounts quarterly for 15 years. Calculate
the quarterly payment.

LOAN PAYOFFS
Sometimes, the customer would want to payoff
(pay the remaining balance) of a loan even
before its term ends. The most common reason
why people do this is so that they could avail or
open a new set of loan.
For example, if you still have 1 year remaining
term for a loan, and you want to take another
loan so you payoff this remaining year. This is
not as simple as just multiplying your monthly
payment by 12 because these payments are
assumed to have accumulated interests for the
next 12 months. But since these 12 months have
not yet arrived, interest should not be charged
on them.

Loan Payoff
Solution
Example
In the previous example, where you make monthly
payments of PhP 3 314.01 for the motorbike with 15%
APR, you decided to payoff the loan one year before
the term ends. Calculate the payoff amount.

5.3 CREDIT CARDS AND
CONSUMER LOANS ✔ Calculate finance charges on credit card
loans.
EXERCISES ✔ Calculate annual percentage rates.
✔ Calculate monthly payments for a
consumer loan.
1. A charge account had a balance of PhP ✔ Calculate the amount of payoff for a
944 on May 05. A purchase of PhP 255 consumer loan.
was made on May 17, and a payment of
PhP 150 was made on May 20. The
interest on the ADB is 1.5% per month.
Find the finance charge on the Jun 05 bill. SUGGESTED/POSSIBLE ACTIVITIES
2. Estimate the APR of a 25000-peso loan Name one product in the following category and research
with 9% advertised simple interest for their current price:
three equal monthly payments. • Daily essentials (food, soap, etc.)
3. A store sells their DSLR camera for PhP 47 • Price per square meter of land in their neighborhood
000. You make gave a 50% down
payment and will pay the rest monthly for • Expensive accessories such as jewelry, gadgets, etc.
18 months at 8% APR. Find the monthly
payment. Using the average inflation rate, estimate these prices in
10 years.
loans.
consumer loan.
1. A charge account had a balance of PhP ✔ Calculate the amount of payoff for a
944 on May 05. A purchase of PhP 255 consumer loan.
was made on May 17, and a payment of
PhP 150 was made on May 20. The
interest on the ADB is 1.5% per month. SUGGESTED/POSSIBLE ACTIVITIES
Find the finance charge on the Jun 05 bill.
Watch ABS News’ short feature documentary “Australian
2. Estimate the APR of a 25000-peso loan Debt Trap” at
with 9% advertised simple interest for
three equal monthly payments. https://www.youtube.com/watch?v=xTlvBoRRqUM
3. A store sells their DSLR camera for PhP 47 and write a reflection discussing:
000. You make gave a 50% down 1. Could a threat like the Australian debt trap also
payment and will pay the rest monthly for happen to Filipinos?
18 months at 8% APR. Find the monthly
payment. 2. How would you protect yourself from debt trap?

loans.
consumer loan.
1. Suppose you have a 4-year car loan at an ✔ Calculate the amount of payoff for a
APR of 7.2% and a monthly payment of consumer loan.
PhP 7,112.00. If you want to payoff this
loan 18 months before its scheduled end
of term, what will bet he payoff amount? SUGGESTED/POSSIBLE ACTIVITIES
Watch ABS News’ short feature documentary “Australian
Debt Trap” at
https://www.youtube.com/watch?v=xTlvBoRRqUM
and write a reflection discussing:
1. Could a threat like the Australian debt trap also
happen to Filipinos?
2. How would you protect yourself from debt trap?

5.4 STOCKS, BONDS, AND MUTUAL FUNDS
Stocks | Bonds | Mutual Funds
OBJECTIVES
• Understand basic concepts of the stock
market.
• Calculate interest payments on a bond.
• Calculate net asset value of a mutual

fund.
51
INVESTMENT SCHEMES
STOCK BOND MUTUAL FUND

A stock is a partial ownership of a A bond is an amount of money that a A mutual fund is a company that
company that investors can buy. corporation borrows from another party. purchases stocks and bonds to
increase its value.
The investors are stockholders who get a share The investor is a company that finances another The investors are individuals who let the
of the company’s profits or losses corporation, usually governments, and earns interest company handle their money to purchase stocks
from it. and bonds.

INVESTMENT SCHEMES
STOCK BOND MUTUAL FUND

ABC Corporation sells its stocks for PhP 10 The city government issues a bond with ABC Instead of buying stocks in the stock
each share. An investor buys 2,000 shares company worth PhP 5 million for a 1% interest market, an investor decides to put his
(for PhP 20 000). After a month, the price rate (called coupon) in 10 years. For each year money in the hands of professionals who
of each share went up to PhP 11.50. So the the city government pays ABC with the PhP 50 will be the ones to study and look for
investor could sell his shares for PhP 23 000 interest and after 10 years, ABC would investment opportunities. When the
000 (earning PhP 3 000). The investor receive the payment of the PhP 5 million bond. investment succeeds, the investor and the
may also earn from dividends. company share the profits.

STOCKS
Stocks are measured in shares. A share of
stock in a company is a certificate that
indicates partial ownership of the
company. The owners of the certificates
are called shareholders or stockholders.
To become a stockholder, an investor
should purchase stocks through a broker.
In the Philippines there are dozens of
brokerage companies and the Philippine
Stock Exchange requires all transactions
to be done through them. Brokers earn
commission for all the transactions they
serve for the investors.
There can be three ways for a someone to
earn from this investment scheme: cash
dividends, stock dividends, and buying
and selling of stocks.

CASH DIVIDENDS

STOCK DIVIDEND

BUYING AND SELLING SHARES
The Philippine stock market is managed by the Philippine Stock Exchange, Inc.

• Bid is the highest price someone is willing to buy
An investor can buy shares. Say he buys 100 BDO
a share (also called buyer’s price). Ask is the
shares at PhP 103.30 per share (so a total of PhP 10
lowest price someone is willing to sell his or her
330) and 1000 MBT shares at PhP 47.55 per share
share.
(so a total of PhP 47 550).
• Open is the price per share at the first trade of the
day (PSE opens 9AM). Close is the price per share
If he intends to sell all these shares at the end of the
at the last trade of the day (PSE closes 3:30PM).
day, notice that the closing price of his BDO shares
• High is the highest trade price per share attained
is PhP 103.30 which means he neither earned nor
during the day. Low is the lowest price in that
lost from these stocks.
day.
• Volume is the total number of shares traded
However, MBT price per share went up to 47.95.
during the day.
That means he could sell all 1000 shares for PhP 47
• Value is the total amount of all transactions
950. This leaves him earning PhP 400.00.
during the day (in PhP).

Stock prices move due to law of supply and demand. If more people
would want to buy stocks from a company, its demand would rise
causing the price to also move up. If more people would sell their
stocks, this could result in a surplus of supply causing the price to drop.
Supplies and demands also move depending on different factors. It

STOCK could be due to changing government policies such as when China
banned bitcoin in September 2017, there was a massive volume of
Buy when prices are low, sell when selling causing its price to drop instantly by 6%. When ABS-CBN failed
prices are high. to renew their franchise this year, a devastating price drop reaching 30’s
happened within two days, while its competitor, GMA-7 enjoyed almost
80% price hike within three weeks.

BONDS
Bonds are certificates issued by a corporation to
a company called a bondholder. Upon issuance
of the certificate, the bondholder will lend
money of a specified sum and with a specified
annual interest rate and duration to the issuing
corporation.
In the Philippines, PAG-IBIG or the Home
Development Mutual Fund (HDMF) is an
example of a bond. They sell bonds worth PhP
10,000.00 with a coupon rate of 5% per annum
for a term of 5 years and 1 day. Anyone can
invest and there is no limit on the number of
bonds purchased.
Coupons are earned semiannually directly
credited to the DBP or LBP account of the
bondholder.

Say for example you purchased 5 bonds from the
Pag-IBIG Fund. Calculate the total earnings you SOLUTION
received at the end of the term.

MUTUAL FUNDS
An investment trust is a company whose
assets are stocks and bonds. The purpose
of these companies is not to manufacture
a product or offer a service but to
purchase stocks and bonds with the hope
that their value will increase. A mutual
fund is an example of an investment trust.
The main feature of investing in a mutual
fund is that your money is managed by
full-time professionals whose job is to
research and evaluate stocks. That means
you own stocks without having to buy
them personally or decide when to sell
them.
These funds would buy stocks and bonds
from multiple companies diversifying
your funds.

MUTUAL FUNDS
•
A mutual fund has PhP 600 million worth of

stock, PhP 5 million worth of bonds, and PhP 1
million in cash. The fund’s total liabilities amount
to PhP 2 million. There are 25 million shares
outstanding. You invest PhP 15 000 in this fund.
Calculate the NAV. How many shares will you
purchase?

SOLUTION
•

5.4 STOCKS, BONDS, AND
MUTUAL FUNDS
EXERCISES ✔ Understand basic concepts of the stock

market.
✔ Calculate interest payments on a bond.
✔ Calculate net asset value of a mutual fund.
SUGGESTED/POSSIBLE ACTIVITIES
Invite a speaker from local brokerage companies or any
investment firm to share how investment in their
company works.

TEAM
ALEXANDER MARTENSSON VICTORIA LINDQVIST MIRJAM NILSSON ANGELICA ASTROM

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66
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CTU GEC TRAINING 2020

GEC – MMW Mathematics in the Modern World

CTU GEC Training 2020 | GEC-MMW Mathematics in the Modern World 3

Suppose Person A agrees to lend Person B

For instance, if Person A lends PhP 10,000

CTU GEC Training 2020 | GEC-MMW Mathematics in the Modern World 5

Calculate the simple interest on a loan of PhP 1000

CTU GEC Training 2020 | GEC-MMW Mathematics in the Modern World 6

CTU GEC Training 2020 | GEC-MMW Mathematics in the Modern World 7

MATURITY VALUE FUTURE VALUE

CTU GEC Training 2020 | GEC-MMW Mathematics in the Modern World 8

CTU GEC Training 2020 | GEC-MMW Mathematics in the Modern World 9

CTU GEC Training 2020 | GEC-MMW Mathematics in the Modern World 10

5.1 SIMPLE INTEREST

CTU GEC Training 2020 | GEC-MMW Mathematics in the Modern World 11

• Calculate present value.

• Estimate prices, purchasing power, and

• Calculate nominal and effective rates.

Most institutions apply simple interest only

The principle of this computation is that

CTU GEC Training 2020 | GEC-MMW Mathematics in the Modern World 13

CTU GEC Training 2020 | GEC-MMW Mathematics in the Modern World 14

CTU GEC Training 2020 | GEC-MMW Mathematics in the Modern World 15

• In reality, a 20% withholding tax is charged

Program A. 10% interest rate compounded quarterly

Present Value Formula

CTU GEC Training 2020 | GEC-MMW Mathematics in the Modern World 18

CTU GEC Training 2020 | GEC-MMW Mathematics in the Modern World 19

CTU GEC Training 2020 | GEC-MMW Mathematics in the Modern World 20

Inflation is an economic condition during

* 2020 data is based on a 10-month geometric average

CTU GEC Training 2020 | GEC-MMW Mathematics in the Modern World 21

CTU GEC Training 2020 | GEC-MMW Mathematics in the Modern World 22

CTU GEC Training 2020 | GEC-MMW Mathematics in the Modern World 23

In other words, 10 thousand pesos in 2050 is

Purchasing Power Formula

CTU GEC Training 2020 | GEC-MMW Mathematics in the Modern World 24

CTU GEC Training 2020 | GEC-MMW Mathematics in the Modern World 26

CTU GEC Training 2020 | GEC-MMW Mathematics in the Modern World 27

CTU GEC Training 2020 | GEC-MMW Mathematics in the Modern World 28

5.2 COMPOUND INTEREST

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5.2 COMPOUND INTEREST

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• Calculate annual percentage rates.

• Calculate monthly payments for a

• Calculate the amount of payoff for a

RA 3765 otherwise known as the “Truth in

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1) the cash price or delivered price of the

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6) the finance charge expressed in terms

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When a customer uses a credit card to

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• The due date on the bill is usually 1 month after

• If the bill is paid in full by the due date, the