Professional Documents
Culture Documents
Gen Math Q2
Gen Math Q2
Gen Math Q2
Quarter 2 – Module 1:
Simple and Compound
Interests
Republic Act 8293, section 176 states that: No copyright shall subsist in any
work of the Government of the Philippines. However, prior approval of the government
agency or office wherein the work is created shall be necessary for exploitation of such
work for profit. Such agency or office may, among other things, impose as a condition
the payment of royalties.
Borrowed materials (i.e., songs, stories, poems, pictures, photos, brand names,
trademarks, etc.) included in this module are owned by their respective copyright holders.
Every effort has been exerted to locate and seek permission to use these materials from
their respective copyright owners. The publisher and authors do not represent nor claim
ownership over them.
Office Address: Gate 2 Karangalan Village, Brgy. San Isidro Cainta, Rizal
Telefax: 02-8682-5773/8684-4914/8647-7487
E-mail Address: lrmd.calarbazon@deped.gov.ph
General Mathematics
Quarter 2 – Module 1:
Simple and Compound
Interests
Introductory Message
This Self-Learning Module (SLM) is prepared so that you, our dear learners,
can continue your studies and learn while at home. Activities, questions,
directions, exercises, and discussions are carefully stated for you to understand
each lesson.
Each SLM is composed of different parts. Each part shall guide you step-by-
step as you discover and understand the lesson prepared for you.
In addition to the material in the main text, Notes to the Teacher are also
provided to our facilitators and parents for strategies and reminders on how they
can best help you on your home-based learning.
Please use this module with care. Do not put unnecessary marks on any
part of this SLM. Use a separate sheet of paper in answering the exercises and tests.
And read the instructions carefully before performing each task.
If you have any questions in using this SLM or any difficulty in answering
the tasks in this module, do not hesitate to consult your teacher or facilitator.
Thank you.
What I Need to Know
Are you ready now? Let’s begin working on this module. Open your heart and mind
and have focus. Good Luck!
1
CO_Q2_General Mathematics_SHS
Module 1
What I Know
Dear students, I know that this is a new lesson for you I need you to be patient in
answering this to test what you already know about the lesson. Good luck!
Choose the letter of the best answer. Write the chosen letter on a separate sheet of
paper.
1. What interest remains constant throughout the investment term?
a. simple c. annuity due
b. compound d. ordinary annuity
2
CO_Q2_General Mathematics_SHS
Module 1
7. Which of the following formula can be used to solve for the simple interest?
a. I = Prt c. A= P(1 + rt)
Prt
b. SI = 100
d. All of the above
8. It is an amount after t years that the lender receives from the borrower on
the maturity date.
a. loan date c. maturity value
b. maturity date d. term
12. A person (or institution) who invests the money or makes the funds available.
a. Lender c. Both a and b
b. Creditor d. None of the choices.
13. It refers to an interest that is computed based on the principal and interest
accumulated every conversion period.
a. simple c. annuity due
b. compound d. ordinary annuity
14. It refers to the amount after � years that the lender receives from the borrower
on the maturity date?
a. present value c. interest
b. future value d. ordinary annuity
15.Which of the following formula can be used to solve for the compound interest?
r
a. A = P(1 + n )t c. C = P(1 + r)n − 1
r nt
b. A = P(1 + n
) d. Both a and b
3
CO_Q2_General Mathematics_SHS
Module 1
Lesson
1 Simple Interest
It’s quite difficult to pursue our dreams, especially during these trying times that
our country is experiencing the COVID-19 pandemic. Dream is just a dream until
you decide to make it happen. We can realize our dreams through perseverance,
patience, and determination. For now, continue to acquire new knowledge, develop
your skills, and cultivate your talents because these will be your weapon to succeed
in life.
I hope that you somehow encountered some math of investment terms like simple
interest, loans, savings, investments, maturity value, money, resources, and the
like. This lesson will help you understand simple interest. Different terminologies
about the simple interest that you can use for the succeeding lesson once you go
deeper on the problem solving about simple interest.
What’s In
A B
1. It is the amount of time in years the money is S. Creditor
borrowed or invested.
2. It is the date on which the total amount borrowed R. Time or Term
with interest is to be completely repaid.
3. It refers to the person or institution that invests C. Origin/Loan Date
the money or makes the funds available.
4. It is the amount of money borrowed or invested on E. Principal
the origin date.
5. It is the amount after t years that the lender P. Maturity date
receives from the borrower on the maturity date.
6. It is the date on which money is received by the T. Maturity/Future
borrower. Value
4
CO_Q2_General Mathematics_SHS
Module 1
What Filipino value is shown when a person giving the greeting bows down
towards another person older that him or taking his hand or her hand and
pressing it on the forehead? This is an important Filipino value that the
younger generations should never forget and performed with the right hand
and saying "Mano po" to the elders.
Guided Questions:
2. Based on the definition given will you able to know some important terms in
simple business math? If yes try to elaborate just one term.
.
3. Are all the terms given, important in finding simple interest? Justify your
answer. .
5
CO_Q2_General Mathematics_SHS
Module 1
What’s New
What Am I!
Read and analyze! Choose your answers among the principal, simple interest,
interest rate and term. Write your answer on the blank provided for each number.
1. I am the _____________________ which is calculated by multiplying the
principal, the rate of interest and the time in years.
2. I am the _____________________, and simple interest is computed based on me
and the time in years.
3. I am the _______________________, usually I am in percent and also called as
the rate of increase of interest.
4. I am the _______________________, and I am the length of time between the
origin and maturity dates.
Simply Saving!
Using the idea that you learned in the What I am? activity, try to answer the
problem below. If you find difficulty solving the problem, that is fine. Continue
reading this module and soon you will find the appropriate solution.
A working student in one of the biggest fast-food restaurants in Lucena City wants
to save for the upcoming school year. He wants to deposit his money into a Filipino
owned bank so that even in a simple way he can help his fellow Filipino. Supposed
his monthly salary is ₱10,000.00 and it was deposited to an account that earns a
simple interest of 2.75% per annum. Find the simple interest after 6 months, one
year, and 18 months.
What is It
The Name Me activity previously summarizes the definition of the following terms:
Lender or creditor – person (or institution) who invests the money or makes the
funds available
6
CO_Q2_General Mathematics_SHS
Module 1
Borrower or debtor – person (or institution) who owes the money or avails of the
funds from the lender
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 (P) – amount of money borrowed or invested on the origin date
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
To solve the problem in the Simply Saving activity which is a common scenario
among Filipino working students wherein many can relate.
You can solve this problem using the simple interest formula
�� = ���
where:
Is = Simple Interest
P = Principal or amount invested or borrowed
r = simple interest rate
t = term of time in years
Here are the steps to find the simple interest:
Step 1: Identify the given and the unknown
P = ₱10,000.00
r = 2.75% or 0.0275
6 18
t =0.5 or 12
(6 months), 1 (1 year), 1.5 or 12
(18 months)
Is = ?
Step 2: Substitute the given to the formula
Is = Prt
For 18 months
Is = (₱10,000.00) (0275) (1.5)
= ₱412.50
7
CO_Q2_General Mathematics_SHS
Module 1
Notice that the time is divided into 12 since there are 12 months in a year. You will
also do the same if the given is in days, the divisor will be 360 for ordinary interest
or 365 if you are looking for exact interest. Don’t worry because it will be
indicated in the problem if you will compute for the ordinary or exact interests but
if not indicated always use the ordinary interest which consists of 360 days. In case
that the given time is in years then multiply it as is.
Now that you have the idea of how to solve simple interest study the example below.
Example
Problem Solving: Due to COVID-19 pandemic Miss Dada a female resident of Brgy.
May Pagkakaisa somewhere in Quezon Province thinks of a business that can
provide for her needs as well as the need of her neighbors so she can be of help
even in this trying time.
Since she doesn’t have money on hand, she decided to borrow from a bank as the
start-up capital of ₱50,000.00 at 7% simple interest rate payable within 5 years.
Compute for the interest yield.
Solution.
Simple Interest
Notice the simple interest remains constant throughout the year and you only
multiply with the term that you are computing. Therefore, if you are a borrower
make sure that the interest on your loan is not too high. Try to compute it first
before you apply for a loan. Compare first the interest and the term of the different
lending institutions before you decide to consider a loan or investment.
8
CO_Q2_General Mathematics_SHS
Module 1
What is It
Activity 1.1
Write the word TRUE if the statement is correct, otherwise write FALSE on a
separate answer sheet. If your answer is FALSE write the word or phrase that will
make the statement correct.
Activity 1.2
Match the corresponding term/formula in column B with its definition in column A.
Write letter only on the blank provided for each number.
A B
___1. It is the amount that is charged a. �� = ���
for the privilege of borrowing
money.
___2. It refers to a person or institution b. Principal
who owes money.
___3. It is the amount of money c. � = �(1 + �)�
originally invested or borrowed.
___4. It is the formula for computing d. Lender/Creditor
simple interest.
___5. It refers to the person/institution e. Interest
who made the funds available.
f. Borrower/Debtor
Activity 1.3
Solve the following problems.
A couple with three children are peacefully living in a barangay near the City
proper. The husband is a government employee while the wife is a rug sewer. They
always remind their children about this: “Bilhin and kailangan at huwag
kailanganin ang hindi kayang bilhin”. Because of this teaching, the children open a
joint account to a certain cooperative to have a better investment. The total amount
they earned in selling rugs, was put in their account in the cooperative to help their
parents. Their total earnings amounting to ₱ 5,000.00 will earn an interest rate of
7.5% per year. Help them to compute for the simple interest earned and maturity
value, if their money will be invested in 3 years.
9
CO_Q2_General Mathematics_SHS
Module 1
What I Have Learned
A. Please read the sentences carefully and fill in the missing word/s by writing your
answer on the blanks provided.
1. Some who have the privilege of using a fund and promise to pay at some future
date is called ________________________________.
2. The amount that will be received at maturity date is the_____________________.
3. Simple interest is the interest computed on the the ______________________.
4. The date on which the loan amount is to be fully paid is called _____________.
5. ___________________is the amount calculated on the initial principal and with
fixed interest throughout the periods or term.
What I Can Do
Read and analyze the situation below then answers the question given.
10
CO_Q2_General Mathematics_SHS
Module 1
Your output will be graded, according to this rubric.
Criteria 4 3 2 1
Comprehension Identify, analyze Identify, analyze Identify, Identify, analyze
and understand and understand analyze and and understand
all of the main most of the understand few of the main
issues in the main issues in some of the issues in the
study the study main issues in problem solving
the study
Accuracy of the With a complete With the correct With some data Incomplete and
solution and accurate answer but the missing to incorrect
solution. incomplete complete the solution.
solution solution,
Analysis Insightful and Thorough Seeming Incomplete
thorough analysis and analysis and analysis and
analysis and exploration of exploration of exploration of the
exploration of the questions the questions questions asked
the questions asked asked
asked
Filipino Values With at least With two With one Without Filipino
three Filipino Filipino values Filipino value value that related
values which are which are which is to the problem
significant and significant and significant and
related to the related to the related to the
problem problem problem
11
CO_Q2_General Mathematics_SHS
Module 1
Lesson
2 Compound Interest
This lesson will lead you to understand another type of earning interest, the
compound interest. If you understood the simple interest in the previous lesson,
this lesson will give you knowledge of how simple interest differs from compound
interest. This will lead you to compare your investment in the future from different
options. It will also help you to make wise decisions if you will apply for loans from
a bank to start your own business or if you need funds for emergency purposes.
Being financially literate is also a skill that will help you to become successful in
handling money and eventually lead you to a good life.
What’s In
A B
1. It is the amount paid or earned for the use of O. Borrower/Debtor
money.
2. It refers to the person or institution who N. Compound Interest
owes money or avails of the funds from the
lender.
3. It is the interest computed on the principal T. Interest
and also on the accumulated past interest
4. It is the percentage of the principal that will C. rate of interest
be changed for a specified period of time.
5. It refers to maturity value. U. Future Value
12
CO_Q2_General Mathematics_SHS
Module 1
This is one of the fruit bearing trees found in the Philippines. We are also
second to the highest exporter of this product all over the world. It is also
traditionally called “the tree of life” because all the parts of this tree has
varied uses, from housing materials, novelty items up to food products.
Guide Questions:
2. Based on the definition given will able to know some important terms in
compound interest? If yes. name those terms.
The activity gives you a glimpse of what the lesson is all about. It is all about
compound interest and what makes this interest differ from the simple interest
What’s New
13
CO_Q2_General Mathematics_SHS
Module 1
Are you confident about your answer? Are you generous enough to share your
answer and help your classmates to answer each item correctly? Or do you think
you still need help from your classmates? If you are still in doubt, don’t worry, the
next discussion will give your ideas of the correct answer.
What is It
Compound interest (�� ) is the interest computed on the principal and also on the
accumulated past interest, so compound interest is a way to earn money because
you don’t just earn using your original money, but also the interest you earned.
Are you familiar with credit cards? We have what we call “Perma-Debt” which
means a continuous outstanding balance of a credit card where they pay the
monthly minimum that fits in their budget to lessen the burden of interest monthly
but tries to add some debt again on the following month so the debts never end. So
why did I tell you this? If you are a debtor, compound interest is not good for you.
Better yet pay your debt in full the soonest possible so that the burden of interest
will not be on your shoulder. Conversely, if you are an investor, compound interest
is your best buddy and it is better to invest in a long period of time for you to have
a greater return of your investment through interest earned. So, if you have the
means or a way to save and invest early, you must consider it as soon as possible
for you to gain more money in the future.
Now, that you already know how to solve simple interest. Study the example below
and compare this to the example given in Lesson 1. (Note: Same problem was given
here to compare the interest earned in simple and compound interests)
Example
Problem Solving: Due to COVID-19 pandemic Miss Dada a female resident of Brgy.
May Pagkakaisa somewhere in Quezon Province thinks of a business that can
provide for her needs as well as the need of her neighbors so she can be of help
even in this trying time.
14
CO_Q2_General Mathematics_SHS
Module 1
Since she doesn’t have money on hand, she decided to borrow from a bank with a
start-up capital of ₱50,000.00 at 7% interest rate compounded annually and
payable within 5 years. Compute for the interest yield.
Solution.
Compound Interest
Compound interest includes the interest from the current year and added on the
principal at the start of the following year, which means that the previous interest
earns interest as well, together with the principal until fully paid. So the interest
yielded on simple interest is lower than the compound interest. The amount at the
end of 5 years in simple interest is ₱67,500.00 while in compound interest it is
₱70,705.39. Therefore, if you are a borrower make sure that the interest on your
loan is not too high if you will find a lender that offers simple interest better grab it
that a lender who offers compound interest. On the other hand, if you are an
investor learn to invest your money to an interest that will yield higher returns like
compound interest. If you will be a lender in the future, I hope that you will not be
abusive regarding the interest, be reasonable, and act generously by helping others
who needed you the most.
Notice that the formula to find the future value in a compound interest is given by
� = �(1 + �)�
where:
� = future value
� = principal amount
� = compound interest rate
� = time or time in years
Also, to find the compound interest just deduct the principal (P) from the computed
future value (F). In the next module, you will encounter a situation where interest
will be compounded more than once a year.
15
CO_Q2_General Mathematics_SHS
Module 1
What’s More
Activity 2.1
Write the word TRUE if the statement is correct; otherwise write FALSE on a
separate answer sheet. If your answer is FALSE, write the word or phrase that will
make the statement correct.
Activity 2.2
Your father asked you about investment and wanted to know the interest that will
be earned if he will invest ₱500,000.00 in a certain bank that offers an annual
compounding interest of 8% for 5 years.
16
CO_Q2_General Mathematics_SHS
Module 1
What I Have Learned
A. Please read the sentences carefully and fill in the missing word/s by writing your
answer on the line/s provided.
1. The amount calculated on the principal and accumulated interest from previous
periods on a deposit or loan is ___________________________.
2. Compound interest yields _______________ amount than simple interest.
3. If you are an investor, it is better to invest your money in ____________________.
4. If you are borrower it is better to borrow money in a lender who offers
__________________.
5. Debt using credit cards is an example of _________________.
What I Can Do
Read and analyze the situation below then answers the question given.
The effect of COVID-19 pandemic has overwhelmed everyone. Nobody expected that
it will occur in the early year of the 21st century. It has affected the health,
economy, education, and lives of many people around the world. It is during these
hard times that we need to show our deepest concern not only to ourselves, and to
our family but our government as well. By simply following the safety precautions
against the coronavirus like staying at home, wearing face mask and shield
properly, and observing social distancing, we can show our support in fighting to
end this pandemic.
Now, everyone including you can help amidst pandemic or any kind of calamity if
you have the basic knowledge of value investing.
Assuming that somebody from your family is planning to borrow money from a
bank or institution to start a business. You are asked to help him to look for a
bank or lending institution that could offer the lowest interest rate. List all the
necessary information and possible lending institutions by researching within your
community. Identify the interest rate offered by different institutions and the rules
and regulations when it comes to payment. Compare their offers and decide on the
best lender where you can borrow funds. Submit a short report of your research.
17
CO_Q2_General Mathematics_SHS
Module 1
Here is the rubric that will serve as your guide to finish the task.
Criteria 4 3 2 1
Knowledge Demonstrate Demonstrate Demonstrate Demonstrate
about a systematic an a partial a little
compound understanding understanding understanding understanding
interest when deciding when deciding when deciding when deciding
with regards with regards with regards with regards
to value to value to value to value
investing investing investing investing
using using using using
compound compound compound compound
interest interest interest interest
18
CO_Q2_General Mathematics_SHS
Module 1
Assessment
Multiple Choice. Choose the letter of the best answer. Write the chosen letter on a
separate sheet of paper.
1. Which interest is computed on the principal and then added to it?
a. simple c. annuity due
b. compound d. ordinary annuity
2. The simple interest formula is I = Prt. What does the t represent?
a. principle c. interest
b. time d. percent rate
3. All of the following are used to find simple interest, EXCEPT?
a. principal c. time
b. rate of interest d. future value
4. It is the amount after t years that the lender will receive from the borrower.
a. future Value c. interest
b. present Value d. principal
5. Which of the following describes rate (r)?
a. It is the amount of money borrowed or invested on the origin date.
b. It is the amount paid or earned for the use of money.
c. It is charged by the lender, or rate of increase of the investment
d. It is computed on the principal and also on the accumulated past
interests.
6. Rate of interest must be converted into ________ before substituting to the
formula of finding the interest.
a. fractions c. mixed numbers
b. decimals d. percentage
7. The principal in the formula I = Prt is ___________________.
a. the amount of money borrowed or deposited
b. the percent interest for his year
c. the amount taxed
d. the amount the bank owes you for being a customer at their bank
8. The interest from the previous year also earns interest, which of the following
describes the statement?
a. simple c. rate
b. compound d. time
9. Variable P in simple interest formula when you are the creditor stands for?
a. Original Amount borrowed c. Maturity Amount Borrowed
b. Original Amount invested d. Maturity Amount invested
10. The following statements are true EXCEPT ________.
a. The amount invested to a compounded interest yields to greater
maturity value than to a simple interest.
b. The amount borrowed from a simple interest yields to a smaller
maturity value than a compound interest
c. The simple interest yields interest only from initial principal amount.
d. The interest in a compound account yields interest only from initial
principal amount.
19
CO_Q2_General Mathematics_SHS
Module 1
11. Compound interest is favorable to the following except?
a. investor of a retirement fund
b. person who saves in bank
c. investor of stocks
d. borrower of a loan
12. Which of the following will yield a higher interest?
a. Investing in a bank that offers a simple interest rate of 10%
annually for 2 years
b. Investing in a cooperative that offers an interest rate of 10%
compounding annually for 2 years
c. Saving money in a piggy bank for 2 years
d. Both a and b
13. What formula can be used to find maturity (future) value of a compound
interest?
a. F = P + I c. Both a and b
�
b. F = (1 + �) d. None of the choices.
14. What interest is computed on the principal and also on the accumulated past
interests?
a. simple c. annuity due
b. compound d. ordinary Annuity
15. Which of the following can be used to find compound interest?
F
a. I = F – P c. P = (1+r)t)
b. F= P(1+r)t d. I = Prt
Additional Activities
1. Supposed that a local farmer wants to borrow money from Landbank of the
Philippines to start the organic farming in his one (1) hectare of agricultural land.
The farmer needs ₱ 150,000.00 as start-up capital. The bank offers him 10%
interest rate compounded annually. Compute for the total amount to be paid
every year for 5 years. Show your answer in tabular form.
2. A private school teacher plans to apply for a housing loan in the Home Mutual
Development Fund or Pag-ibig. It offers her a loan amounting to ₱1,500,000.00,
considering all the rules and regulations regarding the policy with 6.5% interest
per annum payable within 15 years. Compare the maturity value if interest will
be paid using simple interest and/or compound interest compounded yearly.
Please use the model table shown in this module to compute and compare the
interest.
20
CO_Q2_General Mathematics_SHS
Module 1
Answer Key
21
CO_Q2_General Mathematics_SHS
Module 1
References
*DepED Material: General Mathematics Learner’s Material
22
CO_Q2_General Mathematics_SHS
Module 1
For inquiries or feedback, please write or call:
Republic Act 8293, section 176 states that: No copyright shall subsist in any work of
the Government of the Philippines. However, prior approval of the government agency or office
wherein the work is created shall be necessary for exploitation of such work for profit. Such
agency or office may, among other things, impose as a condition the payment of royalties.
Borrowed materials (i.e., songs, stories, poems, pictures, photos, brand names,
trademarks, etc.) included in this module are owned by their respective copyright holders.
Every effort has been exerted to locate and seek permission to use these materials from their
respective copyright owners. The publisher and authors do not represent nor claim ownership
over them.
Office Address: Gate 2 Karangalan Village, Brgy. San Isidro, Cainta, Rizal
Telefax: 02-8682-5773/8684-4914/8647-7487
E-mail Address: lrmd.calabarzon@deped.gov.ph
General Mathematics
Quarter 2 – Module 2:
Interest, Maturity, Future,
and Present Values in Simple
and Compound Interests
Introductory Message
This Self-Learning Module (SLM) is prepared so that you, our dear learners,
can continue your studies and learn while at home. Activities, questions, directions,
exercises, and discussions are carefully stated for you to understand each lesson.
Each SLM is composed of different parts. Each part shall guide you step-by-
step as you discover and understand the lesson prepared for you.
In addition to the material in the main text, Notes to the Teacher are also
provided to our facilitators and parents for strategies and reminders on how they can
best help you on your home-based learning.
Please use this module with care. Do not put unnecessary marks on any part
of this SLM. Use a separate sheet of paper in answering the exercises and tests. And
read the instructions carefully before performing each task.
If you have any questions in using this SLM or any difficulty in answering the
tasks in this module, do not hesitate to consult your teacher or facilitator.
Thank you.
What I Need to Know
On your previous module, you have already illustrated and distinguished the
difference between simple and compound interests. A deeper analysis of this topic
will be the focus of this module wherein the relationships among the variables in
solving the simple and compound interest will be explored.
You will realize the importance of deriving a certain formula to compute the required
variable involved in interest. The connection among interest, principal or present
value, rate, time and maturity value will be reiterated. This topic will also revolve
around money and since it is talking about money you will learn more on how to
make decisions that concerns about it.
Are you now ready for the new lesson, if so you may proceed to this module and
have fun while learning.
1
CO_Q2_General Mathematics SHS
Module 2
What I Know
Let’s find out how far you might already know about this topic by answering the
assessment below.
Choose the letter of the best answer. Write the chosen letter on a separate sheet of
paper.
1. Which of the following is the formula to find the simple interest?
a. 𝐼𝐼𝑠𝑠 = 𝑃𝑃𝑃𝑃𝑃𝑃
b. 𝐼𝐼𝑠𝑠 = 𝑃𝑃(1 + 𝑟𝑟)𝑡𝑡
c. 𝐼𝐼𝑠𝑠 = 𝐹𝐹 − 𝑃𝑃
𝐹𝐹
d. 𝐼𝐼𝑠𝑠 =
(1+𝑟𝑟)𝑡𝑡
2. What formula will be used to find the present value of simple interest?
a. 𝑃𝑃 = 𝐼𝐼𝑠𝑠 𝑟𝑟𝑟𝑟
𝐼𝐼𝑠𝑠
b. 𝑃𝑃 =
𝑟𝑟𝑟𝑟
𝑟𝑟𝑟𝑟
c. 𝑃𝑃 =
𝐼𝐼𝑠𝑠
𝐼𝐼 𝑟𝑟
d. 𝑃𝑃 = 𝑠𝑠
𝑡𝑡
3. If the investment amounting to ₱35,000 earned an interest of ₱2,500 how much
will be the maturity value?
a. ₱32,500
b. ₱37,500
c. ₱30,000
d. ₱40,000
4. Given that P = ₱5,250, r = 1.25% and t = 5 years, find the simple interest.
a. ₱32,812.50
b. ₱3,281.25
c. ₱328.13
d. ₱32.82
1
5. Given that P = ₱10,500, r = 4 % and t = 8 months, find the simple interest.
2
a. ₱315
b. ₱3,150
c. ₱3,780
d. ₱31,500
6. Which of the following is the formula to find the compound interest?
a. 𝐼𝐼𝑐𝑐 = 𝑃𝑃(1 + 𝑟𝑟)𝑡𝑡
b. 𝐼𝐼𝑐𝑐 = 𝐹𝐹 − 𝑃𝑃
𝐹𝐹
c. 𝐼𝐼𝑐𝑐 =
(1+𝑟𝑟)𝑡𝑡
𝑖𝑖 𝑚𝑚 𝑚𝑚𝑚𝑚
d. 𝐼𝐼𝑐𝑐 = 𝑃𝑃(1 + )
𝑚𝑚
2
CO_Q2_General Mathematics SHS
Module 2
7. What is the frequency of conversion if the annual rate is compounded quarterly?
a. 2 c. 4
b. 3 d. 12
8. If the interest rate is 5% compounded monthly, what is the interest rate per
conversion period?
a. 2.5% c. 1.25%
b. 1.67% d. 0.42%
9. Given that 𝐼𝐼𝑠𝑠 = 750, r = 5% and t = 3 years, what is the principal or present
value?
a. ₱50
b. ₱500
c. ₱5.000
d. ₱50,000
10. If F = ₱25,000 and P = ₱20,000, how much is the compound interest?
a. ₱45,000
b. ₱25,000
c. ₱20,000
d. ₱5,000
For numbers 11 – 12, use the following values: F = 40,000, t = 3 ½ years, 𝑖𝑖 4 = 0.10
and m= 4
11. What is the present value?
a. ₱30, 000.25
b. ₱28, 309.09
c. ₱25, 307.15
d. ₱20, 432.75
12. How much is the compound interest?
a. ₱9,999.75
b. ₱11,690.91
c. ₱14,692.85
d. ₱19,567.25
13. If the maturity value is ₱23,000 and the compound interest is ₱3,500, how
much is the present value?
a. ₱26,500
b. ₱23,000
c. ₱19,500
d. ₱15,000
For numbers 14 – 15, use the following values: P = ₱15,000, 𝑖𝑖12 = 5%, t = 4 years, m
= 12.
3
CO_Q2_General Mathematics SHS
Module 2
Lesson Interest, Maturity, Future,
1 and Present Values in
Simple Interest
Business transactions are common events we experienced in our daily lives like
banking, financing, marketing and pawning activities which involves withdrawals,
deposits, used of credit cards and others. When these transactions occur there are
two parties involved the lender and the borrower hence there involves a particular
amount which we call interest.
Everything that we have right now is just borrowed, our talents, jobs, and even our
lives. God is the sole person who does not charge interest from what He lent.
However, the money that we borrowed or loaned from others once paid earned an
interest which will be tackled in this module.
What’s In
For you to begin consider the previous lesson essential in obtaining success in this
module. In the last module, you differentiate simple and compound interest.
Simple interest is computed by multiplying the principal (P) by the rate (r) and the
length of time (t) (I=Prt) while compound interest is computed on the principal plus
the accumulated past interests.
Different terms related to simple and compound interest were also given emphasis
such as the lender or creditor which refers to the person who invests or makes funds
available and the borrower or debtor, which refers to the person who owes the
money.
Moreover, different terms essential in the interest formula were also explained such
as time or term, principal or present value, rate, and maturity value. However,
additional terms for compound interest were also given importance such as
frequency of conversion, nominal rate, and rate of interest for each conversion period.
These terms will be useful for you to have a better grasp of this module.
4
CO_Q2_General Mathematics SHS
Module 2
Other skills such as expressing percent to decimals is also necessary for example:
1. 12% - 0.12
2. 10.5% - 0.105
3. 300% - 3
1
4. 8 % - 0.85
2
What’s New
5
CO_Q2_General Mathematics SHS
Module 2
Jamaica: No, I saved up my allowance to accumulate enough money to buy this
phone. I am still using my old phone. I will use my new phone for my social media
accounts.
Janice: Oh! We are almost the same, I also saved ₱2,300 (already) from my allowance
Jamaica: What (do you plan) will you buy from your savings?
Janice: My old cellphone is still working, so I think there is no need for me to buy a
new one. It will be better if I save this money.
Jamaica: But your money might get lost if you will not spend it?
Janice: I saw from an advertisement in Cooperative Bank that the minimum amount
to open an account for students is ₱2,000, and they call it Kid Savers.
Janice: According to the advertisement there will be 2.5% interest in a year. I will use
it in my college education.
Questions:
6
CO_Q2_General Mathematics SHS
Module 2
What is It
From the previous conversation, you can say that allowance is one of the sources of
funds of ordinary students. A person may decide on what they want to do with their
money. In the scenario, there are two kinds of students. One who saves to buy the
things they wanted and the other one saves to invest for her future. In doing so
investing money in the bank earns interest. In computing the simple interest and
other related components, the formula is
𝐼𝐼𝑠𝑠 = 𝑃𝑃𝑃𝑃𝑃𝑃
where:
Is = simple interest
P = principal or the amount invested or borrowed or present value
r = simple interest rate
t = time or term in years
𝐼𝐼𝑠𝑠
𝑃𝑃 =
𝑟𝑟𝑟𝑟
𝐼𝐼𝑠𝑠
𝑟𝑟 =
𝑃𝑃𝑃𝑃
7
CO_Q2_General Mathematics SHS
Module 2
To find the maturity (future) value, you can use either of the following:
where:
F = maturity (future) value
Is = simple interest
P = principal or the amount invested or borrowed or present value
r = simple interest rate
t = time or term in years
Let us take the following for example:
Example 1: Given: 𝑃𝑃 = ₱18, 500, 𝑟𝑟 = 0.03, 𝑡𝑡 = 5. Find simple interest (𝐼𝐼𝑠𝑠 )
Solution:
Use the formula of Simple Interest 𝐼𝐼𝑠𝑠 = 𝑃𝑃𝑃𝑃𝑃𝑃
Substitute the given to the formula 𝐼𝐼𝑠𝑠 = 18,500(0.03)(5)
Performing the operation 𝐼𝐼𝑠𝑠 = ₱2,775
Therefore, the simple interest is ₱2,775
Solution:
𝐼𝐼
Use the formula in finding the time 𝑡𝑡 = 𝑃𝑃𝑃𝑃𝑠𝑠
700
Substitute the given to the formula 𝑡𝑡 = (40000)(0.07)
8
CO_Q2_General Mathematics SHS
Module 2
Example 4: Given: 𝑃𝑃 = ₱15,000, 𝑡𝑡 = 4 months, 𝑟𝑟 = 2%. Find maturity (future) value (𝐹𝐹).
Solution:
Is = 100
Use the formula 𝐹𝐹 = 𝑃𝑃 + 𝐼𝐼𝑠𝑠 F = 15,000 +100
Therefore, the maturity value is ₱15,100
What’s More
Activity 1.1
1. If P = ₱4,500, r = 1.25% and t = 5 years, find the simple interest.
Activity 1.2
9
CO_Q2_General Mathematics SHS
Module 2
Find the value of the required components in each item.
1. Find the simple interest and maturity value if P = ₱13,000, r = 0.8% and t=
2 ½ years.
Activity 1.3
Complete the table below by finding the unknown.
Guide Questions:
10
CO_Q2_General Mathematics SHS
Module 2
Read the paragraph carefully and supply the missing term/s in the blanks that will
make it logical.
In doing a business transaction one of the essential things to consider is the interest
because it will be the basis whether you have gained or lost. When the interest is
computed based on the principal it is called ______________ its formula is
______________. There are other components included in the simple interest formula
such as principal or present value, rate, time, and maturity value. In finding the
principal the formula ______________ will be used. Meanwhile the rate must be
expressed in ________ and in finding its value given the simple interest, principal and
time you will use the formula__________. Moreover, time should be expressed in
________. In a simple interest environment, the formula to be used in finding the time
is _____________. Lastly maturity value can be obtained by adding the __________ and
_________ or if the simple interest is not given you can use the formula
___________________.
What I Can Do
Money Matters
Read and analyze the situation below, then answer the question that follows.
You are a new accounts clerk in Lucena Metropolitan Bank where you met Mr. and
Mrs. Smith who are planning for the education of their children in the future. You
introduce to them the advantage of time deposit having the following features:
The couple has an initial amount of ₱50,000 to be deposited. To help the couple in
deciding the terms of their investment make a proposal by completing the table
below.
PROPOSAL
11
CO_Q2_General Mathematics SHS
Module 2
₱50,000
Aside from the amount to be yielded at the end of each term what are the other
factors that you can consider?
List down the possible questions that you will ask to the couple to determine those
factors.
______________________________________________________________________________
______________________________________________________________________________
Is there any disadvantage in choosing each term? What are those?
______________________________________________________________________
______________________________________________________________________
What advice or tips can be given to the couple in choosing the term of interest?
_______________________________________________________________________
_______________________________________________________________________
12
CO_Q2_General Mathematics SHS
Module 2
Lesson Interest, Maturity, Future,
2 and Present Values in
Compound Interest
The previous lesson reiterates the importance of simple interest in a certain
transaction. Interest is a natural event in a business transaction, however not all
interest is classified as simple interest some of them are considered compound
interest.
This lesson will delve into compound interest and the different components involved
in it such as present value and maturity value.
What’s In
For you to begin considering the lesson on the previous module which is essential
in obtaining success in this lesson. Compound interest is not like a simple interest
wherein only the principal is considered in the computation this type of interest
considers the principal and the accumulated past interest. The frequency of
conversion, nominal rate, and rate of interest for each conversion period will also
play an important role in this lesson.
In the previous lesson the maturity value is computed using the formula 𝐹𝐹 = 𝐼𝐼𝑠𝑠 + 𝑃𝑃
where F is the future value , Is is the simple interest and P the present value or the
Principal and to find the principal or present value given the interest and maturity
value the formula 𝑃𝑃 = 𝐹𝐹 − 𝐼𝐼𝑠𝑠 can be employed.
Let us take the following example.
Example 1: Given: P = ₱35,000 and Is = ₱ 4,000, find F.
Solution: F
Solution:
P = ₱23,000 - ₱2,000 b= ₱21,000
13
CO_Q2_General Mathematics SHS
Module 2
What’s New
Let’s Save
Initially at t = 0 ₱100,000
at t = 1 ₱100,000 (1.03) = ₱103,000
at t = 2 ₱103,000 (1.03) = ₱106,090
at t = 3 ₱106,090 (1.03) = ₱109,272.70
14
CO_Q2_General Mathematics SHS
Module 2
Questions
1. Is Michael’s computation correct?
____________________________________________________________
3. How much is the difference in the total amount to be paid between Michael’s
computation and the bank’s computation?
______________________________________________________________
4. Why do you think the bank’s computation yielded more interest?
______________________________________________________________
5. Do you think the bank committed an error in the computation of the amount
to be paid?
______________________________________________________________
6. If the term of payment will be longer what do you think will happen between
the difference of the amount to be paid in Michael’s computation and the
bank’s computation?
_________________________________________________________________
7. If you are Michael and you follow the computation made by the bank do you
think there is a way to lessen the amount to be paid at the end of 3 years?
How?
________________________________________________________________
________________________________________________________________
15
CO_Q2_General Mathematics SHS
Module 2
What is It
Notice that there is a difference between the computation of Michael and the bank
concerning the amount to be paid for the loan. Michael used simple interest to find
the amount to be paid for the loan for three years. While the bank computed first the
interest for the first year and added it to the loan amount, then the resulting amount
becomes the basis for computing the total amount to be paid for the second year,
and it follows the same pattern for the third year. Interest plays a major role in
computation because it became one of the factors in determining the amount to be
paid for the succeeding years. In such a case, we call that compound interest. To
better understand of what compound interest is, the following formulas will be
considered.
To find the compound interest, which is compounded annually the formula to find
the maturity value is:
𝐹𝐹 = 𝑃𝑃(1 + 𝑟𝑟)𝑡𝑡
where:
F = maturity (future) value
P = principal or present value
r = interest rate
t = term or time in years
𝐼𝐼𝑐𝑐 = 𝐹𝐹 − 𝑃𝑃
where:
𝐼𝐼𝑐𝑐 = compound interest
P = principal or present value
F = maturity (future) value
To find the present value or principal of the maturity value F due in t years the
formulas are:
𝐹𝐹
𝑃𝑃 = 𝑃𝑃 = 𝐹𝐹(1 + 𝑟𝑟)−𝑡𝑡
(1 + 𝑟𝑟)𝑡𝑡 or
16
CO_Q2_General Mathematics SHS
Module 2
Example 1: Given: P= ₱18,500, r = 3% and compounded annually for 3 years, find
the maturity value (F) and the compound interest (Ic ).
Solution:
Use the formula of maturity value 𝐹𝐹 = 𝑃𝑃(1 + 𝑟𝑟)𝑡𝑡
Substitute the value of F that you get and P 𝐼𝐼𝑐𝑐 = 20,215.45 − 18500
15000
Substitute the given to the formula 𝑃𝑃 =
(1+0.02)4
17
CO_Q2_General Mathematics SHS
Module 2
Study the table below.
Situations m N 𝑖𝑖 𝑚𝑚 j
2% compounded Annually m =1, t = 3 𝑖𝑖1 = 0.02 𝑖𝑖 𝑚𝑚
𝑗𝑗 =
annually for 3 𝑚𝑚
m=1 n = (1)(3)=3
years 0.02
𝑗𝑗 = = 0.02
1
Since the rate for each conversion period is represented by j, then in t years, interest
is compounded mt times. Thus, the formula of Maturity Value for interest
compounding m times a year is:
𝐹𝐹 = 𝑃𝑃(1 + 𝑗𝑗)𝑛𝑛
where:
F = maturity value
P = present value
𝑖𝑖 (𝑚𝑚)
j=
𝑚𝑚
n = mt
Meanwhile, the formula in finding the present value given the maturity value is:
𝐹𝐹
𝑃𝑃 =
(1 + 𝑗𝑗)𝑛𝑛
18
CO_Q2_General Mathematics SHS
Module 2
Let us take the following for example:
Example 3: Given 𝑃𝑃 = ₱50,000.00, 𝑖𝑖 4 = 0.03, 𝑚𝑚 = 4, 𝑡𝑡 = 4, find F and Ic .
Solution:
Use the formula of maturity value 𝐹𝐹 = 𝑃𝑃(1 + 𝑗𝑗)𝑛𝑛
Solution:
𝐹𝐹
Use the formula for Present value 𝑃𝑃 =
(1+𝑗𝑗)𝑛𝑛
19
CO_Q2_General Mathematics SHS
Module 2
What’s More
Activity 2.1
Read each statement and answer the question that follows.
1. If P = ₱85,500, and r = 1.25% compounded monthly for 1 year, find the
compound interest.
2. If F = ₱50,000 with the rate 1.5% compounded quarterly for 5 years find the
present value and compound interest
What formula will you use in finding the present value? ____________
20
CO_Q2_General Mathematics SHS
Module 2
Activity 2.2
1. Find the compound interest and maturity value if P = ₱43,000, with a rate of
5% is compounded semi-annually for 6 years.
2. Find the compound interest and present value if F = ₱105,000 with a rate of
2.5% is compounded quarterly for 3 years
Activity 2.3
Complete the table below by finding the unknown.
Present Nominal Interest Interest Time in Total Compound Maturity
Value rate (i(m)) compounded per years number of Interest Value
conversion conversions
period (j) (n)
60,000 3% quarterly 3
6% semi- 4 40,000
annually
Guide Questions:
For the first set of values
a. What unknown variable will you solve first?
b. How are you going to find j?
c. What will be n?
d. How much is the maturity value?
e. How much is the compound interest?
For the second set of values
a. What unknown variable will you solve first?
b. How are you going to find j?
c. What will be n?
d. How much is the maturity value?
e. How much is the compound interest?
Activity 2.4
Complete the table below by finding the unknown.
Present Nominal Interest Interest Time in Total Compound Maturity
Value rate (i(m)) compounded per years number of Interest Value
conversion conversions
period (j) (n)
78,000 4% quarterly 6
12% monthly 3 50,000
21
CO_Q2_General Mathematics SHS
Module 2
What I Have Learned
2. To get the rate of interest for each conversion period the annual rate of interest
will be ________ by the frequency of conversion.
2. The formula in getting the compound interest given the present value and
maturity value is ____________________
3.
4. The formula in getting the present value in a compound interest environment is
___________________
II. In not more than three sentences explain how to compute the compound interest.
______________________________________________________________________________
22
CO_Q2_General Mathematics SHS
Module 2
What I Can Do
Money Matters
Read and analyze the situation below then answer the questions that follow.
Suppose you are a regular employee in a finance company that offers a loan payable
through salary deduction. One of its privileges is availing a loan that offers a 5%
interest compounded annually for 1 to 5 years. You are thinking to apply for a loan
but you wanted to analyze if you can shoulder the monthly payment. Make a loan
schedule and fill up an application form that will help you decide the amount of loan
that you will make
Loan Schedule
Loan Amount Maturity Value Monthly
t=1 t=2 t=3 t=4 t=5 Payment
₱10,000
₱20,000
₱30,000
₱40,000
₱50,000
₱100,000
₱150,000
₱200,000
₱250,000
23
CO_Q2_General Mathematics SHS
Module 2
Loan Application Form
Name: ________________________________________________________
Occupation: __________________________________________________
Monthly Income:______________________________________________
Sources of Funds:_____________________________________________
Loan Amount:_________________________________________________
24
CO_Q2_General Mathematics SHS
Module 2
Assessment
Multiple Choice. Choose the letter of the best answer. Write the chosen letter on a
separate sheet of paper.
1. Which of the following described to formula 𝐼𝐼𝑠𝑠 = 𝑃𝑃𝑃𝑃𝑃𝑃 ?
a. simple interest
b. compound interest
c. present value
d. maturity value
2. What will you get if you divide the simple interest by the product of the rate
and time?
a. present value of compound interest
b. present value of simple interest
c. maturity value of compound interest
d. maturity value of simple interest
4. Given that P = ₱15,250, r = 3.25% and t= 3 years, find the simple interest.
a. ₱24,868.80
b. ₱14,868.80
c. ₱1,486.88
d. ₱148.69
1
5. Given that P = ₱20,820, r = 2 % and t = 9 months, find the simple interest.
4
a. ₱ 351.34
b. ₱ 3513.38
c. ₱ 4,216.05
d. ₱ 42160.50
6. Which of the following is the formula to find the maturity value of the
compound interest?
a. 𝐹𝐹 = 𝑃𝑃(1 + 𝑟𝑟)𝑡𝑡
b. 𝐹𝐹 = 𝐹𝐹 − 𝑃𝑃
𝐹𝐹
c. 𝐹𝐹 =
(1+𝑟𝑟)𝑡𝑡
𝑖𝑖 (𝑚𝑚) 𝑚𝑚𝑚𝑚
d. 𝐹𝐹 = 𝑃𝑃(1 + )
𝑗𝑗
25
CO_Q2_General Mathematics SHS
Module 2
7. What is the frequency of conversion if the annual rate is compounded
monthly?
a. 2
b. 3
c. 4
d. 12
8. If the interest rate is 12% compounded quarterly, what is the interest rate per
conversion period?
a. 3%
b. 2.5%
c. 1.25%
d. 0.42%
9. Given that 𝐼𝐼𝑠𝑠 = 3,750, r = 2 ½ % and t = 3 years, what is the principal or present
value?
a. ₱500
b. ₱5,000
c. ₱50,000
d. ₱500,000
10. Given that F = ₱50,000 and P = ₱35,000 how much is the compound interest?
a. ₱15, 000
b. ₱25,000
c. ₱35,000
d. ₱45,000
13. If the maturity value is ₱50,000 and the compound interest is ₱3,500, how
much is the present value?
26
CO_Q2_General Mathematics SHS
Module 2
a. ₱53,500
b. ₱46,500
c. ₱46,000
d. ₱3,000
For numbers 14 – 15, use the following values: P=₱150,000, 𝑖𝑖 2 = 6%, t=4 years,
m=2
a. ₱190, 015.51
b. ₱179, 413.35
c. ₱167, 313.51
d. ₱159, 413.35
Additional Activities
27
CO_Q2_General Mathematics SHS
Module 2
Complete the table.
A.
Principal Rate Time Interest Maturity
Value
₱60,000 4% 3.5 years
2.2% 5 years ₱345
₱125,000 2% ₱135,000
B.
Answer Key
28
CO_Q2_General Mathematics SHS
Module 2
Module 2
CO_Q2_General Mathematics SHS
29
General Mathematics Teacher's Guide. Pasig City: Department of Education, 2016.
2016.
General Mathematics Learner's Material. Pasig City: Department of Education,
References
What's More
Activity 1.1
1. ₱281.25
2. ₱5066.67
Activity 1.2
1. I =₱260, F = ₱13,260
2. ₱10,416.67
Activity 1.3
P r t Is F
45,000 2% 2 2250 47250
1/2
95,000 1.2% 4 4560 99560
105000 3% 3 9450 114450
Activity 1.4
P r t Is F
60000 5% 3 9000 69000
40000 1 2 1200 41200
½%
20000 0.5% 9mos 75 21075 Assessment
Activity 2.1
What I 1. ₱1074.89 1. A
2. P=₱46393.68
Know Ic = 3606.32
2. B
Activity 2.2 3. B
1. A 4. C
1. F = ₱57,830.22
2. B I = ₱14,830.22 5. A
3. B 2. P=₱97,435.81 6. A
4. C I=₱7564.19 7. D
5. A Activity 2.3
8. A
6. A P i(m m j t n Ic F
) 9. C
7. C 60000 3% 4 0- 3 12 5628. 65628.41 10.A
8. A 0075 41
31576. 6% 2 0.03 4 8 8423. 40000 11.B
9. C 37 63 12.B
10.D Activity 2.4
13.B
11.B P i(m m j t n Ic F
) 14.A
12.B 78000 4% 4 0.0 6 24 21039 99039.3 15.D
13.C 1 .30 0
34946. 12 12 0.0 3 36 15053 50000
14.A 25 % 1 .75
15.D
Orines, Fernando B. Next Century Mathematics. Quezon, City: Phoenix Publishing
House, 2016.
Oronce, Orlando A. General Mathematics. Sampaloc, Manila: Re Bookstore, Inc.,
2017.
Santos, Durawin C.,Biason, Ma. Garnet P. Math Activated:Engage Yourself and Our
World General Mathematics. Makati, City: Salesiana Books by Don Bosco
Press, Inc., 2016.
30
CO_Q2_General Mathematics SHS
Module 2
For inquiries or feedback, please write or call:
Republic Act 8293, section 176 states that: No copyright shall subsist in any work of
the Government of the Philippines. However, prior approval of the government agency or office
wherein the work is created shall be necessary for exploitation of such work for profit. Such
agency or office may, among other things, impose as a condition the payment of royalties.
Borrowed materials (i.e., songs, stories, poems, pictures, photos, brand names,
trademarks, etc.) included in this module are owned by their respective copyright holders.
Every effort has been exerted to locate and seek permission to use these materials from their
respective copyright owners. The publisher and authors do not represent nor claim ownership
over them.
Each SLM is composed of different parts. Each part shall guide you step-by-
step as you discover and understand the lesson prepared for you.
In addition to the material in the main text, Notes to the Teacher are also
provided to our facilitators and parents for strategies and reminders on how they can
best help you on your home-based learning.
Please use this module with care. Do not put unnecessary marks on any part
of this SLM. Use a separate sheet of paper in answering the exercises and tests. And
read the instructions carefully before performing each task.
If you have any questions in using this SLM or any difficulty in answering the
tasks in this module, do not hesitate to consult your teacher or facilitator.
Thank you.
What I Need to Know
You already determine on your previous modules the different characteristics and
qualities of simple and compound interest. You also determine the different formula
and relationship involve in the simple and compound interest environment which
will aid in computing the required components. In this module, you will practice your
ability to think critically in solving problems related to this topic
Are you now ready for the new lesson? If so, you may proceed to this module and
have fun while learning.
Let’s find out how far you might already know about this topic by answering the
assessment below.
Choose the letter of the best answer. Write the chosen letter on a separate sheet of
paper.
2. How much money will Michael add on his funds for his new business?
a. ₱ 459.38
b. ₱ 4,593.75
c. ₱ 6,000.00
d. ₱ 60,000.00
4. If Michael borrowed the same amount of money payable for the same number
of years and Castañas Cooperative Bank offered a promo as part of its
anniversary celebration and make all the interest loans 1.25%, how much
interest must be paid?
a. ₱ 3,750.00
b. ₱ 37,500.00
c. ₱ 63,750.00
d. ₱ 70,000.00
10. How much is the additional interest earned if instead of 4 years the investment
matures after 6 years?
a. ₱ 7,096.72
b. ₱ 13,725.96
c. ₱ 20,822.68
d. ₱ 34,548.64
11. How much will be the maturity value after 5 years if he borrows from Limbon
Rural Bank?
a. ₱ 266,071.86
b. ₱ 207,660.68
c. ₱ 367,071.88
d. ₱ 376,716. 66
12. How much will be the maturity value after 5 years if he borrows from Buli
Cooperative Bank?
a. ₱ 207,560.78
b. ₱ 262,812.30
c. ₱ 376,431.54
d. ₱ 386,221.32
13. What will be the interest after 5 years if he borrows from Limbon Rural Bank?
a. ₱ 126,716.66
b. ₱ 117,071.88
c. ₱ 42,339.32
d. ₱ 16,071.86
14. What will be the interest after 5 years if he borrows from Buli Cooperative
Bank?
a. ₱ 136,221.32
b. ₱ 126,431.54
c. ₱ 12,812.30
d. ₱ 2,812.53
One of the most common scenario in our daily lives is engaging ourselves in a
business transaction. It is all but natural because many actions that we undertake
involves money. Moreover, when we are talking about money we usually involve
ourselves with the different problems that need solutions especially when it comes
to the computation of interest and the total amount to be paid at the end of a
particular term. So, are you ready to systematically solve problems involving simple
interest?
What’s In
For you to begin, consider the previous lesson which is essential in this topic.
You already learned that in simple interest the basis of computation is the original
principal. There are also different formula to be used in finding the different
components in simple interest and these are the following:
where:
r= rate of interest
t= time in years
Is = Simple Interest
𝐼𝐼𝑠𝑠 = 4500(0.025)(3)
𝐼𝐼𝑠𝑠 = ₱ 337.50
The simple interest is ₱ 337.50
𝐹𝐹 = 𝑃𝑃(1 + 𝑟𝑟𝑟𝑟)
𝐹𝐹 = 3375[1 + (0.012)(2)]
F= ₱ 3,456.00
The maturity value is ₱ 3,456.00
This or That
Febie is planning to invest her money in a bank. She researched some banks which
will make a better offer. She narrowed down her choices to these two banks which
have the following offers:
Questions:
1. What are the factors that Febie can consider in choosing a bank?
________________________________________________________________________
2. What are the differences between the offers made by the two banks?
________________________________________________________________________
4. If you were Febie, which will you choose between the two banks? Why?
_______________________________________________________________________
5. If Febie will invest ₱ 5,000.00, how much will be its maturity value in Insurance
Bank? Trust Bank?
_______________________________________________________________________
6. If you were Febie, what will be your basis in choosing a bank? Which bank will
you choose?
_______________________________________________________________________
If you noticed in the activity, there are two banks that offer different condition in
earning interest. Insurance Bank offers a rate that is smaller compared to Trust
bank. However, the time covered by the Insurance Bank is shorter. If Febie will
deposit on Insurance bank her ₱5,000.00 savings will yield an interest of ₱225.00
after 3 years. On the other hand, if she chooses to deposit her money in Trust Bank
the interest that she will earn is ₱525.00 but this will only be realized after 6 years.
The choice for the bank where Febie will invest her money will depend upon her
prerogative if she wanted to have a long term investment she can choose Trust Bank
but if she thinks that she will need money in the near future she can invest in the
Insurance Bank. There are times that the amount of return is not the only factor to
consider in our choice since there are other components involved in the simple
interest formula and that is what we will explore in this lesson by solving problems
involving simple interest.
In solving problems involving simple interest, we can follow the 4 –step rule of George
Polya.
2. Janice has a loan with an interest rate of 1.5%. The amount of interest is
₱ 2,250.00 for a period of 3 years. How much is her loan?
Explore. After reading and understanding the problem, it will be determined that
the required component is the simple interest and the following are the known
values:
P = ₱ 16,000.00
r = 1.75% or 0. 0175
t= 7 years
Plan. Since the value of simple interest is required, the formula 𝐼𝐼𝑠𝑠 = 𝑃𝑃𝑃𝑃𝑃𝑃 will be
applied.
𝐼𝐼𝑠𝑠 = 16,000(0.0175)(7)
𝐼𝐼𝑠𝑠 = ₱ 1,960.00
Check. As for checking, we can use other formulas related to simple interest and
substitute the value of simple interest. If the obtained value is any of the given facts,
then you obtain the correct answer.
𝐼𝐼𝑠𝑠 = ₱ 2,250.00
r = 1.5% or 0.015
t = 3 years
Plan. Since the problem requires the present value or the principal the formula to
be used is
𝐼𝐼𝑠𝑠
𝑃𝑃 =
𝑟𝑟𝑟𝑟
𝐼𝐼𝑠𝑠
𝑃𝑃 =
𝑟𝑟𝑟𝑟
2,250
𝑃𝑃 =
(0.015)(3)
𝑃𝑃 = ₱ 50,000
Check. As for checking, the formula in finding the simple interest can be used.
Independent Practice 1
How much did Josie invest if the maturity value is ₱38,500.00 and the
simple interest computed is at 1.12% for 6 years?
Guide Questions
Independent Assessment 1
Write a synthesis journal from the different activities and discussion you
encountered from this module. You can recall past experiences and real-life
problems and how you can solve and apply it in the future.
Synthesis Journal
____________________________________________________
Planning The goal set is The goal set is The goal set is not
achievable and difficult to achievable and
realistic. achieve. not realistic.
What’s In
Before starting this lesson, consider the previous module which is essential in this
topic.
You already learned that in compound interest the basis of computing the interest
is not only the principal but also the accumulated interest until such term.
There is also different formula in getting the different components of the compound
interest and they are the following:
𝐹𝐹 = 𝑃𝑃(1 + 𝑟𝑟)𝑡𝑡
𝐹𝐹 = 𝑃𝑃(1 + 𝑗𝑗)𝑚𝑚𝑚𝑚 ; maturity value for compounding more than once a year
𝐹𝐹
𝑃𝑃 = ; present value
(1+𝑗𝑗)𝑚𝑚𝑚𝑚
𝑖𝑖 (𝑚𝑚)
j=
𝑚𝑚
Which is Which?
Miguel wanted to apply for a loan in a lending company. The company offers different
terms of loan which are as follows:
Questions:
1. What are the factors that Miguel can consider in choosing the terms of his loan?
________________________________________________________________________
3. How much interest will a ₱ 50,000.00 loan at 1.15% yield? How much is the
interest of ₱ 50,000.00 loan at 1.25%?
_______________________________________________________________________
4. If you were Miguel, which between the two terms will you choose? Why?
_______________________________________________________________________
In the previous activity, the type of interest that was used is compound In the
previous activity, the type of interest that was used is compound interest. However,
there are different terms and conditions that were used. For Miguel to choose wisely
the terms he will use for his loan application, there is a need for him to analyze the
given conditions first. If he will choose to apply for a loan with 1.15% interest
compounded semi - annually for 3 years he will need to pay an interest amounting
to ₱ 1,749.99. However, if he chooses to apply a loan at 1.25%interest compounded
annually for 3 years he will need to pay ₱ 1,898.54. So, interest wise it is better to
apply for a loan with 1.15% interest compounded semi – annually for 3 years.
In choosing the terms, it is important to analyze first the component and the
conditions presented so that you can arrive in wise decision. This is also the things
that you must remember in solving problems involving compound interest.
1. Jasmin borrowed money from a bank at the rate of 1.89% compounded semi
– annually. If the amount she borrowed is ₱ 13,000.00, how much interest will
she need to pay at the end of 6 years?
1. Jasmin borrowed money from a bank at the rate of 1.89% compounded semi
– annually. If the amount she borrowed is ₱ 13,000.00, how much interest
will she need to pay at the end of 6 years?
P = ₱ 13,000.00
𝑖𝑖 (2) =0.0189
m=2
t=6
mt=12
𝑖𝑖 2 0.0189
𝑗𝑗 = = = 0.00945
2 2
Plan. Since the problem suggest that it is compounding more than once a year the
formulas:
There is a need to find first the maturity value because it is an important element in
the compound interest formula.
𝐹𝐹 = 𝑃𝑃(1 + 𝑗𝑗)𝑚𝑚𝑚𝑚
𝐹𝐹 = 13,000(1 + 0.00945)12
𝐹𝐹 = 14,553.29
After finding the maturity value, we can solve for the compound interest:
𝐼𝐼𝑐𝑐 = 𝐹𝐹 − 𝑃𝑃
𝐼𝐼𝑐𝑐 = 14,553.29 − 13,000
𝐼𝐼𝑐𝑐 = ₱ 1,553.29
Check. As for checking, the formula in finding the present value can be used.
F = ₱ 250,000.00
𝑖𝑖 (4) =0.0102
m=4
𝑖𝑖 4 0.0102
j= = = 0.00255
4 4
t=4
mt=16
There is a need to find first the maturity value because it is an important element
in the compound interest formula.
𝐹𝐹 = 𝑃𝑃(1 + 𝑗𝑗)𝑚𝑚𝑚𝑚
250,000 = 𝑃𝑃(1.00255)16
250,000 𝑃𝑃(1.00255)16
=
(1.00255)16 (1.00255)16
𝑃𝑃 = 240,017.74
After finding the maturity value, we can solve for the compound interest:
𝐼𝐼𝑐𝑐 = 𝐹𝐹 − 𝑃𝑃
𝐼𝐼𝑐𝑐 = ₱ 9,982.26
Check. As for checking, the formula in finding the present value can be used.
Independent Practice 1
How much must Michelle set aside and invest in a fund earning 2.1%
compounded quarterly if she wants to accumulate ₱ 50,000.00 in 5 years?
1. Explore: ______________________________________
2. Plan: ________________________________________
3. Solve: ________________________________________
4. Check: _______________________________________
Independent Assessment 1
Write a synthesis journal from the different activities and discussion you
encountered from this module. You can recall past experiences and real-life
problems and how you can solve and apply it in the future.
Synthesis Journal
You wanted to put up a business and planning to apply for a loan for your starting
capital. The lending company where you inquire offers Flexi Loan for new
entrepreneurs but the type of interest to be used is compound interest. Flexi Loan is
a program wherein the new entrepreneur will propose the term of loan and payment
subject for the approval of the management. Suppose you are a new entrepreneur,
make a proposal for your loan using a compound interest environment.
LOAN PROPOSAL
Name: _________________________________________________________________
Business to put up: ____________________________________________________
Brief Description of Business: ___________________________________________
Source of Funds: ________________________________________________________
Amount of Loan: _______________________________________________________
Nominal rate: __________________________________________________________
Frequency of Conversion: _______________________________________________
Time in years: ________________________________________________________
Compound Interest: __________________________________________________
Maturity Value: _______________________________________________________
Terms of Payment (Monthly, Quarterly, Semi Annually, Annually):
______________________________________________________________________
Amount of Payment per term: ___________________________________________
Co Maker: ______________________________________________________________
Planning The goal set is The goal set is The goal set is not
achievable and difficult to achievable and
realistic. achieve. not realistic.
Choose the letter of the best answer. Write the chosen letter on a separate sheet of
paper.
4. If Jenny invested the same amount of money at Lucena Cooperative Bank who
is offering an interest rate of 1.5% for 3 years how much interest will she gain?
a. ₱ 325.00
b. ₱ 475.00
c. ₱ 675.00
d. ₱ 825.00
Shirley is planning to invest ₱ 150,000.00. San Jose Rural Bank is offering 1.15%
compounded semi – annually, while Taysan Cooperative Bank offers 1.25%
compounded monthly.
11. How much will be the maturity value after 5 years if he borrows from San Jose
Rural Bank?
a. ₱ 158,851.63
b. ₱ 207,660.68
c. ₱ 367,071.88
d. ₱ 376,716.66
12. How much will be the maturity value after 5 years if he borrows from Taysan
Cooperative Bank?
a. ₱ 159,668.97 c. ₱ 376,431.54
b. ₱ 262,812.30 d. ₱ 386,221.32
13. What will be the interest after 5 years if he borrows from San Jose Rural Bank?
a. ₱ 26,716.66
b. ₱ 17,071.88
c. ₱ 12,339.32
d. ₱ 8,851.63
14. What will be the interest after 5 years if he borrows from Taysan Cooperative
Bank?
a. ₱ 36,221.32
b. ₱ 16,431.54
c. ₱ 9,668.97
d. ₱ 2,812.53
Additional Activities
Republic Act 8293, section 176 states that: No copyright shall subsist in any work
of the Government of the Philippines. However, prior approval of the government agency or
office wherein the work is created shall be necessary for exploitation of such work for profit.
Such agency or office may, among other things, impose as a condition the payment of
royalties.
Borrowed materials (i.e., songs, stories, poems, pictures, photos, brand names,
trademarks, etc.) included in this module are owned by their respective copyright holders.
Every effort has been exerted to locate and seek permission to use these materials from
their respective copyright owners. The publisher and authors do not represent nor claim
ownership over them.
Office Address: Gate 2 Karangalan Village, Brgy. San Isidro, Cainta, Rizal
Telefax: 02-8682-5773/8684-4914/8647-7487
E-mail Address: lrmd.calabarzon@deped.gov.ph
General Mathematics
Quarter 2 – Module 4:
Simple and General Annuities
Introductory Message
This Self-Learning Module (SLM) is prepared so that you, our dear learners,
can continue your studies and learn while at home. Activities, questions,
directions, exercises, and discussions are carefully stated for you to understand
each lesson.
Each SLM is composed of different parts. Each part shall guide you step-by-
step as you discover and understand the lesson prepared for you.
In addition to the material in the main text, Notes to the Teacher are also
provided to our facilitators and parents for strategies and reminders on how they
can best help you on your home-based learning.
Please use this module with care. Do not put unnecessary marks on any
part of this SLM. Use a separate sheet of paper in answering the exercises and tests.
And read the instructions carefully before performing each task.
If you have any questions in using this SLM or any difficulty in answering
the tasks in this module, do not hesitate to consult your teacher or facilitator.
Thank you.
What I Need to Know
One of the dreams of every Filipino family is to purchase a house where they
can comfortably live. However, most often they cannot afford to purchase such
property in cash. One of the options to realize their dreams is to purchase it on
an installment basis. In this situation, the concept of annuities is being used.
1
CO_Q2_General Mathematics SHS
Module 4
What I Know
Let’s find out how far you might already know about this topic! Please take this
challenge! Have Fun!
Multiple Choice. Choose the letter of the best answer. Write the chosen letter on
a separate sheet of paper.
4. What do you call the fixed payment and interest over a specified time?
a. annuity payment c. due payment
b. interest payment d. general payment
6. What do you call the type of annuity in which the payments are made at
the end of each payment interval?
a. annuity certain c. ordinary annuity
b. contingent annuity d. general annuity
7. What do you call to the type of annuity which payments begin and end at
definite times?
a. contingent annuity c. simple annuity
b. ordinary annuity d. annuity certain
2
CO_Q2_General Mathematics SHS
Module 4
8. What do you call the type of annuity in which the payments extend over
an indefinite length of time?
a. contingent annuity c. general annuity
b. annuity certain d. ordinary annuity
9. A payment made at the end of each month for money borrowed that
charges 1.05% interest compounded quarterly. What type of annuities is
being represented?
a. simple c. ordinary
b. general d. annuity due
3
CO_Q2_General Mathematics SHS
Module 4
For numbers 13-15. Given the cash flow of an annuity below.
Period 0 1 2 3 4 5
(Year)
₱ 1,000
₱ 1,000(1.05)1
₱ 1,000(1.05)2
₱ 1,000(1.05)3
₱ 1,000(1.05)4
15. What is the sum of all the payments of the given annuity?
a. ₱ 5,000 c. ₱ 5,225.36
b. ₱ 5,455.82 d. ₱ 5,525.63
4
CO_Q2_General Mathematics SHS
Module 4
Lesson
Simple and General
1 Annuities
This lesson will tackle first the definition and types of annuities and the
difference between simple and compound annuities. There are types of annuity
according to correspondence of payment intervals with interest periods
Simple Annuity - the payment interval is also the same as the interest period.
General Annuity refers to an annuity where the length of the payment interval
is not the same as the length of the interest compounding period
What’s In
REMEMBER ME
As the saying goes, “A person who does not remember where he came from will
never reach his destination”. This saying is very popular, passing from one
generation to another generation. For you to remember the previous lesson,
here are some exercises to refresh your mind.
Activity 1
Answer each of the following.
Solution:
Answer:
5
CO_Q2_General Mathematics SHS
Module 4
C. Find the compound interest
Solution:
Answer:
Solution:
Answer:
Solution:
Answer:
6
CO_Q2_General Mathematics SHS
Module 4
What’s New
WISE DECISION
Mr. and Mrs. De Dios are planning to buy a new house despite of their limited
budget. They seek advice from a bank for them to produce enough amount for
the down payment of the house they have chosen.
According to the bank if ₱ 20,000 will be invested at the end of each year for 5
years in an account that pays interest at 10% compounded annually the couple
will be able to have the amount for down payment.
If there are 3 houses for sale offering a 10% down payment of the price which
among these 3 houses is the best choice?
House A – ₱850,740
House B – ₱1,221,020
House C – ₱2,110,000
For you to be able to determine the total amount of investment for the period of
5 years, you need to complete the table below.
Calculate the amount to which the first to the fourth period ₱ 20,000.00 will
grow using the compound interest formula.
2
3
4
5 ₱20,000 ₱ 20,000
Total =
Note: The ₱ 20,000 deposited at the end of the first year will draw interest for 4
years, so it will amount to ₱20,000(1.01)4 . The ₱20,000 deposited at the end of
the second year will draw interest for 3 years so it will amount to ₱20,000(1.01)3 ,
and so on.
7
CO_Q2_General Mathematics SHS
Module 4
1. What pattern will be reflected in the 2nd column of the table? Discuss.
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
2. Using the pattern found in number 1, calculate the sum of the amounts in
the third column.
3. Given the answer in number 2, what will be the best house suited to the
investment made by Mr. and Mrs. De Dios? Explain.
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
What is It
The activity in the What’s New involves fixed payment/investment for each
period (₱ 20,000 at the end of each year) and fixed compound interest rate over
a specified time; that in this case is 10% compounded annually for 5 years.
If the payment for each period is fixed and the compound interest rate is fixed
over a specified time the payment is called an annuity payment. Accounts
associated with streams of annuity payments are called annuities.
8
CO_Q2_General Mathematics SHS
Module 4
Annuities may be classified in different ways, as follows.
Annuities
According to payment Simple Annuity - an General Annuity - an
interval and interest annuity where the annuity where the
period payment intervals is the payment intervals is not
same as the interest the same as the interest
period period
According to time of Ordinary Annuity (or Contingent Annuity -
payment Annuity Immediate) - a an annuity in which the
type of annuity in which payments extend over
the payments are made an indefinite (or
at the end of each indeterminate) length of
payment interval time
According to duration Annuity Certain - an Contingent Annuity -
annuity in which an annuity in which the
payments begin and end payments extend over
at definite times an indefinite (or
indeterminate) length of
time
In the activity, the payment is made at the end of each period. Such annuity is
called an ordinary annuity.
The time between the successive payments dates of an annuity is called the
payment interval.
The time between the first payment interval and last payment interval is called
term of the annuity (t).
The sum of the future values of all the payments to be made during the entire
term of the annuity is the future value or the amount of an annuity (F).
The sum of the present values of all payments to be made during the entire
term of the annuity is called the present value of n annuity (P).
Annuities may be illustrated using a time diagram. The time diagram for an
ordinary annuity is given below.
0 1 2 3 4 5 n
9
CO_Q2_General Mathematics SHS
Module 4
Simple Annuity - the payment interval is also the same as the interest period.
The cash flow of the given situation can be illustrated in the time diagram below:
Period 0 1 2 3 4 5
The future value of all the payments at the end of term (t=5).
Period 0 1 2 3 4 5
(Year)
₱ 50,000
₱ 50,000(1.08)1
₱ 50,000(1.08)2
₱ 50,000(1.08)3
₱ 50,000(1.08)4
Add all the future values obtained from the previous step.
₱ 50,000.00 = ₱ 50,000
1
₱ 50,000(1.08) = ₱ 54,000
₱ 50,000(1.08)2 = ₱ 58,320
₱ 50,000(1.08)3 = ₱ 62,985.60
₱ 50,000(1.08)4 = ₱ 68,024.45
Total ₱ 293,330.05 ₱ 293,330.05
10
CO_Q2_General Mathematics SHS
Module 4
General annuity refers to an annuity where the length of the payment interval
is not the same as the length of the interest compounding period.
Example 2: Find the amount of annuity of ₱700 every 6 months (½ year) for 12
years if interest is 6% compounded monthly.
= 1.061677812
Step 2: Let the equivalent ½ year rate be i% (Note the equivalent yearly
rate would be 2i%). Now find the value of ₱1 invested at i% per ½ year
after 1 year.
2
�=1 1+� Note: n = 2, the number of times interest is
compounded
1+ i = 1.061677812 = 1.030377509
11
CO_Q2_General Mathematics SHS
Module 4
Now, we can illustrate the cash flow:
Period 0 1 2 3 … 24
The future value of all the payments at the end of term (t=24).
Period 0 1 2 3 … 24
(Year)
₱ 700
₱ 700(1.030377509)21
₱ 700(1.030377509)22
₱ 700(1.030377509)23
Add all the future values obtained from the previous step.
= ₱ 700 + ₱ 700(1.030377509)+ ₱ 700(1.030377509)2 +⋯+ ₱ 700(1.030377509)23
= ₱ 24,212.83
12
CO_Q2_General Mathematics SHS
Module 4
What’s More
Activity 1.1
Read each problem carefully and tell whether each of the given information
describes a simple annuity or general annuity. Complete the diagram that
follows. Have Fun!
Payment …
Period
0 1 2 3 …
13
CO_Q2_General Mathematics SHS
Module 4
Diagram:
Payment …
Period 0 1 2 3 …
Activity 1.2
Identify the type of annuity in the given situations below then show the
illustration of the cash flow.
a. Monthly payments of ₱ 2,000 for 5 years with interest rate of 12%
compounded annually.
14
CO_Q2_General Mathematics SHS
Module 4
What I Have Learned
A. Please read the sentences carefully and fill in the missing word/s by writing
your answer on the line/s provided.
1. A sequence of payments made at equal (fixed) intervals or periods of time
is called ____________.
2. Each payment in an annuity is called ______________.
3. The time between the successive payments dates of an annuity is called
the ____________.
4. In simple annuity the payment interval is also the same as the
_______________.
5. In general annuity the interest conversion or compounding period is
____________ with the payment interval.
B. Give at least three examples of real-life situations in your locality that shows
annuity.
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
C. Enumerate and describe the different types of annuities.
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
D. Being aware with the two types of annuities help you in different
transactions that you will encounter in the future. What are the advantages
and disadvantages of these annuities?
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
15
CO_Q2_General Mathematics SHS
Module 4
What I Can Do
Read and analyze the situation below then answers the question given.
Your mom asked your opinion if she will be joining the cooperative in her office.
She wants to know the amount of money she will be receiving after 6 months
and wanted to buy something in December. The cooperative wants her to
contribute ₱1,000 per month beginning in June 2020 which will earn 3%
compounded monthly. How much will be the future value of your mom’s
contribution at the end of December 2020?
Tasks:
You need to prepare a report showing a cash flow diagram on the total amount
of money your mother will earn at the end of December. At the end of your
report, write a conclusion stating your opinion to help your mom to decide.
Conclusion:
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
Rubrics:
5-States a conclusion with complete and appropriate justification, based on a
reasonable interpretation of the data.
4-States a conclusion with enough justification, based on a reasonable
interpretation the data.
3-States a conclusion with some justification, based on a reasonable
interpretation of the data.
2-States a conclusion on a reasonable interpretation of the data.
1-The conclusion is based on an unreasonable interpretation of the data.
16
CO_Q2_General Mathematics SHS
Module 4
Assessment
Multiple Choice. Choose the letter of the best answer. Write the chosen letter on
a separate sheet of paper.
1. Which of the following refers to the fixed sum of money paid to someone
at regular intervals and subject to a fixed compound interest?
a. annuity c. compound interest.
b. simple interest d. annuity certain
7. The interval between the beginning of the first payment period and the
end of the last period.
a. period c. term
b. due d. interval
8. The sum of all the payments to be made during the entire term of the
annuity.
a. future value c. loan value
b. present value d. interest value
17
CO_Q2_General Mathematics SHS
Module 4
9. What type of annuity is represented if the payment is made at the end of
each month for money borrowed that charge 0.15% interest compounded
quarterly?
a. simple c. ordinary
b. general d. annuity due
18
CO_Q2_General Mathematics SHS
Module 4
For numbers 13-15. Given the cash flow of an annuity below.
Period 0 1 2 3 4
(Year)
₱ 8,000
₱ 8,000(1.10)
₱ 8,000(1.10)2
₱ 8,000(1.10)3
15. What is the sum of all the payments of the given annuity?
a. ₱ 30,218 c. ₱ 32,000
b. ₱ 31,718 d. ₱ 37,128
19
CO_Q2_General Mathematics SHS
Module 4
Additional Activities
1. Why is it that many Filipinos do not save or save very little? Research the
top five external factors or barriers to saving. Your answers should be
supported by recent data. Cite your sources for the data gathered.
2. Choose one topic from the choices shown below. Ask someone how the
payment/ investment has been made. Make research on some strategies on
how to reduce or gain interest in the chosen topic.
a. Insurance
b. Time deposit
c. Educational plan
d. Housing Loan
e. Retirement Plan
f. Investment
20
CO_Q2_General Mathematics SHS
Module 4
Module 4
CO_Q2_General Mathematics SHS
21
What's More
Activity 1.1
1. Simple Annuity
₱3,000 ₱3,000 ₱3,000… ₱3,000
1 2 3 … 48
₱3,000
₱3,000(1.0025)45
₱3,000(1.0025)46
₱3,000(1.03)47
2. Compound Annuity
₱5,000 ₱5,000 ₱5,000 … ₱5,000
1 2 3 … 40
₱5,000
₱5,000(1.0066227)37
₱5,000(1.0066227)38
₱5,000(1.0066227)39
Activity 1.2
1. Compound Annuity
₱2,000 ₱2,000 ₱2,000 … ₱2,000
1 2 3 … 60
₱2,000
₱2,000(1.009488)57
₱2,000(1.009488)58
₱2,000(1.009488)59
2. Simple Annuity
₱1,500 ₱1,500 ₱1,500… ₱1,500
1 2 3 … 10
₱3,000
₱3,000(1.08)7
₱3,000(1.08)8
₱3,000(1.08)9
Answer Key
References
Alday, Eward M., Batisan, Ronaldo S., and Caraan, Aleli M. General
Mathematics. Makati City: Diwa Learning Systems Inc., 2016. 62-69.
Oronce, Orlando. General Mathematics. Quezon City: Rex Bookstore, Inc., 2016.
40-52.
22
CO_Q2_General Mathematics SHS
Module 4
For inquiries or feedback, please write or call:
Republic Act 8293, section 176 states that: No copyright shall subsist in any work of
the Government of the Philippines. However, prior approval of the government agency or office
wherein the work is created shall be necessary for exploitation of such work for profit. Such
agency or office may, among other things, impose as a condition the payment of royalties.
Borrowed materials (i.e., songs, stories, poems, pictures, photos, brand names,
trademarks, etc.) included in this module are owned by their respective copyright holders.
Every effort has been exerted to locate and seek permission to use these materials from their
respective copyright owners. The publisher and authors do not represent nor claim ownership
over them.
Office Address: Gate 2 Karangalan Village, Brgy. San Isidro, Cainta, Rizal
Telefax: 02-8682-5773/8684-4914/8647-7487
E-mail Address: lrmd.calabarzon@deped.gov.ph
General Mathematics
Quarter 2 – Module 5:
Future and Present Values
of Simple and General Annuities
Introductory Message
This Self-Learning Module (SLM) is prepared so that you, our dear learners,
can continue your studies and learn while at home. Activities, questions, directions,
exercises, and discussions are carefully stated for you to understand each lesson.
Each SLM is composed of different parts. Each part shall guide you step-by-
step as you discover and understand the lesson prepared for you.
In addition to the material in the main text, Notes to the Teacher are also
provided to our facilitators and parents for strategies and reminders on how they can
best help you on your home-based learning.
Please use this module with care. Do not put unnecessary marks on any part
of this SLM. Use a separate sheet of paper in answering the exercises and tests. And
read the instructions carefully before performing each task.
If you have any questions in using this SLM or any difficulty in answering the
tasks in this module, do not hesitate to consult your teacher or facilitator.
Thank you.
What I Need to Know
This module was designed and written with you in mind. It is here to help you
compute the future and present value of simple and general annuities. The scope
of this module permits it to be used in many different learning situations. This
modules aims to help you on how to be practical specifically in spending for your
needs whether be it in cash or in installment basis. It is important that you apply
the skills you will learn here in real life situations. Good luck!
This module is composed of two lessons namely:
Lesson 1 - Future and Present Values of Simple Annuity
Lesson 2 - Future and Present Vlaues of General Annuity
1
CO_Q2_General Mathematics SHS
Module 5
What I Know
Let’s find out how far you might already know about this topic! Please take this
challenge! Have Fun!
Choose the letter of the best answer. Write the chosen letter on a separate sheet
of paper.
2. What is a type of annuity where the payment interval is the same as the
interest period?
a. General Annuity
b. Simple Annuity
c. Simple Interest
d. Compound Interest
3. What is the type of annuity in which the payment interval is not the same
as the interest period?
a. General Annuity
b. Simple Annuity
c. Simple Interest
d. Compound Interest
4. What is equal to the down payment (if there is any) plus the present
value of the installment payments?
a. Downpayment
b. Cash Price
c. Markup
d. Markdown
2
CO_Q2_General Mathematics SHS
Module 5
6. Installment payment for an appliance at the beginning of each month with
interest compounded monthly is an example of what type of annuity?
a. General Annuity
b. Simple Annuity
c. Ordinary Annuity
d. Annuity Due
8. What is the sum of present values of all the payments to be made during the
entire term of the annuity?
a. Present Value of an Annuity
b. Future Value of an Annuity
c. Periodic Payment
d. Term of an Annuity
9. What is the time between the first payment interval and last payment interval?
a. Periodic Payment
b. Term of an Annuity
c. Payment Interval
d. Present Value of an Annuity
11. What is the sum of future values of all the payments to be made during the
entire term of the annuity?
a. Periodic Payment
b. Payment Interval
c. Present Value of an Annuity
d. Future Value of an Annuity
3
CO_Q2_General Mathematics SHS
Module 5
12. What is the time between successive payments ?
a. Periodic Payment
b. Term of an Annuity
c. Time
d. Payment interval
4
CO_Q2_General Mathematics SHS
Module 5
Lesson
Future and Present Values
1 of Simple Annuity
Have you ever tried getting an appliance by applying in a Home Credit, Flexi
Finance, or through credit cards? If yes, you will realize that this lesson is the
direct application of this. With this, you can also see or compute how lending
institutions really work. You will also realize if they are really worth it.
What’s In
Most of us have had the experience of making a series of fixed payments over a
period of time—such as rent or car payments—or receiving a series of payments
for a period of time, such as interest from a bond or CD. These recurring or
ongoing payments are technically referred to as "annuities" (not to be confused
with the financial product called an annuity, though the two are related).
There are several ways to measure the cost of making such payments or what
they're ultimately worth. Here's what you need to know about calculating
the present value or future value of an annuity.
Definition
Simple Annuity is a type of annuity in which the payment period is the same
as the interval period (conversion period).
5
CO_Q2_General Mathematics SHS
Module 5
Notes to the Teacher
Regular payments, such as the rent on an apartment or interest on a bond,
are sometimes referred to as "annuities."
In ordinary annuities, payments are made at the end of each time period. With
annuities due, they're made at the beginning.
The future value of an annuity is the total value of payments at a specific point
in time. The present value is how much money would be required now to
produce those future payments.
6
CO_Q2_General Mathematics SHS
Module 5
What’s New
You decided to join a Kabataan Savers Club which aims for financial growth of
the youth nowadays. If you pay ₱1,000.00 at the end of each month for 5 months
on account that pays interest at 12% compounded monthly, how much money
will you have after 5 months?
Guide Questions:
7
CO_Q2_General Mathematics SHS
Module 5
What is It
The future value of an annuity is the total accumulation of the payments and
interest earned. The present value of an annuity is the principal that must be
invested today to provide the regular payment of an annuity.
8
CO_Q2_General Mathematics SHS
Module 5
In this case, with the example presented above we can answer the following
questions. (1) Since the interest conversion is equal or the same as the payment
interval so we will use simple annuity.
P = ₱1,000.00
n = t* m= (5 months/12) *12=5
(3) Since we will find the amount of money after 5 months, we will use the
(1+𝑖𝑖)𝑛𝑛 −1
formula: 𝐹𝐹 = 𝑅𝑅 ∗ � �
𝑖𝑖
1000[(1+0.01)5 −1]
(4) Then substituting all the given facts, we will obtain: 𝐹𝐹 =
0.01
Example 1.B
Contrast in calculating the future value, a present value (PV) tells you how
much money would be required now to produce a series of payments in the future,
again assuming a set interest rate.
P =?
n = t*m =(5/12)*12= 5
Since we are looking for the present value, we use the formula
1 − (1 + 𝑖𝑖)−𝑛𝑛
𝑃𝑃 = 𝑅𝑅 ∗ � �
𝑖𝑖
By substituting it in the formula, we will obtain
1000[1 − (1 + 0.01)−5 ]
𝑃𝑃 =
0.01
Present Value = ₱4,853.43
As you can notice, future value is higher than the present value. This is because
of the time value of money—the concept that any given sum is worth more now
than it will be in the future because it can be invested in the present.
9
CO_Q2_General Mathematics SHS
Module 5
Definition. The cash value or cash price is equal to the down payment (if there
is any) plus the present value of the installment payments.
Example 1.C
n= t*m=5*12=60 years
R= ₱16,200.00
Obtain the present value of the car by plugging the given in our formula
1 − (1 + 0.00875)−60
𝑃𝑃 = 16,200 ∗ � �
0.00875
To get the cash value, simply add the obtained present value and the
downpayment made, so;
10
CO_Q2_General Mathematics SHS
Module 5
Example 1.D
Mr. Edgar borrowed from his friend ₱ 200,000.00 He promised to pay the amount
plus its interest by an equal amount of money each year for 3 years. What must
be his annual payment if they agreed on an interest of 10% compounded
annually?
This example is different from the examples presented above. This time, you are
going to compute the Regular periodic payment. We will be manipulating the
formula of present value to obtain the formula for the periodic payment.
𝑃𝑃
𝑅𝑅 =
1 − (1 + 𝑖𝑖)−𝑛𝑛
𝑖𝑖
Given:
P= ₱ 200,000.00
i= 0.10
n= 3
11
CO_Q2_General Mathematics SHS
Module 5
What’s More
Read each problem carefully and answer each question to solve the problem. Have
Fun!
Practice Activity 1:
Find the Present Value (P) and the Future Value (F) of quarterly
payments of ₱ 2,000.00 for 5 years with interest rate of 8% compounded
quarterly.
Hint: State the given. Identify which formula to be used. Substitute the
value to the formula.
1−(1+𝑖𝑖)−𝑛𝑛 (1+𝑖𝑖)𝑛𝑛 −1
𝑃𝑃 = 𝑅𝑅 ∗ � � 𝐹𝐹 = 𝑅𝑅 ∗ � �
𝑖𝑖 𝑖𝑖
Independent Activity 1
Find the Present Value (P) and the Future Value (F) of semi-annual
payments of ₱ 8,000.00 for 12 years with interest rate of 12%
compounded semi-annually.
Practice Activity 2:
How much should you invest in a fund each year paying 2% compounded
annually to accumulate ₱ 100,000.00 in 5 years?
12
CO_Q2_General Mathematics SHS
Module 5
Hint: State the given. Identify which formula to be used. Substitute the
value to the formula.
𝑃𝑃
𝑅𝑅 =
1 − (1 + 𝑖𝑖)−𝑛𝑛
𝑖𝑖
Independent Activity 2
Starting on her 30th birthday, a woman will invest an amount every year
on her birthday in an account that grows at an annual rate of 7%. What
should be the amount invested should she want her fund to
₱ 300,000.00 just before her 65th birthday?
Practice Activity 3
Hint: State the given. Identify which formula to be used. Substitute the
value to the formula.
CV = Downpayment + Present Value
Independent Activity 3
The buyer of a lot pays ₱ 50,000.00 cash and ₱ 10,000.00 every month for
10 years. If money is 8% compounded monthly, how much is the cash price
of the lot?
13
CO_Q2_General Mathematics SHS
Module 5
What I Have Learned
4. Cash Value/Price
______________________________________________________.
B. This lesson will help you to become more practical through considering your
financial situation before involving yourself with any type of investments or
loans. It is important to know the amount that you may get after several periods
of time. Cite any situation where you apply practical decision in terms of
financial concern.
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
14
CO_Q2_General Mathematics SHS
Module 5
What I Can Do
Let’s be practical!
Submit on a long bond paper an essay containing your answer on the questions
above. You should note that the computation must be included in the front page
of your paper. The essay must consist of at least 5 sentences and a maximum of
10 sentences on why you must choose your payment options. Justify your answer
with the computations you had and your own personal reasons.
15
CO_Q2_General Mathematics SHS
Module 5
Below is the rubrics for you to be guided in this activity.
16
CO_Q2_General Mathematics SHS
Module 5
Lesson
Future and Present Values
2 of General Annuity
In this course, you will solve all sorts of general annuity problems. A general
annuity is an annuity where the payments do not coincide with the interest
periods. You will be able to see that it is very easy to deal with general annuities
once an equivalent interest rate is determined with that equivalent rate being
compounded as often as the payments are made.
What’s In
Why do you need to know investments, bonds, stocks, interests? Why is there a
need to invest your hard earned money?
For you to begin, consider the lesson on the previous module which is essential
in obtaining success in this lesson. General annuity is not like a simple annuity.
Unlike simple annuity, general annuity deals with different payment period and
interval period. Here, you have to convert the rate first before substituting the
values to the formula.
Definition
General Annuity is a type of annuity in which the payment period is not the
same as the interval period (conversion period). You will be able to easily identify
this .
17
CO_Q2_General Mathematics SHS
Module 5
Example:
A four-year lease agreement between Alfred and Thrifty Mall Inc. (TMI) indicates
that, Alfred pays TMI ₱100,000.00 at the end of every year if the agreed interest
rate is 5% compounded quarterly
In this example, the payment period is a whole year. However, the interest period
is quarterly or every 3 months. Hence, the annuity is a general annuity
In general ordinary annuities, payments are made at the end of each time
period. With annuities due, they're made at the beginning.
The terms used in simple annuity have the same meaning in general annuity.
18
CO_Q2_General Mathematics SHS
Module 5
What’s New
What is the present value of an annuity of ₱ 2,000.00 payable annually for 9 years
if the money is worth 5% compounded quarterly.
Guide Questions:
19
CO_Q2_General Mathematics SHS
Module 5
What is It
The future value of an annuity is the total accumulation of the payments and
interest earned. The present value of an annuity is the principal that must be
invested today to provide the regular payment of an annuity.
1 − (1 + 𝑖𝑖)−𝑛𝑛 (1+𝑖𝑖)𝑛𝑛 −1
𝐹𝐹 = 𝑅𝑅 ∗ � �
𝑃𝑃 = 𝑅𝑅 ∗ � � (1+𝑖𝑖)𝑏𝑏 −1
General Annuity (1 + 𝑖𝑖)𝑏𝑏 − 1
Where
Where
R-regular payment
R-regular payment
r-interest rate per period;
r-interest rate per period;
where i=r/m
where i=r/m
i-annual rate
i-annual rate
m-number of conversion
m-number of conversion
period in a year
period in a year
n-total number of conversion
n-total number of
periods
conversion
n = t(m)
periods
t – number of years
n = t(m)
t – number of years , where p is the
number of months in a
, where p is the
payment interval and c is the
number of months in a
number of months in a
payment interval and c is
compounding period.
the number of months in a
compounding period.
20
CO_Q2_General Mathematics SHS
Module 5
Example 2.A
If you will notice, the interest conversion period is different from the payment
interval. Since this is the case, we will refer to general annuity.
Consider the following given,
P = ₱ 2,000.00
n = 9(4) = 36
or 0.0125
c=3
p = 12
Using the formula in getting the present value of general annuity we will obtain:
1−(1+𝑖𝑖)−𝑛𝑛
𝑃𝑃 = 𝑅𝑅 ∗ � � then substituting the given facts, we will obtain
(1+𝑖𝑖)𝑏𝑏 −1
Example 2.B
Looking for the future value of the example above, let us use the given.
P = ₱ 2,000.00
n = 9(4) = 36
or 0.0125
c=3
p = 12
(1+𝑖𝑖)𝑛𝑛 −1
Using the formula for future value fo general annuity: 𝐹𝐹 = 𝑅𝑅 ∗ � �
(1+𝑖𝑖)𝑏𝑏 −1
(1 + 0.0125)36 − 1
𝐹𝐹 = 2000 � �
(1 + 0.0125)4 − 1
21
CO_Q2_General Mathematics SHS
Module 5
What’s More
Read each problem carefully and answer each question to solve the problem. Have
Fun!
Practice Activity 1
Hint: State the given. Identify which formula will be used. Substitute the
value to the formula.
(1+𝑖𝑖)𝑛𝑛 −1 1−(1+𝑖𝑖)−𝑛𝑛
𝐹𝐹 = 𝑅𝑅 ∗ � � 𝑃𝑃 = 𝑅𝑅 ∗ � �
(1+𝑖𝑖)𝑏𝑏 −1 (1+𝑖𝑖)𝑏𝑏 −1
Independent Activity 1
Annual payments of ₱1,000.00 at the end of each term for 8 years with
interest rate of 6% compounded quarterly. Find the present and the
future value.
22
CO_Q2_General Mathematics SHS
Module 5
What I Have Learned
B. Write down the differences and similarities between Simple Annuity and
General Annuity.
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________.
23
CO_Q2_General Mathematics SHS
Module 5
What I Can Do
Ask someone borrowing from a five-six (Bumbay) money lender. How much will
be charged if you want to loan ₱ 5,000.00, payable in one year? Determine the
interest rate per period and the annual interest rate. Is it a good loan term? Why
or why not?
Submit on a long bond paper an essay containing your answer on the questions
above. You should note that the computation must be included in the front page
of your paper. Then essay must consist of at least 5 sentences and a maximum
of 10 sentences on why you must chose your answer. Justify your answer with
the computations you had and your own personal reasons.
Ideas Presents ideas Presents ideas Ideas are too Ideas are
in an original in a consistent general. vague or
manner manner unclear.
24
CO_Q2_General Mathematics SHS
Module 5
Assessment
Multiple Choice. Choose the letter of the best answer. Write the chosen letter on
a separate sheet of paper.
1. What is the present value of the simple annuity of ₱ 5,000.00 payable semi-
annually for 10 years if money is worth 6% compounded semi-annually?
a. ₱ 74,387.37
b. ₱ 67,200.42
c. ₱ 81,600.96
d. ₱ 34,351.87
2. With the same given in number 1, what is the accumulated amount (future
value)?
a. ₱ 74,387.37
b. ₱ 67,200.42
c. ₱ 81,600.96
d. ₱ 134,351.87
5. What is the annual interest rate of the insurance policy converted to decimal?
a. 0.15
b. 0.015
c. 0.125
d. 0.0125
25
CO_Q2_General Mathematics SHS
Module 5
6. How much does he expect to withdraw on the maturity of his policy?
a. ₱ 800,519.00
b. ₱ 798,716.74
c. ₱ 748,619.74
d. ₱ 543,519.84
9. How much should he deposit in his bank to get ₱ 50,000 after 5.5 years?
a. ₱ 752.46
b. ₱ 762.46
c. ₱ 764.52
d. ₱ 765.42
26
CO_Q2_General Mathematics SHS
Module 5
For number 10 and 11, refer to the situation below.
The buyer of a car pay ₱300,000.00 cash as downpayment and is going to pay
₱12,000.00 monthly for 5 years if money is worth 12% compounded monthly.
10. How much more will he be disbursing (present value) after paying the
downpayment amount?
a. ₱ 529,360.04
b. ₱ 539,460.09
c. ₱ 539,730.07
d. ₱ 589,733.43
12. Find the future value of an annuity of ₱ 10,000.00 payable quarterly for 3
years if money is worth 12% compounded monthly.
a. ₱ 33,596.60
b. ₱ 33,695.60
c. ₱ 33,965.60
d. ₱ 33,956.60
13. What is the present value of an annuity of ₱ 5,000.00 payable quarterly for
10 years If money is worth 5% per year compounded annually?
a. ₱ 345,590.98
b. ₱ 345,950.98
c. ₱ 349,550.98
d. ₱ 394,055.98
14. Find the future value of an annuity of ₱10,000.00 payable quarterly for 5
years if money is worth 12% compounded monthly.
a. ₱ 64,395.55
b. ₱ 64,935.55
c. ₱ 69,435.55
d. ₱ 69,534.55
15. Find the present value of an annuity of ₱20,000.00 payable semi-annually for
5 years if money is worth 6% per year compounded quarterly.
a. ₱120,640.00
b. ₱ 145,022.80
c. ₱ 170,408.33
d. ₱186,640.00
27
CO_Q2_General Mathematics SHS
Module 5
Additional Activities
B. An cellphone is for sale at either (a) ₱15,999.00 cash or, (b) on terms,
₱1,499.00 each month for 12 months. Money is 9% compounded monthly.
Which is lower, the cash price or the present value of the installment
terms? Explain. Write your computation on the box provided below.
Explanation:
28
CO_Q2_General Mathematics SHS
Module 5
Module 5
CO_Q2_General Mathematics SHS
29
What's More
Practice Activity 1
P=₱32,702.87
F= ₱48,594.74
Independent Activity 1
P= ₱100,402.90
F= ₱406,524.60
Practice Activity 2
₱19,215.84
Independent Activity 2
₱2,028.21
Practice Activity 3
₱733,784.43
What I Know Assessment
1. A 1. A
2. B Independent Activity 3 2. D
3. A 3. C
₱874,214.81
4. B 4. D
5. C 5. D
6. D Practice Activity 4 6. C
7. C 7. B
8. A P= ₱7,327.48 8. C
9. B 9. A
F= ₱3,318.54
10. B 10.B
11. D 11. B
12. D Independen Activity 4 12. C
13. A 13. C
14. C P= ₱6,176.42 14. A
15. C 15. B
F= ₱9,946.04
Answer Key
References
Alday, E. M., Batisan, R. S., & Caraan, A. M. (2016). General Mathematics.
Makati City: Diwa Learning Systems Inc.
Cox, J. (2020, February 19). ThoughtCo. Retrieved June 10, 2020, from
https://www.thoughtco.com/essay-rubric-
2081367#:~:text=An%20essay%20rubric%20is%20a,organized%20into%
20one%20convenient%20paper.
30
CO_Q2_General Mathematics SHS
Module 5
For inquiries or feedback, please write or call:
Republic Act 8293, section 176 states that: No copyright shall subsist in any work of
the Government of the Philippines. However, prior approval of the government agency or office
wherein the work is created shall be necessary for exploitation of such work for profit. Such
agency or office may, among other things, impose as a condition the payment of royalties.
Borrowed materials (i.e., songs, stories, poems, pictures, photos, brand names,
trademarks, etc.) included in this module are owned by their respective copyright holders.
Every effort has been exerted to locate and seek permission to use these materials from their
respective copyright owners. The publisher and authors do not represent nor claim ownership
over them.
Each SLM is composed of different parts. Each part shall guide you step-by-
step as you discover and understand the lesson prepared for you.
In addition to the material in the main text, Notes to the Teacher are also
provided to our facilitators and parents for strategies and reminders on how they can
best help you on your home-based learning.
Please use this module with care. Do not put unnecessary marks on any part
of this SLM. Use a separate sheet of paper in answering the exercises and tests. And
read the instructions carefully before performing each task.
If you have any questions in using this SLM or any difficulty in answering the
tasks in this module, do not hesitate to consult your teacher or facilitator.
Thank you.
What I Need to Know
This module was written and developed for students to know how to calculate the
fair market value of a cash flow whether inflow or outflow that includes an annuity.
The topic to be discussed in this module includes comparing and computing the fair
market value of goods or properties which is essential in dealing with the next
chapter. The language used in this module is appropriate to the diverse
communication and language ability of the learners.
What I Know
Choose the letter of the best answer. Write your chosen letter on a separate sheet of
paper.
1. What is the term that refers to payment received or payments or deposits made?
a. annuity
b. cash flow
c. fair market value
d. general annuity
2. What is defined as an annuity where the length of the payment interval is not
the same as the length of the interest compounding period?
a. cash flow
b. fair market value
c. general annuity
d. general ordinary annuity
5. It refers to a single amount that is equivalent to the value of the payments stream
at that date.
a. annuity
b. cash flow
c. down payment
d. fair market value
6. It is a general annuity in which the periodic payment is made at the end of the
payment interval.
a. annuity
b. cash flow
c. general annuity
d. general ordinary annuity
7. What is the present value of quarterly payments of ₱ 2,000 for 5 years with an
interest rate of 8% compounded quarterly?
a. ₱ 32,702.87
b. ₱ 34,702.87
c. ₱ 33,702.87
d. ₱ 31,702.87
1+(1+𝑗𝑗)−𝑛𝑛
b. 𝐹𝐹 = 𝑅𝑅
𝑗𝑗
(1+𝑗𝑗)𝑛𝑛 −1
c. 𝐹𝐹 = 𝑅𝑅
𝑗𝑗
(1+𝑗𝑗)𝑛𝑛 +1
d. 𝐹𝐹 = 𝑅𝑅
𝑗𝑗
9. What do you call a specific time chosen to compare the time value of one or more
dated sums of money?
a. economic value
b. focal date
c. future value
d. present value
12. How much is the fair market value of shoes if a vendor sells it for ₱1,200.
Cedric offers to buy it at ₱1,000 and they agreed at the middle price?
a. ₱1,100
b. ₱1,150
c. ₱1,175
d. ₱1,050
(1+𝑗𝑗)𝑛𝑛 −1
13. What is R in the formula 𝐹𝐹 = 𝑅𝑅 ?
𝑗𝑗
a. future value
b. present value
c. regular payment
d. time
14. How much is the fair market value of the truck if it is originally sold at ₱ 250,000
and Dan offered to buy the truck at ₱ 225,000 to which the seller agreed?
a. ₱ 275,000
b. ₱ 225,000
c. ₱ 250,000
d. ₱ 237,500
Fair market value is the price an asset can be sold in the open market when certain
conditions are met. The conditions are as follows: the parties involved are aware of
all the facts, are acting in their own interest, are free of any pressure to buy or sell,
and have ample time to make decisions. This module focuses on calculating the fair
market value of a cash flow stream on an annuity.
What’s In
Since our discussion in this module is anchored on the idea of general annuity, let
us recall some concepts from the previous lessons on the future and the present
values of a general annuity. In this way, it will be easier for you to understand the
lesson.
Let us start with the difference between a general annuity and general ordinary
annuity. A general annuity is defined as an annuity where the length of the payment
interval is not the same as the length of the interest compounding period, while the
general ordinary annuity is a general annuity in which the periodic payment is made
at the end of the payment interval.
Let us also recall how to determine the future and present value of a general ordinary
annuity. The future value F and the present value P of a general ordinary annuity is
given by
(1+j)n −1 1−(1+j)−n
F=R and P=R
j j
Solution:
Given: R = ₱ 3,000
term t = 6 months
interest rate per annum i(12) = 0.09
number of conversions per year m = 12
0.09
interest rate per period 𝑗𝑗 = = 0.0075
12
3,000
3,000(1+0.0075)
3,000(1+0.0075)2
3,000(1+0.0075)3
3,000(1+0.0075)4
3.000(1+0.0075)5
c.) Adding all the future values obtained from the previous step.
3,000 = 3,000
3,000(1+0.0075) = 3,022.5
3,000(1+0.0075)2 = 3,045.16875
3,000(1+0.0075)3 = 3,068.00752
3,000(1+0.0075)4 = 3,091.01757
3,000(1+0.0075)5 = 3,114.20020
F =18,340.89
(1+0.0075)6 −1
𝐹𝐹 = 3,000
0.0075
𝐹𝐹 = 18,340.89
Example 2: Suppose Mrs. Remoto (in problem no.1) would like to know the present
value of her monthly deposit of ₱ 3,000 when interest is compounded monthly. How
much is the present value of her savings at the end of 6 months?
Solution:
Given: R = ₱3,000
term t = 6 months
b.) Discount the payment of each period to the beginning of the term that is,
find the present value of each payment. Recall the formula:
𝐹𝐹 3,000
𝑃𝑃 = 𝑚𝑚𝑚𝑚 = = 3,000(1.0075)−𝑡𝑡
𝑖𝑖 𝑚𝑚 1.0075𝑡𝑡
�1 + �
𝑚𝑚
0 1 2 3 4 5 6
3,000(1.0075)-1
3,000(1.0075)-2
3,000(1.0075)-3
3,000(1.0075)-4
3,000(1.0075)-5
3,000(1.0075)-6
3,000(1.0075)-1 = 2,977.667
3,000(1.0075)-2 = 2,955.501
3,000(1.0075)-3 = 2,933.50
3,000(1.0075)-4 = 2,911.663
3,000(1.0075)-5 = 2,889.988
3,000(1.0075)-6 = 2,868.474
P =17,536.79
1−(1+0.0075)−6
𝑃𝑃 = 3,000
0.0075
𝑃𝑃 = 17,536.79
Examples 3 and 4 are left for you to try to find the future value (F) and present
value (P).
Example 3: In order to save for her high school graduation, Marie decided to save ₱
200 at the end of each month. If the bank pays 0.250% compounded monthly, how
much will her money be at the end of 6 years?
Example 4: Mr. Ribaya paid ₱ 200,000 as a down payment for the car. The remaining
amount is to be settled by paying ₱16,200 at the end of each month for 5 years. If
interest is 10.5% compounded monthly, what is the cash price of his car.
𝐹𝐹
𝐹𝐹 = 𝑃𝑃 (1 + 𝑗𝑗)𝑛𝑛 and 𝑃𝑃 = (1+𝑗𝑗)𝑛𝑛
CONCEPT MAPPING: Make a concept map from the given words below by arranging
the word into an idea and connect by either a word or a phrase.
(1 + 𝑗𝑗)𝑛𝑛 − 1
𝐹𝐹 = 𝑅𝑅
𝑗𝑗 Annuity
Future
Value
Fair General
Cash Market ordinary
Flow Value annuity
General Present
annuity 1 − (1 + 𝑗𝑗)−𝑛𝑛
𝑃𝑃 = 𝑅𝑅 Value
𝑗𝑗
Total
Concept maps are visual representations of information. They can take the form of
charts, graphic organizers, tables, flowcharts, Venn diagrams, timelines, or T-charts.
Concept maps are especially useful for students who learn better visually, although
they can benefit any type of learner.
In the previous activity, you need to arrange the given words logically in the form of
either chart, organizers, flowcharts, etc. and connect the words by either word or
phrase to convey a meaningful idea. The concept you have formed will be essential
in the discussion of this topic.
If you find difficulty in doing the activity, that is okay because after you read more
about this module on how to determine the fair market value of a cash flow stream,
you are free to go back to our activity and try to re-arrange the words in a logical
way.
Cash flow is a term that refers to payments received (cash inflows) or payments or
deposits made (cash outflows). Cash inflows can be represented by positive numbers
and cash outflows can be represented by negative numbers. It is also the amount of
cash and cash-equivalents being transferred into and out of the business.
The fair market value or economic value of cash flow (payment stream) on a
particular date refers to a single amount that is equivalent to the value of the
payments stream at that date. This particular date is called the focal date. In its
simplest sense, fair market value (FMV) is the price that an asset would sell for on
the open market.
Example 1. Mr. Ribaya received two offers on a lot that he wants to sell. Mr. Ocampo
has offered ₱ 50,000 and a ₱1 million lump-sum payment 5 years from now. Mr.
Cruz has offered ₱ 50,000 plus ₱ 40,000 every quarter for five years. Compare the
fair market values of the two offers if money can earn 5% compounded annually.
Which offer has a higher market value?
Solution:
Let us illustrate the cash flows of the two offers using time diagrams.
50,000 1 million
0 1 2 3 4 5
Mr. Cruz’s offer:
50,000
40,000 40,000 40,000 … 40,000
0 1 2 3 … 20
Choose a focal date and determine the values of the two offers at that focal
date. For example, the focal date can be the date at the start of the term.
Since the focal date is at t=0, compute for the present value of each other.
Mr. Ocampo’s offer: Since ₱ 50,000 is offered today, then its present value is still
₱50,000. The present value of ₱ 1,000,000 offered 5 years from now is:
𝑃𝑃 = 𝐹𝐹(1 + 𝑗𝑗)−𝑛𝑛
𝑃𝑃 = 1,000,000 (1 + 0.05)−5
𝑃𝑃 = ₱ 783,526.17
= 50,000+ 783,526.17
FMV = ₱ 833,526.17
𝐹𝐹1 = 𝐹𝐹2
(4)(5) (1)(5)
𝑖𝑖 4 𝑖𝑖 1
𝑃𝑃 �1 + � = 𝑃𝑃 �1 + �
4 1
20
𝑖𝑖 4 0.05 5
�1 + � = �1 + �
4 1
𝑖𝑖 4
1+ = (1.05)1/4
4
𝑖𝑖 (4)
= (1.05)1/4 − 1
4
𝑖𝑖 (4)
= 0.01227
4
1− (1+0.1227)−20
𝑃𝑃 = 40,000
0.012272
𝑃𝑃 = ₱ 705,588.40
= 50,000 + 705,588.40
(FMV) = ₱ 755.588.40
Hence, Mr. Ocampo’s offer has a higher market value. The difference between the
market values of the two offers at the start of the term is
The future value of ₱1,000,000 at the end of the term at 5% compounded annually
is given by
𝐹𝐹 = 𝑃𝑃 (1 + 𝑗𝑗)𝑛𝑛
𝐹𝐹 = 50,000 (1 + 0.05)5
𝐹𝐹 = 63,814.08
The fair market value of this offer at the end of the term is 63,814.08 plus ₱
1,000,000 amounting to ₱ 1,063,814.08.
(1+0.01227)20−1
𝐹𝐹 = 40,000
0.012272
𝐹𝐹 = 900,489.71
The future value of 50,000 at the end of the term is ₱63,814.08, which was already
determined earlier.
As expected, Mr. Ocampo’s offer still has a higher market value, even if the local
date was chosen to be at the end of the term. The difference between the market
values of the two offers at the end of the term is
You can also check that the present value of the difference is the same as the
difference when the focal date was at the start of the term:
Example 2. Company A offers ₱150,000 at the end of 3 years plus ₱300,000 at the
end of 5 years. Company B offers ₱25,000 at the end of each quarter for the next 5
years. Assume that money is worth 8% compounded annually. Which offers has a
better market value?
Given:
Company A Company B
₱150,000 at the end of 3 years ₱25,000 at the end of each
₱300,000 at the end of 5 years quarter for the next 5 years
Solution:
Illustrate the cash flow of the two offers using time diagrams.
Company A offer:
150,000 300,000
0 1 2 3 4 5
Company B offer:
Company A offer:
𝑃𝑃1 = 𝐹𝐹 (1 + 𝑗𝑗)−𝑛𝑛
𝑃𝑃1 = ₱ 118,547.18
𝑃𝑃2 = 𝐹𝐹 (1 + 𝑗𝑗)−𝑛𝑛
𝑃𝑃2 = ₱ 202,669.25
= 118,547.18 + 202,669.25
=₱321.216.43
Compute for the present value of a general annuity with quarterly payments but
with semi-annual compounding at 8%.
𝐹𝐹1 = 𝐹𝐹2
(4)(5) (2)(5)
𝑖𝑖 4 𝑖𝑖 2
𝑃𝑃 �1 + � = 𝑃𝑃 �1 + �
4 2
20
𝑖𝑖 4 0.08 10
�1 + � = �1 + �
4 2
1
𝑖𝑖 4
1 + = (1.04)(2)
4
1
𝑖𝑖 4
= (1.04)(2) − 1
4
𝑖𝑖 4
= 0.01980
4
1 − (1 + 𝑗𝑗) −𝑛𝑛
𝑃𝑃 = 𝑅𝑅
𝑗𝑗
1 – (1 + 0.01980) −20
𝑃𝑃 = 25,000
0.01980
𝑃𝑃 = ₱ 409,575.91
Example 3. Kat received two offers for investment. The first one is ₱150,000 every
year for 5 years at 9% compounded annually. The other investment scheme is
₱12,000 per month for 5 years with the same interest rate. Which fair market
value between these offers is preferable?
Solution:
Let the focal point be the end of the term, and so, compute for the future
value.
(1+0.09)5 −1
𝐹𝐹 = 150,000
0.09
𝐹𝐹 = ₱ 897,706.59
(12)
𝑖𝑖 (12)
�1 + � = (1 + 0.09)
12
1
𝑖𝑖 (12)
= (1.09)(12) − 1
12
𝑖𝑖 (12)
= 𝑗𝑗 = 0.00721
12
60
𝑜𝑜0𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝
–1
𝑝𝑝𝑝𝑝[=𝑙𝑙1+0.00721)
𝐹𝐹 = 12,000 0.00721
𝐹𝐹 = ₱ 896,869.86
Activity 1.1
Complete the table by computing the future value and present value of an ordinary
annuity given the following conditions.
Activity 1.2
Complete the table by filling up the columns with the required values.
Converted
R im m t n interest F P
rate (j)
Monthly payments of
₱ 2,000 for 5 years with an
1.
interest rate of 12%
compounded quarterly.
Quarterly payments of
₱ 15,000 for 10 years with
2.
an interest rate of 8%
compounded annually.
Semi-annual payments of ₱
150,000 with an interest
3.
rate of 6% compounded
annually for 6 years.
1. The buyer of a car pays ₱ 169,000 cash and ₱ 12,000 every month for 5
years. If money is 10% compounded monthly, how much s the cash price
of the car?
2. The buyer of a lot pays ₱ 50,000 cash and ₱ 10,000 every month for 10
years. If money is 8% compounded monthly how much is the cash value
of the lot?
Fill in each blank with correct word or words to complete each statement.
Answer the problem given below by showing your complete solution and your
decision on a sheet of paper.
Assessment
(1+𝑗𝑗)𝑛𝑛 − 1
2. The formula 𝑅𝑅 is used to determine the __________ of an ordinary
𝑗𝑗
annuity.
a. annuity
b. cash flow
c. future value
d. present value
6. It is the price an asset would sell for on the open market when certain
conditions are met.
a. annuity
b. cash flow
c. down payment
d. fair market value
9. It is an annuity where the length of the payment interval is not the same as
the length of the interest compounding period.
a. cash flow
b. fair market value
c. general annuity
d. general ordinary annuity
1−(1+𝑗𝑗)−𝑛𝑛
10. The formula 𝑅𝑅 is used to determine the __________ of an ordinary
𝑗𝑗
annuity.
a. future value
b. present value
c. real value
d. zero value
a. cash flow
b. fair market value
c. general annuity
d. general ordinary annuity
12. What is the future value of an ordinary annuity having daily payments of ₱
50 for 30 days with an interest rate of 20% compounded daily?
a. ₱ 1,611.98
b. ₱ 1,511.98
c. ₱ 1,411.98
d. ₱ 1,311.98
13. A store sells a washing machine. Mark offers to give a down payment of
₱5,000 and pay ₱6,000 at the end of every 6 months for two years. Assuming
that the money compounds by 3% monthly. What is the economic value of
the washing machine?
a. ₱ 24,545.42
b. ₱ 23,126.31
c. ₱ 20,000
d. ₱ 28,126.31
(1+𝑗𝑗)𝑛𝑛 −1
14. What is n in the formula 𝐹𝐹 = 𝑅𝑅 ?
𝑗𝑗
a. future value
b. present value
c. number of payments
d. regular payment
15. What is the present value of an ordinary annuity having daily payments of
₱ 50 for 30 days with an interest rate of 20% compounded daily?
a. ₱ 1,587.33
b. ₱ 1,487.33
c. ₱ 1,387.33
d. ₱ 1,687.33
Decide on the following problems by determining the fair market value. Show
your solutions in a sheet of paper together with your decision on the problem.
Republic Act 8293, section 176 states that: No copyright shall subsist in any work of
the Government of the Philippines. However, prior approval of the government agency or office
wherein the work is created shall be necessary for exploitation of such work for profit. Such
agency or office may, among other things, impose as a condition the payment of royalties.
Borrowed materials (i.e., songs, stories, poems, pictures, photos, brand names,
trademarks, etc.) included in this module are owned by their respective copyright holders.
Every effort has been exerted to locate and seek permission to use these materials from their
respective copyright owners. The publisher and authors do not represent nor claim ownership
over them.
Each SLM is composed of different parts. Each part shall guide you
step-by-step as you discover and understand the lesson prepared for you.
In addition to the material in the main text, Notes to the Teacher are
also provided to our facilitators and parents for strategies and reminders on
how they can best help you on your home-based learning.
Please use this module with care. Do not put unnecessary marks on
any part of this SLM. Use a separate sheet of paper in answering the exercises
and tests. And read the instructions carefully before performing each task.
Thank you.
What I Need to Know
Previously, you learned how to solve simple and general annuity. So far, all
the problems on finding present and future values only dealt with a single cash flow
which is either invested at the start (for future value problems) or to receive at the
end (for present value problems). However, most of the financial events happening in
people’s lives rarely happen in just a single event. It is common for workers to receive
their salary twice a month or monthly, to pay loans, electricity, water, phone, and
other utility bills monthly, and likewise, be able to set aside savings regularly with
these normal routines in mind, it is then important to be able to set up a method to
efficiently compute the future and the present value of a regular stream of cash
flows.
This module will help you understand and explore deferred annuity or an
annuity whose payments do not necessarily start at the beginning or at the end of
the next compounding period. Example of which is the monthly pension that will
start after five years if a certain employee avails the five-year lump sum upon
retirement.
1. calculate the present value and period of deferral of a deferred annuity; and
1
CO_Q2_General Mathematics SHS
Module 7
What I Know
Let’s find out how far you might already know about this topic! Please take
this challenge! Have Fun!
Directions: Choose the letter of the best answer. Write the chosen letter on a separate
sheet of paper.
1. A credit card company offers a deferred payment option for the purchase of
any appliance. Rose plans to buy a smart television set with monthly payment
of ₱ 4,000.00 for two years. The payment will start at the end of 3 months. If
it is 10% compounded monthly, what is the period of deferral?
a. 1 c. 3
b. 2 d. 4
2. What are the actual payments should Rosa make in the situation in
question number 1?
a. 2 c. 24
b. 4 d. 26
3. What is the present value of the television set in the situation in question
number 1?
a. ₱ 30,519.20 c. ₱ 85,260.53
b. ₱ 78,716.74 d. ₱ 143,519.84
4. What is the period of deferral if monthly payment of ₱ 2,000.00 for 8 years will start
a. 4 c. 6
b. 5 d. 9
2
CO_Q2_General Mathematics SHS
Module 7
5. Which of the following annuity below does not begin until a given time interval
has passed?
a. 5 c. 11
b. 7 d. 12
10. Mariel purchased a smart television set through the credit cooperative of their
company. The cooperative provides an option for a deferred payment. Mariel
decided to pay after 2 months of purchase. Her monthly payment is computed
at ₱ 3,800.00 payable in 12 months. If the interest rate is 12% convertible
monthly, what is the period of deferral?
a. 1 c. 3
b. 2 d. 12
11. What is the present value of the television set in the situation in question
number 10?
a. ₱ 41,800.00 c. ₱ 42,345.84
b. ₱ 41,854.14 d. ₱ 46,816.00
3
CO_Q2_General Mathematics SHS
Module 7
12. An employee, preparing for his retirement 20 years from now, agreed to
pay an insurance company ₱ 20,000.00 every year until retirement in
exchange of yearly pension for 25 years. If the insurance company puts
the payment in an account providing 2.3% annual compound interest,
how much yearly pension can he receive?
a. ₱ 26,559.85 C. ₱ 31,254. 12
b. ₱ 29,457.63 D. ₱ 32,127.23
14. An agricultural loan is to be repaid quarterly for 5 years that will start at
the end of 2 years. If the interest rate is 6% converted quarterly, how much
is the loan if the quarterly payment is ₱ 10,000.00?
a. ₱ 154,694.03 c. ₱ 163,215.12
b. ₱ 157,455.08 d. ₱ 173,234.05
15. Ana converted her loan to light payments which gives her an option to pay
₱ 1,500.00 every month for 2 years. The first payment is due 3 months
from now. How much is the amount of the loan if the interest rate is 9%
converted monthly?
a. ₱ 29,245.60 c. ₱ 32,105.25
b. ₱ 29,725.55 d. ₱ 32,346.70
4
CO_Q2_General Mathematics SHS
Module 7
Lesson
7 Deferred Annuity
People are always looking for ways to supplement their existing financial
strategies, best investment, continuous growth, and ways to save for retirement for
longer periods. A deferred annuity is one tool that can serve just such a purpose.
Also, it is a contract with an insurance company that promises to pay the owner a
regular income, or a lump sum, at some future date. Investors often use deferred
annuities to supplement their other retirement income or benefits, such as Social
Security (retirement, disability, and supplemental benefits. If you have several years
until retirement, a deferred annuity could make sense for you.
What’s In
5
CO_Q2_General Mathematics SHS
Module 7
Review on how to calculate the present value of an annuity immediate or ordinary
annuity:
Solution:
term t = 1 year
Find: P
𝑖𝑖 (12)
The interest per period is 𝑗𝑗 = = 0.0075
𝑚𝑚
1−(1+𝑗𝑗)−𝑛𝑛 1−(1+0.0075)−12
P =R� � = 2500 � � = 28, 587.28
𝑗𝑗 0.0075
6
CO_Q2_General Mathematics SHS
Module 7
What’s New
Recall the previous scenario. What if the senior high school student is
considering a different payment scheme to buy the cellular phone? In this scheme,
he has to pay ₱ 2,500.00 monthly for 1 year starting at the end of the fourth month.
If the interest rate is 9% converted monthly, how much is the cash value of the
cellular phone?
In this example, the senior high school student will start paying at the end of
the 4th month up to the end of the 15th month. The time diagram for his option is
given by:
0 1 2 3 4 5 … 15
Assume payments are also being made during the period of deferral;
Step 1 in other words, there are no skipped payments. The associate time
diagram is:
P =?
2500 2500 2500 2500 2500 … R
0 1 2 3 4 5 … 15
From the previous lesson, the present value P of the ordinary annuity is given by
1−(1+𝑗𝑗)−𝑛𝑛 1−(1+0.0075)−15
P =R� �= 2500 � �= 35, 342.49
𝑗𝑗 𝑗𝑗
Therefore, the present value P with assumed payments starting the first month up
to the fifteenth month is ₱ 35, 342.49
Step 2 Find the present value of the payments made during the period of
deferral. Based on the problem, the payments will start at the end of
the fourth month thus, there will be 3 payments during the period of
deferral.
1−(1+𝑗𝑗)−𝑛𝑛 1−(1+0.0075) −3
P=R� �= 2500� �= 7,388.89
𝑗𝑗 𝑗𝑗
7
CO_Q2_General Mathematics SHS
Module 7
Since the payments in the period of deferral are artificial payments,
Step 3 subtract the present value of these payments from present value P
with assumed payments starting the first month up to the fifteenth,
thus
Recall the present value P of scenario 1 in the first activity which is equal to
₱ 28,587.28. Comparing this to the present value in, What’s New activity which is
equal to ₱ 27,953.60. It is lower than the present value in the first because the
payment in the second scheme will be received on a later date.
8
CO_Q2_General Mathematics SHS
Module 7
What is It
Deferred annuities are series of payments, as they have already learned in the past
lessons on annuities but, will start on a later date.
Deferred Annuity is an annuity that does not begin until a given time interval has
passed. It is a kind of annuity which payments (or deposits) starts in more than one
period from the present. Likewise, the first payment interval does not coincide with
the first interest period and it is put off to some later date.
Period of Deferral is the time between the purchase of an annuity and the start of
the payments for the deferred annuity.
9
CO_Q2_General Mathematics SHS
Module 7
Time Diagram for a Deferred Annuity
Deferred annuity of n payment
R* R*… R* R R …… R
To determine the present value of a deferred annuity, find the present value
of all k + n payments (including the artificial payments), then subtract the present
value of all artificial payments.
To get the Present value of a deferred annuity we will follow the formula:
1−(1+𝑗𝑗)−(𝑘𝑘+𝑛𝑛) 1−(1+𝑗𝑗)−𝑘𝑘
P=R -R
𝑗𝑗 𝑗𝑗
Where:
R = Present Payment
j = Interest rate per period
n = number of actual payments
k = number of conversation periods in the deferral or number of
artificial payments
Example 1
Solution:
Consider an 8-year timeline for the illustration.
To visualize and find d, we have
1st payment
(P1)
P2 P3 P4 P5 P6 P7 P8 P9 P10
1 2 3 4 5 6 7 8
k = 5 (see circles with x)
10
CO_Q2_General Mathematics SHS
Module 7
Given: R = ₱ 2,000.00 t=5
r = 8% m=2
Find: P
1−(1+𝑗𝑗)−(𝑘𝑘+𝑛𝑛) 1−(1+𝑗𝑗)−𝑘𝑘
P=R -R
𝑗𝑗 𝑗𝑗
1−(1+𝑗𝑗)−(5+10) 1−(1+𝑗𝑗)−5
P=R -R
𝑗𝑗 𝑗𝑗
1−(1+𝑗𝑗)−(5+10) 1−(1+𝑗𝑗)−5
= 2000 - 2000 or
0.04 0.04
1− (1+0.04)−(5+10) 1− (1+0.04)−5
= 2000 � − �
0.04 0.04
= ₱ 13,333.13
Example 2
Find the present value of a deferred annuity of ₱ 1,500.00 every 3 months for 8
years that is deferred 3 years if money is worth 6% converted or compounded
quarterly
Solution:
Given: R = ₱ 1500.00 t = 8 years Find: P
r = 6%, m= 4
If you assume that there are payments in the period of deferral, there would be a
total of k + n = 12 + 32 = 44 payments
1st Payment (P1)
12 32
1 2 3 4 5 6 7 8 9 10 11
1−(1+𝑗𝑗)−(𝑘𝑘+𝑛𝑛) 1−(1+𝑗𝑗)−𝑘𝑘
P=R -R
𝑗𝑗 𝑗𝑗
1− (1+0.015)−(12+ 32) 1− (1+0.015)−12
= 1500 � − �
0.015 0.015
= ₱ 31,699.68
11
CO_Q2_General Mathematics SHS
Module 7
Example 3:
Find the period of deferral in each of the following deferral annuity problem
(one way to find the period of deferral is to count the number of artificial
payment (k)).
a. Monthly payment of ₱12,000.00 for 9 years that will start 6 months from now.
Skip payment
0 1 2 3 4 5 6 7 8 9
b. Semi-annual payments of ₱7,500.00 for 15 years that will start 4 years from
now.
Skip payment
12
CO_Q2_General Mathematics SHS
Module 7
What’s More
Directions: Read each problem carefully and answer each question to solve the
problem. Have Fun!
Activity 1.1
Find the period of deferral in each of the following deferral annuity problems (one
way to find the period of deferral is to count the number of artificial payment (k).
Make a diagram.
1. Payment of ₱ 3,000.00 every 3 months for 8 years that will start 6 years
Time Diagram Answer
2. Payment of ₱ 1,000.00 every other month for 2 years that will start after
3 years.
Time Diagram Answer
3. Payment of ₱ 700.00 every month for one (1) year that will start at the
end of the third month
Time Diagram Answer
4. Payment of ₱ 400.00 every 5 months for 3 years that will start at the
end of 5 years.
Time Diagram Answer
13
CO_Q2_General Mathematics SHS
Module 7
5. Semi-annual payment of ₱ 12,000.00 for twelve (12) years that will start
after 5 years.
Activity 1.2
Directions: Read each problem carefully about calculating the present value and
period of deferral of a deferred annuity and perform the appropriate
solutions to answer the problem.
1. A group of college students decided to invest the money they earned from
the fund-raising project. After 6 months from today, they want to withdraw
from this fund ₱ 10,000.00 quarterly for 1 year to fund for community
service. How much is the present total deposit if the interest rate is 4%
converted quarterly?
2. A company offers a deferred payment option for the purchase of any
furniture. Gladys plans to buy a dining table set with a monthly payment
of ₱ 4,000.00 for 2 years. The payment will start at the end of 3 months.
How much is the cash price of the dining set if the company will give 10%
compounded monthly?
14
CO_Q2_General Mathematics SHS
Module 7
What I Have Learned
A. Directions: Fill in the blanks below with the correct term to make each
statement true about calculating the present value and period of deferral of a
deferred annuity.
1. A deferred annuity is an annuity whose payments starts in more than
period from the ________.
2. Each payment in an annuity is called the ________.
3. A deferred annuity is an annuity whose first payment takes place at some
predetermined time ______.
4. In retirement planning, payments on income taxes are deferred until you
______ the money.
Answer the following questions about calculating the present value and period
of deferral of a deferred annuity.
_________________________________________________________________________
_____________________________________________________________________
_________________________________________________________________________
_____________________________________________________________________
________________________________________________________________________
____________________________________________________________________
B. Explain the basic types of deferred annuities: fixed, indexed, variable, and
longevity.
15
CO_Q2_General Mathematics SHS
Module 7
What I Can Do
Directions: Create your own loan plan with complete computations using the
applications of Annuity on a short bond paper. Explain using five
sentence paragraph the importance of annuity in your daily life on a
separate sheet of yellow pad paper.
Rubrics
Content 100% of the answers 80-99% of the 60-79% of the Below 60% of the
Accuracy (20) and computations are answers and answers and answers and
correct. (20) computations are computations are computations are
correct. (17) correct. (14) correct. (11)
Organization of All sentences are very All sentences are Some ideas are Ideas are
Ideas (10) clear, and the ideas clear, and the not clear and disorganized and
are very organized. ideas are inorganized but not clear. (4)
(10) organized. overall, ideas are
(8) acceptable. (6)
16
CO_Q2_General Mathematics SHS
Module 7
Assessment
Directions: Read the following questions about calculating the present value and
period of deferral of a deferred annuity and choose the correct answer by
writing the letter on a separate sheet of paper.
a. ₱ 10,330.31 c. ₱ 15,841.12
b. ₱ 13,333.13 d. ₱ 17,332.25
settlement option
c. Once the payout period begins, the annuitant receives periodic
payments
d. The accumulation period is the period prior to the annuitization date
A farmer decided to sell his land and to deposit the fund in a bank. After
computing the interest, he learned that he may withdraw ₱ 390,500.00 yearly for
10 years starting at the end of 6 years when it is time for him to retire. How
much is the fund deposited if the interest rate is 5% converted annually?
a. 4 c. 6
b. 5 d. 10
a. ₱ 2,005,197.75 c. ₱ 2,362,595.82
b. ₱ 2,344,592.24 d. ₱ 4,215,120.15
17
CO_Q2_General Mathematics SHS
Module 7
5. Gladys borrows ₱ 400,000.00 at an interest rate of 4% per year compounded semi-
annually. She agreed to settle her loan by making 12 semi-annual payments at
the end of each six months. If the first payment is made at the end of 2 years, how
much is the periodic payment?
a. ₱ 80,756.35 c. ₱ 40,138.96
b. ₱ 76,348.25 d. ₱ 49,165.39
a. 7 c. 9
b. 8 d. 10
7. Melwin availed a loan from the bank that gave him an option to pay
₱ 20,000.00 monthly for 2 years. The first payment is due after 4 months. If
the interest rate is 10% converted monthly, what is the period of deferral?
a. 1 c. 3
b. 2 d. 12
a. 16 c. 27
b. 24 d. none
a. ₱ 422,759.78 c. ₱ 525,215.16
b. ₱ 433,655.13 d. ₱ 625,322.14
10. What is the present value of a deferred annuity of ₱1,500.00 every 3 months for
8 years that is deferred 3 years if money is worth 6% converted or compounded
quarterly?
a. ₱ 15,339.25 c. ₱ 31,699.67
b. ₱ 18,231.34 d. ₱ 43,825.32
18
CO_Q2_General Mathematics SHS
Module 7
11. What type of deferred annuity in which a return is based on the performance
of a portfolio of mutual funds, or sub-accounts, chosen by the annuity owner.
a. ₱ 52,544.17 c. ₱ 68,245.12
b. ₱ 57,922.41 d. ₱ 88,201. 05
14. Meghan purchased a laptop for the online class of her kids through the credit
cooperative for their company. The cooperative provides an option for a
deferred payment. Meghan decided to pay after 4 months of purchase. Her
monthly payment is computed as ₱3,500.00 payable in 12 months. How
much is the cash value of the laptop if the interest rate is 8% convertible
monthly?
a. ₱ 45,360.00 c. ₱ 39,441.14
b. ₱ 42,000.00 d. ₱ 36,225.15
15. Payments of ₱ 7,000.00 every 2 years for 10 years starting at the end of 6
years. What is the period of deferral?
a. 1 c. 3
b. 2 d. 10
19
CO_Q2_General Mathematics SHS
Module 7
Additional Activities
Directions: Write a journal about which is better in terms of buying a large purchase
or property – “saving money on bank or getting a loan”?
Rubrics
Organization of All sentences are very All sentences are Some ideas are Ideas are
Ideas (30) clear, and the ideas clear, and the not clear and disorganized and
are very organized. ideas are inorganized but not clear. (21)
(30) organized. overall, ideas are
(27) acceptable. (24)
20
CO_Q2_General Mathematics SHS
Module 7
Module 7
CO_Q2_General Mathematics SHS
21
What I Know What's More Assessment
1. B Activity 1.1 1. B
2. C 2. A
3. C 1. 24 periods or 24 3 months interval 3. B
4. B 2. 18 periods or 18 2 months interval 4. C
5. C 3. 2 periods or 2 months intervals 5. C
6. D 4. 11periods or 11 5 months intervals 6. A
7. B 7. C
5. 10 periods or 10 half-year intervals
8. B 8. B
9. B 9. A
10. A Activity 1.2 10. C
11. C 1 Php38,633.32 11. B
12. A 2. Php 85, 260.00 12. A
13. C 13. B
14. A 14. C
15. D What I have learned 15. B
A1. Present
2. Periodic payment
3. k+1
4. withdraw
Answer Key
2
References
Chan, Miro, Quiming. General Mathematics. Viba Group Inc. 2016. Pp. 83-86
Dimasuay Lynie, Alcala Jeric, Palacio Jane. Enhanced Teacher’s Manual General
Mathematics for Senior High School. C & E Publishing, Inc. 2016 pp. 101-105
General Mathematics Learner’s Material. First Edition. 2016. pp. 199 - 204
22
CO_Q2_General Mathematics SHS
Module 7
For inquiries or feedback, please write or call:
Republic Act 8293, section 176 states that: No copyright shall subsist in any work of
the Government of the Philippines. However, prior approval of the government agency or office
wherein the work is created shall be necessary for exploitation of such work for profit. Such
agency or office may, among other things, impose as a condition the payment of royalties.
Borrowed materials (i.e., songs, stories, poems, pictures, photos, brand names,
trademarks, etc.) included in this module are owned by their respective copyright holders.
Every effort has been exerted to locate and seek permission to use these materials from their
respective copyright owners. The publisher and authors do not represent nor claim ownership
over them.
This Self-Learning Module (SLM) is prepared so that you, our dear learners,
can continue your studies and learn while at home. Activities, questions, directions,
exercises, and discussions are carefully stated for you to understand each lesson.
Each SLM is composed of different parts. Each part shall guide you step-by-
step as you discover and understand the lesson prepared for you.
In addition to the material in the main text, Notes to the Teacher are also
provided to our facilitators and parents for strategies and reminders on how they can
best help you on your home-based learning.
Please use this module with care. Do not put unnecessary marks on any part
of this SLM. Use a separate sheet of paper in answering the exercises and tests. And
read the instructions carefully before performing each task.
If you have any questions in using this SLM or any difficulty in answering the
tasks in this module, do not hesitate to consult your teacher or facilitator.
Thank you.
Have you ever heard of stocks and bonds? Have you ever experienced to
borrow money from your parent or friend and had to pay it back with interest?
This module was designed and written for learners like you to describe how
stocks and bonds work. This lesson will also prepare you to be financially
independent and succeed in the near future.
What I Know
Choose the letter of the best answer. Write the chosen letter on a separate sheet of
paper.
1. It is the money that is earned in trade or business after paying the costs of
producing and selling goods and services.
a. stock c. bond
b. profit d. investment
3. A person or an entity that gives money or allocates capital with the expectation
of receiving financial returns.
a. entrepreneur c. politician
b. stockbroker d. investor
6. An activity in which money is put at risk for the purpose of making a profit.
a. Invest c. buy
b. sell d. collect
8. What is a bond?
a. a certificate of ownership in a corporation, with the right to a share of
the earnings
b. a payment from an investor to a corporation for the rights to future
profits
c. a group of stocks sold together for a set price
d. a certificate representing a loan from an investor to a corporation or
government entity
11. When people buy stock on a stock market. They are considered as _________.
a. the people selling the stock receives the money.
b. the corporation loses money.
c. the corporation receives the money.
d. the people buying the stock receives the money.
14. If the interest rate on bonds increases, which of the following is the most likely
result?
a. The supply of money decreases.
b. Bond prices increase.
c. The transaction costs associated with holding money increases.
d. People are willing to hold less wealth in the form of money.
Let’s say that it's time to invest your money. So, how exactly are you going to
allocate that money? After all, a well-diversified portfolio strategy is recommended
before you start to buy assets such as stocks and bonds. Indeed, stocks and bonds
are two of the most traded types of assets—each available for sale on several different
platforms or through a variety of markets or brokers. Here, we go over the primary
differences between stocks and bonds.
What’s In
Words to Treasure!
The L _ _ D is my sh _ _ _e r _ , I l _ _ k _othin_.
1 2 3 4 5 6 7 8 9 10
Psalm 23:1
Read carefully the lyrics of the song, you may sing the song in the tune of
“Row, row, row your boat” to emphasize how people can save with stocks and bonds.
Questions to Ponder
1. Based on the given song, can you define stocks? How about bonds?
2. Distinguish the difference between stocks and bonds?
3. Between stocks and bonds, which do you prefer to invest your money? Why?
Stocks and bonds are the heartbeat of the economy. Much of the world's
business activity would be impossible without stocks and bonds. But whether you
trade on the Philippine Stocks Exchange, financial terms can always be confusing.
So, before you invest in a stock or a bond, you need to know - what is the difference?
And which one should you choose?
Stocks and bonds are certificates that are sold to raise money for starting a
new company or for expanding an existing company. They are also called securities,
and people who buy them are called investors.
STOCKS
BONDS
The annual interest paid by the issuer to the lender (bond holder) on the bond
is referred to as the coupon. The coupon rate is the annual payout as percentage
of the bond’s par value. Bonds have two kinds of values. These are par value and
Now I know!
Investors are always told to diversify their portfolios between stocks and
bonds, but what’s the difference between the two types of investments? Here's a look
at the difference between stocks and bonds on the most fundamental level.
Basis for
Stocks Bonds
Comparison
A form of equity instrument or A form of debt instrument or
raising money by allowing raising of money by borrowing
Definition
investors to be part owners of from investors.
the company.
Government Institutions,
Issuers Corporates Financial Institutions,
Companies etc.
Status of Shareholders are the owners of Bondholders are the lenders to
Holders the company. the company.
Profits earned by the company Interest payments are made in
Form of
are paid in the form of the form of Coupon Payments.
Returns
Dividends.
The risk level is high since it The risk level is relatively low
depends upon the performance since bondholders are prioritized
Risk Level
of the issuer, so no guaranteed for repayments.
returns.
Major Risks Market Risk, Business Risk Interest Rate Risk, Inflation Risk
Associated
Shareholders get the right to Bondholders get the preference
Additional
vote. in terms of repayment and on
Benefit
liquidation.
When interest rates fall When market interest rates
Market
significantly, the market stock decrease, the market value of an
Value
value rises. existing bond increases.
Group the following characteristics of stocks and bonds and write on the space
provided.
Stocks Bonds
What I Can Do
Choose the letter of the best answer. Write the chosen letter on a separate sheet of
paper.
1. What is another term for stock?
a. bond c. debt instrument
b. debenture d. equity instrument
2. It is a type of stock for which stockholders get first choice in distributed profits.
a. common stock c. face value stock
b. stock market d. preferred stock
3. Another term for a bond’s face value.
a. par value c. maturity
b. coupon d. final payment
4. A bond that pays all of its interest and principal at the bond’s maturity date.
a. bond fund c. coupon bond
b. par-value fund d. zero-coupon bond
5. Which financial assets carries the most risk?
a. bond c. savings deposits
b. stock d. checking deposits
6. Which is the LEAST risky investment?
a. stocks c. Philippines treasury bonds
b. corporate bond d. mutual funds
7. A person or agent who trades for you and charges a fee or commission for
executing buys and sells of stocks through a stock exchange.
a. stockbroker c. entrepreneur
b. stockholder d. politician
8. What is stock portfolio?
a. The online tool used to track stock prices.
b. A list of all the stocks you own.
c. The document that you receive for purchasing stock.
d. A group of stocks that you can purchase at one time on a stock
exchange.
9. Why do people buy stocks?
a. There is no chance of a loss.
b. They expect to earn a return.
c. The government encourages them to buy stock.
d. They are guaranteed interest payment each year.
10. What is the best explanation of a bond?
a. It is an ownership interest in a company.
b. It is an equity or share in a company.
c. It represents a corporate or government debt obligation.
d. It is a debt instrument.
Additional Activities
Journal Writing
Write a journal on the saying “Do not put all your eggs in one basket” by
relating the lesson on stocks and bonds.
Aunzo, Rodulfo, Flores Maricar, Gagani Ray Ferdinand M, and Quennie Ypanto.
2016. General Mathematics Activity-based, Scaffolding of Student . Quezon
City: C&E Publishing, Inc.
Republic Act 8293, section 176 states that: No copyright shall subsist in any work of
the Government of the Philippines. However, prior approval of the government agency or office
wherein the work is created shall be necessary for exploitation of such work for profit. Such
agency or office may, among other things, impose as a condition the payment of royalties.
Borrowed materials (i.e., songs, stories, poems, pictures, photos, brand names,
trademarks, etc.) included in this module are owned by their respective copyright holders.
Every effort has been exerted to locate and seek permission to use these materials from their
respective copyright owners. The publisher and authors do not represent nor claim ownership
over them.
This Self-Learning Module (SLM) is prepared so that you, our dear learners,
can continue your studies and learn while at home. Activities, questions, directions,
exercises, and discussions are carefully stated for you to understand each lesson.
Each SLM is composed of different parts. Each part shall guide you step-by-
step as you discover and understand the lesson prepared for you.
In addition to the material in the main text, Notes to the Teacher are also
provided to our facilitators and parents for strategies and reminders on how they can
best help you on your home-based learning.
Please use this module with care. Do not put unnecessary marks on any part
of this SLM. Use a separate sheet of paper in answering the exercises and tests. And
read the instructions carefully before performing each task.
If you have any questions in using this SLM or any difficulty in answering the
tasks in this module, do not hesitate to consult your teacher or facilitator.
Thank you.
Have you ever heard stocks and bonds? Have you ever experienced to borrow
money from your parent or friend and had to pay it back with interest?
This module was designed and written for learners like you to describe how
stocks and bonds work. This lesson will also prepare you to be financially
independent and succeed in the near future.
1
CO_Q2_General Mathematics SHS
Module 9
What I Know
Choose the letter of the best answer. Write the chosen letter on a separate sheet of
paper.
1. The interest rate the bond issuer will use in computing the interest payment
which is usually expressed in percent.
a. Coupon rate
b. Dividend
c. Dividend Rate
d. Maturity Date
2. The ratio of the annual dividend per share and the market value per share.
a. Coupon Amount
b. Dividend Rate
c. Market Value
d. Stock yield ratio
3. The periodic interest payment that the bondholder receives during the time
between the purchase date and maturity date.
a. Coupon Amount
b. Coupon Rate
c. Face Value
d. Market Value
2
CO_Q2_General Mathematics SHS
Module 9
6. A certain corporation declared a 3% dividend on a stock with a par value of
₱500.00 Mrs. Lingan owns 200 shares of stocks with a par value of ₱ 500.00
How much is the dividend she received?
a. ₱ 2000.00
b. ₱ 2500.00
c. ₱ 3000.00
d. ₱ 3500.00
10. Determine the amount of the semi-annual coupon for a bond with a face value
of ₱ 300,000.00 that pays 10% payable semi-annual for its coupon.
a. ₱ 12,500.00
b. ₱ 15,000.00
c. ₱ 17,500.00
d. ₱ 20,000.00
3
CO_Q2_General Mathematics SHS
Module 9
11. Find the amount of the semi-annual coupon.
a. ₱ 2500.00
b. ₱ 2750.00
c. ₱ 3000.00
d. ₱ 3250.00
14. A bank declared a dividend of ₱ 27.00 per share for the common stock. If the
common stock closes at ₱ 93.00, how large is the stock yield ratio on this
investment between purchase date and the maturity date?
a. 0.26
b. 0.29
c. 0.32
d. 0.35
15. Determine the amount of semi-annual coupon paid for a 3% bond with a face
value of ₱ 100,000.00 which matures after 8 years. How many coupons are
paid?
a. 10 times
b. 13 times
c. 16 times
d. 19 times
4
CO_Q2_General Mathematics SHS
Module 9
Lesson
Different Markets for Stocks
1 and Bonds
Many of us deal with stocks and bonds (or want to!) but have no idea what are
their worth. Maybe you want to try investing. You may want a better understanding
of your investments. Or, if you work for a big corporation, your employer may sell
shares, and you need to determine whether it’s worth the price. Either way, it is good
to know the difference between stocks and bonds and have a basic understanding of
how they are valued.
What’s In
Good day learners. Before we start our new learning experience today, let us have
an activity. There are 10 words from the puzzle hidden vertically, horizontally and
diagonally. Write the words below using the clue then give a meaningful definition
for each word.
A T O W G L V O T O L E I M E Q
I F I S S U E R X G I H K A U D
D F A E S T B D B W I O G R A O
I G I S O U O R K R E A H K I N
S M C T A Z N C A S C J R E C I
C V L O I H F I K D A U P T X R
O I H C M L K M I B P N Q V E M
U E Q K S M B V L R R Y E A U L
N H K E A W I F J F L O U L L D
T S E O A D O S V Z O T K U A O
Y C H Y E P R I I W P O C E V A
O B C N I K D C B O S I H O R R
Q A D U R D E O B O N D A M A A
E C O U P O N R A T E U E J P N
U Z J A O G W T A X I V F O L E
5
CO_Q2_General Mathematics SHS
Module 9
1. S = ______________________________________________________.
2. B = ______________________________________________________.
3. C = ______________________________________________________.
4. M = ______________________________________________________.
5. P = ______________________________________________________.
6. I = ______________________________________________________.
7. C = ______________________________________________________.
8. S = ______________________________________________________.
9. D = ______________________________________________________.
10. D = ______________________________________________________.
From the previous activity, these terms have something to do with the new
lesson. These will help you understand the different markets for stocks and bonds
and it will be easier for you to use and apply these terms on the computations
regarding our next topic.
6
CO_Q2_General Mathematics SHS
Module 9
What’s New
This is an activity that will test your decision prowess. Given 2 scenarios
below, answer questions below.
Scenario 1.
Your grandparents gave you ₱ 175,000.00 on your 16th birthday. You were instructed
to invest the money so that the earnings can be used to pay for your tuition fee in
college. Having heard about the risks and rewards of the stock market from your
parents, you become interested in buying stocks in a particular company. Below are
the options given to you by your parents:
Option1: Company ABC’s selling stock is ₱ 1,500.00 per share that will have
a dividend of ₱ 200.00 per year. The stock can be sold after two years
at ₱ 2,000.00 and the market requires a rate of return of 15%.
Option2: Company XYZ’s selling stock is ₱ 1,000.00 per share that will have
a dividend of ₱ 180.00 per year. The stock can be sold after two years
at ₱ 2,000.00 and the market requires a rate of return of 7%.
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
Scenario 2.
Suppose that you withdraw ₱ 1,500 from your savings account. Over the
weekend, several people want to borrow money from you. Read the stories and decide
to whom you will lend your money.
Story1. Your younger sister is having a garage sale. She needs cash to make
change for the day. She will sell you a bond for ₱ 1,000.00. You will
keep the bond for a week, and she promised to pay you back.
Story2. Your older brother has a small business idea but doesn’t have any
money. He wants to borrow your ₱ 1,500.00 and promised to pay you
back ₱ 1,800.00 in four weeks.
Story3. Your best friend at school, whom you know very-well, wants to borrow
your ₱ 1,500.00 to buy cupcakes. She plans to sell at a higher price
and promised to pay you back ₱ 1,700.00 in two weeks.
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
7
CO_Q2_General Mathematics SHS
Module 9
What is It
Before we proceed to our next activity, let us recall some different terms about stocks.
Stock Yield Ratio – ratio of the annual dividend per share and the
market value per share. Also called current stock yield.
Par Value – the per share amount as stated on the company certificate.
Unlike market value, it is determined by the company and remains stable
over time.
Stock valuation is considered to have high value if the stockholder gets higher
dividend at present and in the future, otherwise the stock is considered to have a low
value. The computation of the stock value is necessary in order to know if the stock
market value is cheap or expensive at a given time.
Example 1:
8
CO_Q2_General Mathematics SHS
Module 9
Solution:
Total Dividend
Dividend per share =
Total Shares
30,000,000
=
700,000
= 42. 86
Example 2:
Example 3:
Corporation A, with a current market value of ₱ 52.00, give a dividend of ₱ 8.00 per
share of its common stock. Corporation B, with a current market value of ₱ 95.00,
give a dividend of ₱ 12.00 per share. Use the stock yield ratio to measure how much
dividends shareholders are getting in relation to the amount invested.
Solution.
Given: Corporation A:
Dividend per share = ₱ 8
Market Value = ₱ 52
Find: Stock yield ratio
9
CO_Q2_General Mathematics SHS
Module 9
dividend per share
Stock yield ratio =
market value
𝟖𝟖
=
𝟓𝟓𝟓𝟓
= 0.1538 = 15.38%
Given: Corporation B
Dividend per share = ₱ 12.00
Market Value = ₱ 95.00
Find: Stock yield ratio
= 0.1263 = 12.63%
Corporation A has a higher stock-yield-ratio than Corporation B. thus, each
peso will earn you more if you invest in corporation A than in corporation B. If all
other things are equal, then it is wiser to invest in Corporation A.
As example 3 shows, the stock yield ratio can be used to compare two or more
investments.
Definition of Terms in Relation to bonds.
Term 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 the
time of purchased to maturity date.
Fair Price of a Bond – present value of all cash inflows to the bondholder.
10
CO_Q2_General Mathematics SHS
Module 9
Example 4: Determine the amount of the semi-annual coupon for a bond with a
face value of ₱300,000.00 that pays 10% payable semi-annual for its coupon.
Solution:
1
Semi-Annually Coupon Amount: 30,000 � � = 15,000
2
Note: The coupon rate is used only for computing the coupon amount,
usually paid semi-annually. It is not the rate at which money grows. Instead
current market conditions are reflected by the market rate, and it will be
used to compute the present value of future payments.
Example 5:
Find the value of a ₱ 20,000.00 bond with interest of 14% compounded semi-
annually which is redeemable at 108% in 5 years that yields the purchaser 6%
converted semi-annually.
Solution:
Finding the purchase price of the bond requires us to determine first the
coupon payment and the redemption value of the bond. Using the information given
in the problem, substitute the values to the respective formulas. Thus, we have
t = term = 5 years
11
CO_Q2_General Mathematics SHS
Module 9
𝑟𝑟𝑦𝑦 = yield rate = 0.06
0.14
b = periodic bond rate = = 0.07
2
0.06
i = periodic rate = = 0.03
2
Purchase Price:
−n 1 − (1 + i ) − n
p = Rv (1 + i ) + c p
i
1 − (1 + 0.03) −10
p = (21,600)(1 + 0.03) −10 + 1,400 = ₱ 28,014.71
0.03
12
CO_Q2_General Mathematics SHS
Module 9
What’s More
Activity 1.1. Complete the table below by supplying the correct dividend, shares
and dividend per share.
Dividend per
Dividend Shares
share
1 ₱ 10,000.00 750
2 1,000 ₱ 15.25
3 ₱ 2,000,000.00 ₱ 200.00
Activity 1.2. Complete the table below by supplying the correct dividend, shares
and dividend per share.
Dividend
Par Value Shares Dividend
Percentage
1 5% ₱ 700.00 200
2 ₱ 500.00 50 ₱12,000.00
3 3% 100 ₱ 3000.00
4 7.5% ₱ 350.00 ₱ 5000.00
2. ABC Corporation gives ₱ 38.00 dividend per share for its common stock. The
market value of stock is ₱ 10800. Determine the stock yield ratio.
3. A bank declares a dividend of ₱27.00 per share for the common stock. If the
common stock closes at ₱ 93.00, how large is the stock yield ratio on this
investment?
4. Find the amount of the semi-annual coupon for a ₱ 200,000.00 bond which pays
5% convertible semi-annually coupons.
5. Determine the amount of semi-annual coupon paid for a 3% bond with a face
value of ₱ 100,000.00 which matures after 8 years. How many coupons are paid?
13
CO_Q2_General Mathematics SHS
Module 9
What I Have Learned
9. Corporation Gen. Math, with a current market value of ₱ 95.00, give a dividend of
₱ 15.00 per share of its common stock. The stock yield ratio is _______________.
10. The amount of the semi-annual coupon for a bond with a face value of ₱
100,000 .00 that pays 15% payable semi-annual for its coupon is
________________
14
CO_Q2_General Mathematics SHS
Module 9
Reflection. Going back to our first problem, it is time to review our answers. You
can now decide correctly after this learning experiences.
Scenario 1.
Your grandparents gave you ₱ 175,000.00 on your 16th birthday. You were
instructed to invest the money so that the earnings can be used to pay for your
tuition fee in college. Having heard about the risks and rewards of the stock
market from your parents, you become interested in buying stocks in a
particular company. Below are the options given to you by your parents:
Option1: Company ABC’s selling stock is ₱ 1,500.00 per share that will have a
dividend of ₱ 200.00 per year. The stock can be sold after two years at ₱2,000.00
and the market requires a rate of return of 15%.
Option2: Company XYZ’s selling stock is ₱ 1,000.00 per share that will have a
dividend of ₱ 180.00 per year. The stock can be sold after two years at ₱2,000.00
and the market requires a rate of return of 7%.
Scenario 2.
Suppose that you withdraw ₱ 1,500.00 from your savings account. Over the
weekend, several people want to borrow money from you. Read the stories and
decide to whom you will lend your money.
Story1. Your younger sister is having a garage sale. She needs cash to make
change for the day. She will sell you a bond for ₱ 1,000.00 You will keep the
bond for a week, and she promised to pay you back.
Story2. Your older brother has a small business idea but doesn’t have any
money. He wants to borrow your ₱ 1,500.00 and promised to pay you back ₱
1,800.00 in four weeks.
Story3. Your best friend at school, whom you know very-well, wants to borrow
your ₱ 1,500.00 to buy cupcakes. She plans to sell at a higher price and
promised to pay you back ₱1,700.00 in two weeks.
15
CO_Q2_General Mathematics SHS
Module 9
What I Can Do
Description 5 4 3 2 1
All graphics
All graphics are related All Graphics
are related to to the topic graphics do not Graphics do
the topic and and most of are related relate to not relate to
make it it are easier to the the topic. the topic.
easier to to topic. One or Several
Graphics
understand. understand. Some two borrowed
Relevance
All borrowed All borrowed borrowed graphics do
graphics borrowed graphics graphics not have a
have a graphics have a have a source
source have a source source citation.
citation. source citation. citation.
citation.
The poster
The poster
The poster is is
The poster The is
exceptionally acceptably
is attractive poster is distractingly
attractive in attractive
in terms of attractive messy or
Attractiveness terms of in terms of
design, though it very poorly
design, design,
layout, and may be a designed. It
layout, and layout,
neatness. bit messy. is not
neatness. and
attractive.
neatness.
16
CO_Q2_General Mathematics SHS
Module 9
Assessment
Choose the letter of the best answer. Write the chosen letter on a separate sheet of
paper.
1. The periodic interest payment that the bondholder receives during the time
between purchase date and maturity date.
a. Coupon Amount
b. Coupon Rate
c. Face Value
d. Market Value
5. It is the interest rate the bond issuer will use in computing the interest
payment, usually expressed in percent.
a. Coupon Date
b. Dividend
c. Dividend Rate
d. Maturity Date
6. It is the ratio of the annual dividend per share and the market value per share.
a. Coupon Amount
b. Dividend Rate
c. Market Value
d. Stock yield ratio
17
CO_Q2_General Mathematics SHS
Module 9
7. A bank declared a dividend of ₱ 35.00 per share for the common stock. If the
common stock closes at ₱ 98.00, how large is the stock yield ratio on this
investment?
a. 0.36
b. 0.39
c. 0.63
d. 0.66
8. Determine the amount of semi-annual coupon paid for a 3% bond with a face
value of ₱ 100,000.00 which matures after 8 years. How many coupons are
paid?
a. 10 times
b. 13 times
c. 16 times
d. 19 times
12. Determine the amount of the semi-annual coupon for a bond with a face value
of ₱ 450,000.00 that pays 12% payable semi-annual for its coupon.
a. ₱ 27,000.00
b. ₱ 24,000.00
c. ₱ 21,000.00
d. ₱ 18,000.00
18
CO_Q2_General Mathematics SHS
Module 9
For numbers 13, 14 and 15.
Find the value of a ₱ 50,000.00 bond with interest of 12% compounded semi-
annually which is redeemable at 105% in 3 years that yields the purchaser 8%
converted semi-annually.
19
CO_Q2_General Mathematics SHS
Module 9
Additional Activities
1. What will you pay today for a stock that is expected to make a ₱ 45.00 dividend
in one year if the expected dividend rate is 5% and you require a 12% return
on your investment?
2. XYZ Company’s preferred stock is selling for ₱ 60.00 a share. If the required
return is 8%, what will the dividend be two years from now?
3. Your broker is trying to sell you a stock with a current market price of
₱ 2,160.00 The stock’s last dividend was ₱ 53.25, and earnings and dividends
are expected to increase at a constant growth rate of 10%. Is the stock fairly
valued if the return is 13%? Explain why or why not.
20
CO_Q2_General Mathematics SHS
Module 9
Module 9
CO_Q2_General Mathematics SHS
21
Assessment What’s More What I Know
1. A 1. C
2. D Activity 1.1 2. D
3. C 1. ₱13.33 3. A
4. B 4. B
2. ₱15,250.00
5. C 5. A
6. D 3. 10,000 6. C
7. A 7. D
8. C Activity 1.2 8. B
9. C 1. ₱7,000.00 9. A
10. B 10. B
2. 48%
11. C 11. A
12. A 3. ₱1000.00 12. A
13. C 4. ₱190.48 13. D
14. A 5. 14. B
15. B Activity 1.3 15. C
1. ₱83.33
2. 0.35%
3. 0.29
4. ₱5,000.00
5. 16 times
Answer Key
References
Aoanan, Grace O., Plarizan, Ma. Lourdes P., Regidor, Beverly T., Simbulas, Lolly J.
General Mathematics for Senior High School. Quezon City: C&E Publishing,
Inc. 2016.
Buzon, Olivia N., Lapinid, Minie Rose C., Nivera, Gladys C. Geometry: Patterns and
Practicalities. Makati City: Salesiana Books by Don Bosco Press. 2007
Orines, Fernando B., Esparrago, Mirla S., Reyes, Nestor V. Advanced Algebra,
Trigonometry, and Statistics. Second Edition/ Orines, Fernando B. Quezon
City: Pheonix Publishing House. 2008.
22
CO_Q2_General Mathematics SHS
Module 9
For inquiries or feedback, please write or call:
Republic Act 8293, section 176 states that: No copyright shall subsist in any work of
the Government of the Philippines. However, prior approval of the government agency or office
wherein the work is created shall be necessary for exploitation of such work for profit. Such
agency or office may, among other things, impose as a condition the payment of royalties.
Borrowed materials (i.e., songs, stories, poems, pictures, photos, brand names,
trademarks, etc.) included in this module are owned by their respective copyright holders.
Every effort has been exerted to locate and seek permission to use these materials from their
respective copyright owners. The publisher and authors do not represent nor claim ownership
over them.
Each SLM is composed of different parts. Each part shall guide you step-by-
step as you discover and understand the lesson prepared for you.
In addition to the material in the main text, Notes to the Teacher are also
provided to our facilitators and parents for strategies and reminders on how they can
best help you on your home-based learning.
Please use this module with care. Do not put unnecessary marks on any part
of this SLM. Use a separate sheet of paper in answering the exercises and tests. And
read the instructions carefully before performing each task.
If you have any questions in using this SLM or any difficulty in answering the
tasks in this module, do not hesitate to consult your teacher or facilitator.
Thank you.
What I Need to Know
Previously, you learned how to illustrate stocks and bonds and distinguish between
stocks and bonds, and how to solve problems involving stocks and bonds.
What I Know
Let’s find out how far you know about this topic! Please take this challenge! Have
Fun! Choose the letter of the best answer. Write the chosen letter on a separate
sheet of paper.
52- 52-
VOLUME NET
WK- WK- STOCK HIGH LOW DIV CLOSE
(100s) CHG
HIGH LOW
64.30 61.00 ABC 63.00 60.00 .70 3050 64.20 0.20
98.00 82.00 DEF 98.00 80.00 .30 700 98.20 -0.2
88.00 84.50 GHI 87.55 83.50 .50 1000 87.50 0.20
74.00 80.50 JKL 72.55 70.50 .30 900 72.50 0.20
2. What is the lowest price for the past 52 weeks of stock DEF?
a. ₱82
b. ₱84
c. ₱88
d. ₱98
4. What was the closing price the day before the last trading day of stock GHI?
a. ₱87.60
b. ₱87.50
c. ₱87.40
d. ₱87.30
5. During the past 52 weeks, which stocks in the table sold at the lowest price?
a. ABC
b. DEF
c. GHI
d. JKL
7. Which stocks have the lowest shares were traded for the day?
a. ABC
b. DEF
c. GHI
d. JKL
8. What is the net change between the two last trading days of stock JKL?
a. −0.20
b. 0.20
c. 0.30
d. 0.50
9. What is the total number of trader who wishes to buy a total of 365,100
shares at ₱22.60 per share?
a. 120
b. 130
c. 140
d. 150
11. What is the total number of trader who wishes to buy a total of 546,500
shares at ₱22.50 per share?
a. 12
b. 40
c. 150
d. 160
12. How many trader/s is willing to sell his/her 185,600 shares for ₱22.90 per
share?
a. 6
b. 4
c. 2
d. 1
13. What is the total number of trader who wishes to buy a total of 71,600
shares at ₱22.55 per share?
a. 12
b. 40
c. 150
d. 160
14. It refers to the number of individual buy orders and the total number of
shares they wish to buy.
a. ask size
b. bid size
c. ask price
d. bid price
Learning how to invest your money is indispensable for your future. One of the
primary benefits of investing in the stock market is the chance to grow your money.
You have learned from your previous modules on how to find the dividend per share,
determine the stock yield ratio and compare two or more investments. This module
will help you analyze the different market indices for stocks and bonds and interpret
the theory of efficient markets.
What’s In
Let us start your journey by recalling the previous lessons you already learned about
stocks and bonds.
Activity 1
Study the given table and calculate the gain or loss for each item and record your
answer in the fourth column under “Change in Price”. In the fifth column, write
whether the change in price is a gain or loss.
1 ₱1,552.50 ₱1,580.60
2 ₱468.90 ₱449.80
3 ₱345.70 ₱390.90
4 ₱1,298.20 ₱1,250.50
5 ₱456.30 ₱600.00
Multiply the Number of Items by the Price per Item to calculate the Total
Cost of the Items.
Number of
Item Price Per Item Total Cost of the Items
Items
1 600 ₱85.60
2 150 ₱80.50
3 65 ₱325.50
4 450 ₱165.00
5 70 ₱123.00
Activity 3
Read each problem below and answer the questions that follow:
Jhom owns 85 shares of common stock, worth ₱500 per value. If the corporation
1
declares a 6 % dividend, (a) what is the total dividend that Jhom should get?
4
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________
(b) Did Jhom make the right decision to have a share in the stock market? Yes or
No? Explain why.
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________
Now, you already know how to find the dividend per share and determine the stock
yield ratio. Also, you already learned how to compare the two or more investments. I
am confident that you are now ready for the new lesson.
Stock on You!
The table below shows how information about stocks can be presented (values are
hypothetical).
52-
52-WK- VOLUME NET
WK- STOCK HIGH LOW DIV CLOSE
HIGH (100s) CHG
LOW
74.30 68.00 AAA 70.00 69.50 .70 9050 70.25 0.10
115.00 82.00 BBB 113.90 112.30 .30 10700 113.3 -0.20
88.00 84.50 CCC 87.55 83.50 .50 500 87.50 0.20
57.19 35.80 DDD 56.00 54.20 .28 10200 56.20 -0.15
31.60 23.25 EEE 30.00 27.80 1.70 1500 30.00 0.30
1. Give the highest and lowest prices for the past 52 weeks.
2. Give the highest and lowest prices for AAA shares yesterday.
3. What was the dividend per share last year?
4. What was the closing price on the last trading day?
5. What was the closing price the day before the last trading day?
1. During the past 52 weeks, which stocks in the table sold at the highest
price? At the lowest price?
2. How many shares of EEE were traded?
3. Which stocks have the highest and lowest shares were traded for the
day?
In the previous activity, first, you need to analyze the information included in the
stock table. To find the highest price for the past 52 weeks, you need to look under
the heading 52-WK-HIGH. The price is given as 74.30. Thus, the highest selling price
of the stock in the past 52 weeks was ₱74.30.
To find the lowest price for the past 52 weeks, you need to look under the heading
52-WK-LOW. The price is given as 68. Thus, the lowest selling price for a share of
AAA stock for the past 52 weeks was ₱68.00. To find the highest and lowest prices
for the shares yesterday, look under the heading HIGH and LOW we have the
numbers 70 and 69.50 respectively. Thus, the highest and lowest prices for AAA
shares were ₱70. and ₱69.50. Looking at the heading DIV, we have the entry 0.70.
Thus, the dividend per share last year was 0.70.
Going back to the table, to find the closing price in the last trading day look under
the heading CLOSE, the number given is 70.25. Thus, when the stock exchange
closed in the last trading, the price was ₱70.25. The closing price the day before the
last trading day is the difference between CLOSE and NETCHG, thus we have ₱70.25
– ₱0.10 = ₱70.15.
To answer the following questions in letter B you need to compare all the information
or data in the table. During the past 52 weeks, the BBB stock sold at the highest
price ₱115 and EEE stock sold at the lowest price ₱31.60. To find the total shares
were traded of EEE look under the heading VOLUME, referring to sales volume and
the number given was 1500. In this case stock EEE sold 1,500 shares of 100 which
is equal to 150,000 shares. The BBB stock has the highest shares were traded with
10,700 shares of 100 which is equal to 1,070,000 and CCC stock was the lowest
shares were traded with 500 shares of 100 which is equal to 50,000.
For better understanding, study the definition of the related terms involving market
indices for stocks and bonds and analyze the given examples.
The measure of a portion of the stock market is called the stock market index.
The up and down movement in percent change over time can indicate how the index
is performing.
The stock index can be a standard by which investors can compare the performance
of their stocks. A financial institution may want to compare its performance with
those others. This can be done by comparing it with the “financials” index.
Chg – change of the index value from the previous trading day (the difference
between the value today and value yesterday)
It is necessary to know and how to read the data or information in stocks and it
can be presented in the table. (values are hypothetical)
52- 52-
VOL NET
WK- WK- STOCK HIGH LOW DIV CLOSE
(100s) CHG
HIGH LOW
74.30 68.00 AAA 70.00 69.50 .70 9050 70.25 0.10
115.00 82.00 BBB 113.9 112.30 .30 10700 113.30 -0.20
88.00 84.50 CCC 87.55 83.50 .50 500 87.50 0.20
57.19 35.80 DDD 56.00 54.20 .28 10200 56.20 -0.15
31.60 23.25 EEE 30.00 27.80 1.70 1500 30.00 0.30
We will use the headings and the first row of the table to explain each column
and this serves as an example.
STOCK • The heading STOCK is a three-letter symbol the company using for
AAA trading. Example AAA
52- • The heading 52–WK–HIGH is the highest selling price of the stock
WK- in the past 52 weeks. The highest price at which AAA stock traded
HIGH during the past 52 weeks was ₱74.30.
74.3
52-
• The heading 52–WK–LOW is the lowest selling price of the stock in
WK-
the past 52 weeks. The lowest price at which AAA stock traded
LOW
during the past 52 weeks was ₱68
68
HIGH • The heading HIGH is the highest selling price of the stock on the
70 last trading day. The selling price of AAA stock in the last trading
day was ₱70.
LOW • The heading LOW is the lowest selling price of the stock on the last
69.5 trading day. The selling price of AAA stock in the last trading day
was ₱69.50.
DIV • The heading DIV is the dividend per share last year. The dividend
.70 per share last year of AAA stock was 0.70
NET • The heading NETCHG is the net change between the last two trading
CHG days. In the case AA, the net change is 0.10. The closing price the
0.10 day before the last trading day is ₱70.25 – 0.10 = ₱70.15
To sell his stock is another way of a shareholder to earn an income. A broker may be
used to buy or sell stocks. Nowadays, most of the transactions are done by making
a phone call to a registered broker or by logging on to a reputable online platform.
Those with accounts in online trading platforms may often encounter a table such
as the following.
Bid Ask/Offer
Size Price Price Size
122 354,100 21.60 21.80 20,000 1
9 81,700 21.55 21.90 183,500 4
42 456,500 21.50 22.15 5,100 1
2 12,500 21.45 22.25 11,800 4
9 14,200 21.40 22.30 23,400 6
Bid Size – the number of individual buy orders and the total number of shares they
wish to buy.
Bid Price – the price that buyers are willing to pay for the stock
Ask Price - the price that the sellers of the stock are willing to sell the stock
Ask Size – how many individual sell orders have been placed in the online platform
and the total number of shares these sellers wish to sell.
Look at the table above, the first row under Bid means that there are a total of 122
traders who wish to buy a total of 354,100 shares at ₱21.60 per share. On the other
hand, the first row under Ask means that just one trader is willing to sell his/her
20,000 shares at a price of ₱21.80 per share.
The main platform for bonds or fixed-income securities in the Philippines is the
Philippine Dealing and Exchange Corporation (or PDEx). Unlike stock indices that
are associated with virtually every stock market in the world, bond market indices
are far less common. Other than certain regional bond indices that have sub-indices
covering the Philippines, our bond market does not typically compute a bond market
index. Instead, the market rates produced from the bond market are interest rates
that may be used as benchmarks for other financial instruments.
Government bonds are sold out to banks and other brokers and dealers every
Monday by Bureau of Treasury. It depends on their terms (or tenors), these bonds
are also called treasury bills (t – bills), treasury notes (t-notes), or treasury bonds (t-
bonds). On the day right after the auction, the news agencies are normally reported
the resulting coupon rates and the total amount sold for these bonds. Since these
bond transactions involve large amounts, these bonds are usually limited to banks,
insurance firms, and other financial institutions. The banks may then resell these
bonds to their investors.
Although the coupon rate for bonds is fixed, bond prices fluctuate because they are
traded among investors in what is called the secondary market. These prices are
determined by supply and demand, the prevailing interest rates, as well as other
market forces. As the price of the bond may increase or decrease, some investors
may choose to sell back to banks the bonds they acquired before their maturity to
cash in their gains even before maturity.
Despite the fact that bond investing is considered safer than stock investing, there
is still some risk involved. The most extreme scenario is a default by the issuer. In
this case, the investor can lose not only the coupons but even the money invested in
Example 1
Consider the stock for FFF and GGG to answer the questions that follow.
52- 52-
YLD VOL NET
WK- WK- STOCK HIGH LOW DIV CLOSE
% (100s) CHG
HIGH LOW
75 69 FFF 71.00 67.90 3.50 2.5 190 72.30 0.30
118 100 GGG 115.20 114.30 1.40 3.1 10500 115.00 -0.10
1. Give the highest and lowest prices for the past 52 weeks.
2. Give the highest and lowest prices shares yesterday.
3. What was the dividend per share last year?
4. What was the annual percentage yield last year?
5. What was the closing price in the last trading day?
6. What was the closing price the day before the last trading day?
7. During the past 52 weeks, which stocks in the table sold at the highest
price? At the lowest price?
8. How many shares of GGG were traded?
9. Which stocks have the lowest shares were traded for the day?
Answers:
For Stock FFF:
1. 52-WK-HIGH = ₱75
52-WK-HIGH = ₱69
2. Highest Price = ₱71
Lowest Price = ₱67.90
3. Dividend per share = ₱3.50
4. YLD% = 2.5%
5. Closing Price = ₱72.30
6. Closing Price (the day before the last trading day) = ₱72.30 - ₱0.30 = ₱72
1. 52-WK-HIGH = ₱118
52-WK-HIGH = ₱100
2. Highest Price = ₱115.20
Lowest Price = ₱114.30
3. Dividend per share = ₱1.40
4. YLD% = 3.1%
5. Closing Price = ₱115.00
6. Closing Price (the day before the last trading day) = ₱115.00 + ₱0.10 =
₱115.10
7. During the past 52 weeks, the GGG stock sold at the highest price ₱118 and
FFF stock sold at the lowest price ₱75.
8. The total shares were traded of look under the heading volume, referring to
sales volume and the number given was 10,500. In this case stock GGG sold
10,500 shares of 100 which is equal to 1,050,000 shares.
9. The FFF stock has the lowest shares were traded with 190 shares of 100 which
is equal to 19,000 shares.
Example 2
Rachel owns 2,000 shares of a company A at ₱980 per share. She also owns
15 000 shares for company B at ₱250 per share. In which company is the total value
of her share greater? Explain how you know which is greater.
Company A
No. of shares x Selling Price = Total Price
2,000 x ₱980 = ₱1,960,000
Company B
Therefore, the greater value of her share is in company B with 15,000 at ₱250
per share, its total value is ₱3,750,000. To find which company will give a greater
value of share multiply the number of shares to its selling price then compare the
final answer.
Activity 1.1
A. Consider the stock for the first company to answer the questions that follow.
52-
52-WK- STOC VOL YLD NET
WK- HIGH LOW DIV CLOSE
HIGH K (100s) % CHG
LOW
74.30 68.00 HHH 70.00 69.50 .70 9050 2.6 70.25 0.10
115.00 82.00 III 113.90 112.30 .30 10700 2.5 113.30 -0.20
88.00 84.50 JJJ 87.55 83.50 .50 500 3.1 87.50 0.20
57.19 35.80 KKK 56.00 54.20 .28 10200 4.2 56.20 -0.15
31.60 23.25 LLL 30.00 27.80 1.70 1500 2.0 30.00 0.30
1. Give the highest and lowest prices for the past 52 weeks.
6. What was the closing price the day before the last trading day?
7. During the past 52 weeks, which stocks in the table sold at the highest
9. Which stocks have the lowest shares were traded for the day?
10. Which stocks have the highest shares were traded for the day?
True or False: Read each statement below carefully. Place a T on the line if you
think a statement is TRUE. Place an F on the line if you think the statement is
FALSE.
_________3. The up and down movement in percent change over time can
_________4. Bid Size is the price that buyers are not willing to pay for the stock.
_________5. Bid size is the number of individuals who buy orders and the total
_________6. Buying and selling stocks can be done by making phone calls to a
registered broker or by logging on to a reputable online trading
platform.
_________8. Stock indices are far less common than bond market indices.
Activity 1.3
Solve the following problems.
1. Nicco owns 5,000 shares of a company at ₱780 per share. He also owns
25,000 shares for another company at ₱260 per share. In which company is
the total value of her share greater? Explain how you know which is greater.
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
2. On July 1, 2019, Aldrin bought 400 shares of ABC stocks at ₱450 per share.
He sold half of his shares on August 3, 2019, for ₱470. How much money did
he gain or lose on the investment?
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
A. Please read the sentences carefully and fill in the missing word/s by writing your
answer on the space provided for.
3. The highest selling price of the stock in the past 52 weeks is represented as
4. The highest selling price of the stock in the last trading day weeks is
6. _________________ is the price that the buyers are willing to pay for the stock.
7. _________________ is the price that the sellers of the stock are willing to sell the
stocks.
8. __________________ tells how many individual sell orders have been placed in
the online platform and the total number of shares these sellers wish to sell.
B. If you know the number of shares you bought and the price per share, how can
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
Score Criteria
Highly The output demonstrates a complete understanding of interpreting
Proficient a stock table. The data in each column on the table was discussed
(90-100%) with complete, accurate, and clear explanations. It is also error-
free, without ambiguity, and grammatically correct.
Proficient The output demonstrates a considerable understanding of
(80-89%) interpreting a stock table. The data in each column on the table
was discussed with complete explanations. There are 1 to 2
grammatical errors.
Developing The output demonstrates some understanding of interpreting a
(70-79%) stock table. The data in each column on the table was discussed
with minimal explanations. There are more than 2 to 5
grammatical errors.
Beginning The output demonstrates a limited understanding of interpreting a
(60-69%) stock table. The data in each column on the table was not
discussed clearly. There are more than 5 grammatical errors.
Assessment
Choose the letter of the best answer. Write the chosen letter on a separate sheet of
paper.
2. What is the lowest price for the past 52 weeks of stock RST?
a. ₱62.50
b. ₱70.50
c. ₱85
d. ₱92.50
3. During the past 52 weeks, which stocks in the table sold at the highest
price?
a. RST
b. XYZ
c. OPQ
d. LMN
4. What was the closing price the day before the last trading day of stock XYZ?
a. ₱87.60
b. ₱87
c. ₱78.10
d. ₱78.50
5. During the past 52 weeks, which stocks in the table sold at the lowest price?
a. LMN
b. OPQ
c. RST
d. XYZ
7. Which stock has the lowest shares were traded for the day?
a. XYZ
b. LMN
c. OPQ
d. RST
8. What is the net change between the two last trading days of stock XYZ?
a. −0.20
b. 0.10
c. 0.30
d. 0.40
Bid Ask/Offer
Size Price Price Size
360 364,200 23.6000 23.8000 22,000 2
11 61,600 23.5500 23.9000 188,600 5
56 537,500 23.5000 23.1500 4,100 1
9. What is the total number of trader who wishes to buy a total of 537,500
shares at ₱23.50 per share?
a. 11
b. 56
c. 140
d. 350
10. How many trader/s is willing to sell his/her 22,000 shares for ₱23.80 per
share?
a. 6
b. 5
c. 4
d. 2
11. What is the total number of trader who wishes to buy a total of 61,600
shares at ₱23.55 per share?
a. 11
b. 14
c. 56
d. 360
12. How many trader/s is willing to sell his/her 188,600 shares for ₱23.90 per
share?
a. 1
b. 2
c. 5
d. 11
13. What is the total number of trader who wishes to buy a total of 364,200
shares at ₱23.600 per share?
a. 11
b. 56
c. 140
d. 360
14. It refers to how many individual sell orders have been placed in the online
platform and the total number of shares these sellers wish to sell.
a. ask size
b. bid size
c. ask price
d. bid price
15. It refers to the price that the sellers of the stock are willing to sell the stock.
a. ask size
b. bid size
c. bid price
d. ask price
A. Use the Stocks for the first company to answer the following questions:
1. Give the highest and lowest prices for the past 52 weeks.
5. What was the closing price the day before the last trading day?
6. During the past 52 weeks, which stocks in the table sold at the highest
8. Which stocks have the highest and lowest shares were traded for the
day?
General Mathematics Learner’s Material. First Edition. 2016. pp. 217 - 224
http://www.pse.com.ph/stockMarket/home.html
Republic Act 8293, section 176 states that: No copyright shall subsist in any work of
the Government of the Philippines. However, prior approval of the government agency or office
wherein the work is created shall be necessary for exploitation of such work for profit. Such
agency or office may, among other things, impose as a condition the payment of royalties.
Borrowed materials (i.e., songs, stories, poems, pictures, photos, brand names,
trademarks, etc.) included in this module are owned by their respective copyright holders.
Every effort has been exerted to locate and seek permission to use these materials from their
respective copyright owners. The publisher and authors do not represent nor claim ownership
over them.
Each SLM is composed of different parts. Each part shall guide you step-by-
step as you discover and understand the lesson prepared for you.
In addition to the material in the main text, Notes to the Teacher are also
provided to our facilitators and parents for strategies and reminders on how they can
best help you on your home-based learning.
Please use this module with care. Do not put unnecessary marks on any part
of this SLM. Use a separate sheet of paper in answering the exercises and tests. And
read the instructions carefully before performing each task.
If you have any questions in using this SLM or any difficulty in answering the
tasks in this module, do not hesitate to consult your teacher or facilitator.
Thank you.
What I Need to
Previously, you have learned about the difference between stocks and bonds.
We said that stocks are the ownership shares you buy from a company while
bonds are a form of long-term investment issued by a corporation or
government where the purchaser becomes a creditor of the company. You now
also have the background on how to describe different markets for stocks and
bonds as well as the skills in analyzing different market indices for stocks and
bonds.
Now, you are about to begin another module in General Mathematics. This
module was designed and was written with you in mind. It is here to help you
learn the concepts of business loans and consumer loans. The scope of this
module permits it to be used in many different learning situations. The
language used recognizes the diverse vocabulary level of students. The lessons
are arranged to follow the standard sequence of the course. But the order in
which you read them can be changed to correspond with the textbook you are
now using.
Are you ready for the new lesson? Fasten your seatbelt and focus on the
world business and consumer loans.
1
CO_Q2_General Mathematics SHS
Module 11
What I Know
Let’s find out how far you might already know about this topic! Please take
this challenge! Have Fun!
Directions. Choose the letter of the best answer. Write the chosen letter on a
1. What do you call the money borrowed that may be used for a business
purpose?
a. business loan
b. collateral
c. consumer loan
d. mortgage
2. What do you call an asset used to secure the loan that may be real estate
or other investments?
a. business loan
b. collateral
c. consumer loan
d. mortgage
3. What is the term coined as the time it takes to pay the entire loan?
a. collateral
b. credit report
c. due date
2
CO_Q2_General Mathematics SHS
Module 11
4. Which of the following is money lent to an individual for personal or family
purposes?
a. business loan
b. collateral
c. consumer loan
d. mortgage
5. What do you call a person who guarantees to pay for someone else’s
a. amortization
b. collateral
c. guarantor
d. mortgage
b. credit cards
c. invoice financing
d. micro loans
a. asset-based financing
b. car loans
c. mortgages
d. student loans
8. Which of the following statements about the interest rate of consumer and
c. Consumer loan and business loan are always equal in interest rates.
3
CO_Q2_General Mathematics SHS
Module 11
9. Which of the following statements about terms of payment for consumer
loan.
loan.
10. Which of the following is not a required document if you are applying for
a business loan.
a. certificate of employment
c. credit report
For 11-15. Identify the following situations and write a if it is a business loan,
b if the situation is a consumer loan, c if the situation is both a business loan
and a consumer loan, or d if the situation is neither a business loan nor a
consumer loan.
______11. Mr. Tuazon wants to have another branch of his car repair shop.
He decided to apply for a loan that he can use to pay for the
rentals of the new branch.
______12. Mrs. Morales runs a trucking business. She wants to buy four
more trucks for the expansion of her business. She applied for a
loan in a bank worth ₱5,000,000.00
______13. Margarita decided to take her family for a vacation. To cover the
expenses, she decided to apply for a loan.
______14. John Rey decided to purchase a condominium unit near his
workplace. He got a loan worth ₱3,000,000.00
______15. Mr. Malonzo renovated his house for ₱100,000.00 This was made
possible because of an approved loan worth ₱85,000.00
4
CO_Q2_General Mathematics SHS
Module 11
Lesson Illustrating and
1 Distinguishing Business
and Consumer Loans
According to Max of the movie The Adventures of Sharkboy and
Lavagirl, “Dream a better dream, then work to make it real”. If you have a big
dream, you should have an extra bigger persistence to achieve that dream. If
you want to buy something big and expensive, you have to save for it. If you
want a car, a house, or if you want to start your own business, you have to
deal with it diligently. Right?
But in this world of modern business, you have the option to achieve
these dreams or buy what you want instantly. By just paying a certain amount
at a certain period and interest, you can have the money. Yes, you are right,
we can apply for loans.
And to know more about loans, welcome to this module. This lesson
will give you insights on the basic concepts of loans specifically on business
and consumer loans. At the end of this module, you should be able to decide
wisely on the appropriateness of business and consumer loans and its proper
utilization. Are you all ready?
What’s In
Before we dig into the main topic of this module - the business and
consumer loans, let us have first the background on the concepts of LOANS.
The basic concepts of loans are very familiar to all of us. Through loans,
any individual can receive assistance in addressing financial needs from
different lending corporations. Loans are not just limited to borrowing money
in a bank to finance business expansion, but also covers the use of credit
card, amortizing appliances and many more.
5
CO_Q2_General Mathematics SHS
Module 11
Activity:
Directions. The following statements describe the basic terms related to the
topic of this module that you are most likely familiar with. Rearrange the
jumbled letters to reveal the answer. Write your answer in the given space.
borrow. (ALPNIRICP)
_________5. It is the maturity or length of time over which a loan extends, for
6
CO_Q2_General Mathematics SHS
Module 11
What’s New
Read the story of two best friends, analyze their situation, and try to
answer the questions below.
7
CO_Q2_General Mathematics SHS
Module 11
The next morning, Bessy and Conny went to the bank to apply for
their loans. After talking to the bank manager, accomplishing all the forms
and submitting all the requirements, their loans were approved.
“How your application sis” Bessy asked.
“It’s okay, they asked me for a collateral and I submitted an income
tax return and a bank statement. Then they give me 10 years as the term
of my loan at 6.5% annual interest” Conny explained.
“Hmm, I see. Well, I was also asked for a collateral so I gave the title
of our house. They also require the owners of our business who happened
to be my parents as guarantors. I was also asked to submit credit report,
income tax returns and our business’ financial statement. They only give
me 5 years to pay my loan at 10% interest rate.” Bessy also explained.
Even though they applied for different loans, good thing that it was
both approved. And the two promised to make the best out of the money
lent to them to start their dreams.
Questions:
1. Who among them applied for a loan easier? Why do you say so?
2. What were the requirements asked for the approval of their loans?
3. In what way do you think Bessy’s loan is different from Conny’s
loan?
4. Do you think applying for a loan is good or bad?
5. If you will apply for a loan, what will be your plan so that you will
never fail in paying it?
8
CO_Q2_General Mathematics SHS
Module 11
What is It
The story of Bessy and Conny aside from it’s a story of best friends, it
is also a story of two different kinds of loans - the business loan and
consumer loan.
A business loan is what Bessy applied for. A business loan is money
lent specifically for a business purpose. It may be used to start a business or
to have a business expansion. The business loan includes microloans, invoice
financing, mezzanine financing, bank loans, asset-based financing, cash flow
loans, as well as business cash advances. On the other hand, Conny applied
for a consumer loan which is money lent to an individual for personal or
family purposes. Consumer loan includes credit cards, mortgages, home
equity lines of credit, refinances, auto loans, student loans, as well as personal
loans.
While reading the story, you also encountered the following terms:
• 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
• Guarantor – a person who guarantees to pay for someone else’s financial
obligation if the borrowers fail to do so.
9
CO_Q2_General Mathematics SHS
Module 11
Examples:
Answer: Andrea needs a business loan since she is planning to use the
Answer: Mr. Zion will apply for a consumer loan since the money that he
10
CO_Q2_General Mathematics SHS
Module 11
EXm
What’s More
Activity 1.1
Directions. Identify whether the following statements are TRUE or FALSE.
Write T if the underlined word/s is/are correct for the statement, otherwise
write the correct word/s to make the statement correct.
Activity 1.2
Directions. Identify whether the following illustrates a business loan or a
consumer loan. Write BL if the situation shows business loan and CL if it
states a consumer loan.
3. Because of his love for our country, Mr. Razo always conduct an
Independence Day presentation to his barangay. However, because of
COVID - 19, he got a problem with his business and need extra money to
finance his advocacy. He realized that he needs to borrow money from the
bank to continue his annual Independence Day activity.
Answer: __________________
11
CO_Q2_General Mathematics SHS
Module 11
5. Mr. Santiago owns the Kakanin food cart business. He wants to put another
food cart on a new mall in Tayabas City. He decided to have a loan
amounting to ₱100,000.00 to establish the new business.
Answer: __________________
6. In preparation for the online learning of her children due to the COVID-19
pandemic, Mrs. Castro decided to buy laptops for them and got an internet
connection. But because of short in budget, she needed to borrow money
amounting to ₱80,000.00 for this school preparation.
Answer: __________________
8. Because Anna believed that Filipinos are truly honest, she decided to put
up an Honesty Bookstore in front of Excellence National High School.
Everyone can get what they need and pay for it without anyone in the
cashier. But before she can own this shop, she borrowed ₱1,000,000.00
from the bank to finance the expenses in putting up this bookstore.
Answer: __________________
10. Xandria really loves her family. They supported her in all her endeavors.
As return of gratitude, she promised them that they will make a tour to
great places in the world. To realize her promise, and to help her finance
their tour, she applied for a personal loan amounting to ₱200,000.00 to
Bank XY.
Answer: __________________
12
CO_Q2_General Mathematics SHS
Module 11
What I Have Learned
3. Collateral is
______________________________________________________________________
_____________________________________________________________________.
13
CO_Q2_General Mathematics SHS
Module 11
What I Can Do
To see whether you imbibe the idea of business loan and consumer
loan, please do any of the following application activities.
A. Comic strip
Make a 4-panel comic strip showing a scenario in a bank where a person
is doing a business loan, while the other one is a consumer loan.
B. Short story
Write a short story of a family who applied for either a business loan or a
consumer loan showing how they struggle but, in the end, become
successful because of the loan they got.
C. Jingle or Rap
Make a short jingle or a rap illustrating and distinguishing business loan
and consumer loan. (You may also submit a video to your teacher if your
facilities allowed.)
Please be guided by these rubrics.
Comics Strip
Category 4 3 2 1
Basic Comic strip Comic strip Comic strip is Comic strip
Elements contains all contains all missing one is missing
(Title, four elements in a elements basic element. two or more
completed creative, basic
panels) organized form. elements.
Content Comic strip Shows the Shows the Just show
clearly shows ideas of ideas of difference
the ideas of business business and between
business and and consumer consumer
consumer loans consumer loans but with and
including all the loans but missing two or business
elements with more elements loans
(documents etc.) missing one (documents without
element etc.) including
(documents the
etc.) elements.
Illustrations Strip contains Strip Strip contains Strip
four completed contains three contains
(colored) four completed two or fewer
drawings in a completed (colored) completed
creative, (colored) drawings. (colored)
organized drawings. drawings.
format.
Grammar There are no There are no There are no There are
more than two more than more than five or more
errors. three errors. four errors. errors.
14
CO_Q2_General Mathematics SHS
Module 11
Short Story
Very Needs
Good Fair
Category Good Improvement
(11–15) (6–10) (1–5)
(16–20)
Jingle/Rap Making
4 3 2 1
Lyrics The lyrics The lyrics are The lyrics are The lyrics
are catchy catchy and somewhat are not
and he/she he/she catchy and catchy and
discusses discusses the he/she lack the
the concepts concepts of discusses discussion
of business business and some the of the
and consumer concepts of concepts of
consumer loans well. business and business
15
CO_Q2_General Mathematics SHS
Module 11
loans well consumer and
and loans. consumer
complete. loans.
Melody Contains 3 Contains 2 Contains 1 Lack of
or more qualities of quality of an qualities of
qualities of an effective effective an effective
an effective jingle/rap: jingle/rap: jingle/rap:
jingle/rap: short, short, short,
short, catchy, catchy, catchy,
catchy, simple or simple or simple or
simple or repetitive. repetitive. repetitive.
repetitive.
Presentation Excellent Some Little Lacks
creativity; creativity; creativity; creativity;
very well most parts few parts not well
through out appeared to appeared to through out
have been be well
well throughout.
throughout.
Assessment
Directions. Choose the letter of the best answer and write it on a separate
sheet of paper.
1. What do you call the loan that intends to spend for personal, family or
household purposes?
a. business loan
b. collateral
c. consumer loan
d. mortgage
16
CO_Q2_General Mathematics SHS
Module 11
2. What do you call the loan that is usually made to fund a company’s
operating expenses and other financial needs?
a. business loan
b. collateral
c. consumer loan
d. mortgage
3. What term is given to a person who guarantees to pay for someone else’s
financial obligation if the borrowers fail to do so?
a. amortization
b. collateral
c. guarantor
d. mortgage
a. auto loans
b. credit cards
c. mezzanine financing
d. mortgages
a. asset-based financing
b. car loans
c. invoice financing
d. micro loans
17
CO_Q2_General Mathematics SHS
Module 11
6. Which of the following statement about the interest rate of consumer and
a. certificate of employment
c. credit report
For 9-15. Identify the following situations and write a if it is a business loan,
b if the situation is a consumer loan, c if the situation is both a business loan
and a consumer loan, or d if the situation is neither a business loan nor a
consumer loan.
18
CO_Q2_General Mathematics SHS
Module 11
____9. Mr. Enriquez owns a lemon juice cart business. He wants to put
another juice cart on a new mall in the other city. He decided to have
a loan to establish a new business.
____12. Ann decided to take her family for a vacation in Palawan, Cebu and
amounting to ₱100,000.00
____13. Mrs. Amor runs a recruitment agency. She wants to put up another
office tin the province. She applied for a loan in a bank worth
₱2,000,000.00
____14. Mr. Agoncillo renovated his house for Php 90,000. This was made
possible because of an approved loan worth ₱85,000.00
____15. Mark decided to apply for a car loan since his work is very far from
his residence. He got a car loan worth ₱1,500,000.00
19
CO_Q2_General Mathematics SHS
Module 11
Additional Activities
If ever you come across in either business or consumer loans, give your
thoughts on the following statements showing how to manage loans effectively
(Security Bank Team).
20
CO_Q2_General Mathematics SHS
Module 11
Module 11
CO_Q2_General Mathematics SHS
21
What is in
1. LOAN 2. INTEREST 3. PRINCIPAL 4. RATE 5. TERM
What's More What I Know Assessment
1. a 1. c
Independent Practice 2. b 2. a
3. d 3. c
1. T 4. c
4. c
2. Consumer Loan 5. c 5. b
3. Collateral 6. b 6. a
4. Lower 7. b
7. a
5. T 8. b
8. a
9. b 9. a
Independent Assessment 10. a 10. a
1. a 11. a
11. a
2. b 12. b
12. a
3. b 13. b 13. a
4. b 14. b 14. b
5. a 15. b
15. b
6. b
7. a
8. a
9. a
10. b
Answer Key
References
Books:
General Mathematics Learner's Material. Pasig City, Philippines: Department of Education -
Bureau of Learning Resources, 2016.
Oronce, Orlando, A. General Mathematics, 1st Edition. Sampaloc, Manila: Rex Book Store,
2016.
Online Sources:
https://www.slideshare.net/reycastro1/basic-concept-of-business-and-
consumer-loans?from_action=save
http://www.dscoopemea.org/consumer-loan-and-business-loan-how-are-
they-different
https://www.securitybank.com/blog/how-to-manage-debts-loans/
https://www.edb.gov.hk/attachment/en/curriculum-
development/resource-support/net/assessment
https://www.scribd.com/doc/252358606/Writing-a-Jingle-Rubric-2
22
CO_Q2_General Mathematics SHS
Module 11
For inquiries or feedback, please write or call:
Republic Act 8293, section 176 states that: No copyright shall subsist in any work of
the Government of the Philippines. However, prior approval of the government agency or office
wherein the work is created shall be necessary for exploitation of such work for profit. Such
agency or office may, among other things, impose as a condition the payment of royalties.
Borrowed materials (i.e., songs, stories, poems, pictures, photos, brand names,
trademarks, etc.) included in this module are owned by their respective copyright holders.
Every effort has been exerted to locate and seek permission to use these materials from their
respective copyright owners. The publisher and authors do not represent nor claim ownership
over them.
Office Address: Gate 2 Karangalan Village, Brgy. San Isidro, Cainta, Rizal
Telefax: 02-8682-5773/8684-4914/8647-7487
E-mail Address: lrmd.calabarzon@deped.gov.ph
General Mathematics
Quarter 2 – Module 12:
Problems on Business and
Consumer Loans
Introductory Message
This Self-Learning Module (SLM) is prepared so that you, our dear learners,
can continue your studies and learn while at home. Activities, questions, directions,
exercises, and discussions are carefully stated for you to understand each lesson.
Each SLM is composed of different parts. Each part shall guide you step-by-
step as you discover and understand the lesson prepared for you.
In addition to the material in the main text, Notes to the Teacher are also
provided to our facilitators and parents for strategies and reminders on how they can
best help you on your home-based learning.
Please use this module with care. Do not put unnecessary marks on any part
of this SLM. Use a separate sheet of paper in answering the exercises and tests. And
read the instructions carefully before performing each task.
If you have any questions in using this SLM or any difficulty in answering the
tasks in this module, do not hesitate to consult your teacher or facilitator.
Thank you.
What I Need to Know
In previous lessons, you learned how to solve simple and compound interests. In the
most recent lesson, you studied the basic concepts of business and consumer loans.
You understand definitions such as annuities, interests, loans and collaterals. In
this lesson, you will study the application of business and consumer loans in real-
life situations. To better appreciate this module let us first consider the following
situations:
(a) Mario came from a poor family. His parents have no stable jobs. But due to
Mario’s determination, he excelled and was able to graduate college. After
being permanent for 2 years in his work, Mario dreamt of providing a simple
and decent shelter for his family. What do you think Mario should do?
(b) Cathy finished Senior High School in her hometown. She took a TVL strand in
dressmaking, However, because of financial problems she was not able to
continue in college. She decided to help her mother in their small business of
dressmaking. Their business increased in production due to her hardwork.
Subsequently, Cathy decided to venture in a larger scale and wished to export
their Filipiniana-style products. But this would need a bigger capital. What do
you think Cathy should do?
(c) During his STEM high school years, Albert was fond of experimenting on RC
motors. In his engineering years in college, he creatively thought of
experimenting about perpetual motion that could provide energy to machines.
However, he was short of finances to start this project which is primarily
Filipino-made. What do you think Albert should do?
Well, you should probably answer all three situations by finding money. Generally,
it is correct. But what are the options to do that? One of the options can be found in
this module. So, study diligently this module because these are all situations in
which you might find yourself in the future. So, by studying this module you may
be given an idea of different decisions you can make to fulfill your dream.
After going through this module, you are expected to solve problems on business and
consumer loans (amortization and mortgage).
Let’s find out how far you might already know about this topic! Please take this
challenge! Have Fun!
Read and analyze each item carefully. Choose the letter that corresponds to your
answer for each statement and write it on a separate answer sheet.
2. It is the process of paying off debt with regular payments made over time.
a. capital b. insurance c. mortgage d. amortization
7. For the purchase of his car worth ₱400,000.00, Nilo requested the buyer Lito to
pay him 30% down payment. How much will Lito pay Nilo for the down
payment?
a. ₱100,000.00 b. ₱280,000.00 c. ₱120,000.00 d. ₱150,000.00
8. A student loan of ₱50,000.00 was applied by Rica to support her final year in
college payable in 60 consecutive months after her graduation. In how many
years will she need to pay fully her student loan?
a. 3 years b. 5 years c. 7 years d. 10 years
11. Anita borrowed ₱500,000.00 from the bank to renovate her house. The
effective rate of interest is 6%. How much is to be paid if the loan is to be paid
in 3 years?
a. ₱595,508.00 b. ₱530,000.00 c. ₱470,000.00 d. ₱561,800.00
12. Belle applied in a financing company for a ₱200,000.00 worth of business loan
to expand her computer business. Suppose she is required by the company to
pay this in 3 years, what is the amount to be paid if the effective rate of interest
is 7%
a. ₱171,735.00 b. ₱228,980.00 c. ₱245,008.60 d. ₱224,720.00
13. Mr. Arevalo borrowed from a bank to purchase a car worth ₱1,200,000.00. If
he has to pay ₱30,000.00 monthly for 5 years, how much will he pay for the
total interest?
a. ₱600,000.00 b. ₱500,000.00 c. ₱400,000.00 d. ₱300,000.00
14. Ms. Binibini obtained a loan of ₱100,000.00 for a 5-year mortgage. How much
will be its total interest if his monthly payment is ₱5,000.00?
a. ₱400,000.00 b. ₱200,000.00 c. ₱500,000.00 d. ₱300,000.00
15. Aling Puring, through VIP Financing Inc, purchased a building for her new
merchandise. It costs ₱2,500,000.00. She paid the financing company
₱500,000.00 as down payment. She plans to pay the remaining balance by
paying monthly for 10 years with an interest rate of 12% monthly. How much
would be her monthly payment?
a. ₱28,000.50 b. ₱50,000.00 c. ₱30,000.00 d. ₱28,694.19
The lesson and activities in this module will explain what you have to know about
real-life situations concerning consumer and business loans.
After going through this module, you are expected to solve problems on business and
consumer loans (amortization and mortgage).
What’s In
In your most recent lesson, you learned the basics of consumer and business loans.
Moreover, in previous lessons, you were taught how to calculate simple and
compound interests as well as annuities. As a review, ready yourself in doing this
first activity.
Activity 1
Based on your knowledge of the previous lessons, try solving the following problems:
1. How much interest is charged when ₱100,000.00 is borrowed for 6 months at
an annual simple interest rate of 12%?
2. Find the maturity value and the compound interest if ₱15,000 is compounded
annually at an interest rate of 3% in 3 years.
3. Rina started to deposit ₱3,000.00 quarterly in a fund that pays 2%
compounded quarterly. How much will be in the fund after 5 years?
What’s New
Most people think about the security and comfort of their families. This security and
comfort include the provision of a house and in case of a far workplace by having a
personal car or motorcycle. However, a large amount of money is needed to buy them
in straight cash. Recently, the government implemented a program called the Balik-
Probinsya, Balik-Pag-asa program that will provide resources for those who will be
coming back to provinces from Manila to start a new life. This may mean having
something to provide for the stability of a family such as a house or maybe a
motorcycle in less amount. A house to provide for the family shelter while a
motorcycle may be necessary as a means of transportation to report to work. But
despite the help the government may provide, this still seems difficult to have if you
have no cash on hand. So, you will resort to what we call a loan. In this module, we
will call it a mortgage.
Questions:
1. What do you understand about the word “loan” or “mortgage”?
___________________________________________________________________________
2. Do you think anyone can file for a loan from a bank or any financial
institution? _______________________________________________________________
3. Enumerate some government institutions or private agencies wherein you can
apply for a mortgage of a house or any vehicle?
___________________________________________________________________________
What is It
You have noticed from the beginning of this module that you were given situations
that have real-life applications. Again, this module is about solving problems
involving consumer and business loans. A loan is something borrowed, especially a
certain amount, that you are obligated to pay fully at a certain period with interest.
So, for instance a bank may lend you a capital of ₱500,000.00 for your intended
business but you must pay it fully at a certain period of time for instance in 3 years
with 12% interest per annum. The following examples will help you with amortization
and mortgage. But before that, let us learn some terms which can guide you as you
study this module:
Amortization is the process of paying off debt with regular payments made over time.
Mortgage is a loan from a bank or other financial institutions that help a borrower
purchase a home or a car.
Mortgagor is the one who borrows a mortgage.
Mortgagee is the one who lends a mortgage.
Collaterals are assets that can secure a loan.
Fixed-rate mortgage is a type of mortgage where interest remains constant.
Obligation is what parties may do under a contract or terms of agreement.
Outstanding balance is any remaining debt at a specified time.
Example 1
Mario came from a poor family. His parents have no stable jobs. But due to Mario’s
determination, he excelled and was able to graduate college. After being permanent
for 2 years in his work, Mario dreamt of providing a simple and decent shelter for his
family. He went to the bank and applied for ₱1,000,000.00 loan. The bank approved
his application with the following terms: 10% down payment, 12% total interest, and
must be paid in full after 5 years.
a. How much is his mortgaged amount?
b. How much should he have paid after 5 years?
Example 2
Cathy finished Senior High School in her hometown. She took a TVL strand in
dressmaking, However, because of financial incapacity, she was not able to continue
in college. She decided to help her mother in their small business of dressmaking.
Their business increased in production due to her hard work. Subsequently, Cathy
decided to venture on a larger scale and wished to export their Filipiniana-style
products. But this would need a bigger capital. So, she decided to go to a financing
institution, Phiram Inc., to borrow ₱500,000.00. If her monthly payment was
₱12,000.00 on a 5-year mortgage, how much was the total amount of interest?
Solution:
Given P = ₱500,000.00, monthly payment = ₱12,000.00
Total Amount = (₱12,000.00) (12 months) (5 years) = ₱720,000.00
Total Amount of Interest = Total Amount – Amount of mortgage
= ₱720,000.00 – ₱500,000.00 = ₱220,000.00
Therefore, the total amount of interest is ₱220,000.00
Example 3
During his STEM high school years, Albert was fond of experimenting on RC motors.
In his engineering years in college, he creatively thought of experimenting about
perpetual motion that could provide energy to machines. However, he was short of
finances to start this project which is primarily Filipino-made. AG Resibo Company
approached Albert, and offered to lend him a capital of ₱2,000,000.00 to be paid in
5 years with 10% monthly interest. Moreover, there is an outright deduction of
100,000 from his applied loan.
(a) How much is his monthly payment?
What’s More
Read each problem carefully and answer each question to solve the problem.
Activity 1.1
1. A business loan of ₱200,000 is to be repaid in full after 2 years. What is the
amount to be paid if the effective rate of interest is 10%? (Hint: F = 𝑃𝑃(1 + 𝑗𝑗)𝑛𝑛 )
2. Johna purchased a condominium worth ₱3,500,000. However, the bank
demands a 10% down payment. How much is the mortgaged amount?
3. A motorcycle seller requires Justo ₱5,000 down payment. How much would
be the mortgaged amount if the motorcycle is sellable at ₱120,000?
Activity 1.2
Solenn decided to venture in an online business and opted to go to a financing
institution to borrow ₱50,000. If her monthly payment is ₱1,500 on a 5-year
mortgage, how much is the total amount of interest?
Activity 1.3
PC Yaw Inc. approached Rudy and offered to lend him a capital for his computer
business amounting to ₱300,000 to be paid in 3 years with 12% monthly interest.
How much would be his monthly payment?
A. Again, this module is about solving problems in consumer and business loans.
A loan is something borrowed, especially a certain amount, that you are
obligated to pay fully at a certain period with interest. Fill each blank with
correct term/s which are related to consumer and business loans.
____________ is the process of paying off debt with regular payments made over
time.
____________ is a loan from a bank or other financial institutions that helps a
borrower purchase a home or a car.
____________ is the one who borrows a mortgage.
____________ is the one who lends a mortgage.
____________ are assets that can secure a loan.
B. Enumerate the different formulas that you should know to solve problems
involving consumer and business loans.
What I Can Do
1. Create your own or similar real-life situation where consumer and business
loans are applied. Conduct a thorough search by looking for any Philippine
bank or institution that offer any loans. Attach the screenshot of your search.
2. In a bond paper, present the problem and write the current interest rate being
charged by your chosen bank or institution. Compute for the following:
(a) Mortgaged Amount (c) Total amount paid
(b) Monthly installment (d) Total amount of interest
Note that your grade will be according to the criteria below: Accuracy of research
data (50%), Accuracy of solution (40%), and Applicability to the current situation
(10%).
Read and analyze each item carefully. Choose the letter that corresponds to your
answer for each statement and write it on a separate answer sheet.
2. It is a type of mortgage where the interest remains constant throughout the term
of the loan.
a. capital c. fixed-rate mortgage
b. insurance d. amortization
4. Ms. Cuyo borrowed a loan of ₱500,000.00 to be repaid in full after 3 years with
an interest rate of 12% per annum. What is its interest rate in decimal form?
a. 5000 c. 0.12%
b. 12% d. 0.12
5. Joey borrowed ₱50,000.00 from a financing institution. His final loan amount is
₱48,000.00 due to the deduction of the down payment. How much is the down
payment?
a. ₱1,000.00 c. ₱48,000.00
b. ₱2,000.00 d. ₱50,000.00
7. For the purchase of her motorcycle worth ₱200,000.00, Mila requested the buyer,
Lita, to pay him 25% down payment. How much will Lita pay Mila for the down
payment?
a. ₱50,000.00 c. ₱150,000.00
b. ₱100,000.00 d. ₱180,000.00
8. A student loan of ₱30,000.00 was applied by Bebot to support her final year in
college payable in 3 consecutive years after her graduation. In how many months
will she need to pay fully her student loan?
a. 12 months c. 36 months
b. 24 months d. 60 months
10. A car dealer offers Ms. Garcia a brand-new car worth ₱420,000.00 with a 15%
down payment. How much would be the mortgaged amount?
a. ₱100,000.00 c. ₱200,000.00
b. ₱125,600.00 d. ₱357,000.00
11. Patty borrowed ₱800,000.00 from the bank to develop her piggery. The effective
rate of interest is 9%. How much is to be paid if the loan is to be paid in 4 years?
a. ₱1,129,265.00 c. ₱1,223,089.00
b. ₱1,170,000.00 d. ₱1,361,800.00
12. A ₱600,000.00 worth of business loan was applied by Basilio from XYZ Bank to
expand his poultry business. Suppose he is required by the company to pay
this in 5 years, what is the amount to be paid if the effective rate of interest is
8%?
a. ₱746,265.00 c. ₱895,008.00
b. ₱881,596.80 d. ₱924,720.00
13. Mr. Alvarez borrowed from a bank to purchase a farm lot worth ₱1,800,000.00.
If he has to pay ₱20,000.00 monthly for 9 years, how much will he pay for the
total interest?
a. ₱320,000.00 c. ₱360,000.00
b. ₱340,000.00 d. ₱380,000.00
15. Mang Akoy, through Alang-Ala Financing Inc. (AFI), purchased a grocery store
for her spouse that costs ₱75,000.00. He paid AFI ₱10,000.00 as down
payment. He plans to pay the remaining balance by paying monthly for 3 years
with an interest rate of 7% monthly. How much would be his monthly payment?
a. ₱3,000.50 c. ₱2,632.33
b. ₱2,807.82 d. ₱2,007.21
2. A newly married couple decided to buy a brand-new car. The net amount of the
loan is ₱800,000.00. They plan to amortize the loan in a monthly installment for 3
years, if money is worth 12% convertible monthly, how much is the monthly
installment?
4. A newly married couple decided to buy a brand-new car. The net amount of the
loan is ₱800,000.00. They plan to amortize the loan un monthly installment for 3
years, if money is worth 12% convertible monthly, how much is the monthly
installment?
Republic Act 8293, section 176 states that: No copyright shall subsist in any work of
the Government of the Philippines. However, prior approval of the government agency or office
wherein the work is created shall be necessary for exploitation of such work for profit. Such
agency or office may, among other things, impose as a condition the payment of royalties.
Borrowed materials (i.e., songs, stories, poems, pictures, photos, brand names,
trademarks, etc.) included in this module are owned by their respective copyright holders.
Every effort has been exerted to locate and seek permission to use these materials from their
respective copyright owners. The publisher and authors do not represent nor claim ownership
over them.
Office Address: Gate 2 Karangalan Village, Brgy. San Isidro, Cainta, Rizal
Telefax: 02-8682-5773/8684-4914/8647-7487
E-mail Address: lrmd.calabarzon@deped.gov.ph
General Mathematics
Quarter 2 – Module 13:
Propositions
Introductory Message
This Self-Learning Module (SLM) is prepared so that you, our dear learners,
can continue your studies and learn while at home. Activities, questions, directions,
exercises, and discussions are carefully stated for you to understand each lesson.
Each SLM is composed of different parts. Each part shall guide you step-by-
step as you discover and understand the lesson prepared for you.
In addition to the material in the main text, Notes to the Teacher are also
provided to our facilitators and parents for strategies and reminders on how they can
best help you on your home-based learning.
Please use this module with care. Do not put unnecessary marks on any part
of this SLM. Use a separate sheet of paper in answering the exercises and tests. And
read the instructions carefully before performing each task.
If you have any questions in using this SLM or any difficulty in answering the
tasks in this module, do not hesitate to consult your teacher or facilitator.
Thank you.
What I Need to Know
This module will help you understand the concepts of propositions. To be specific,
you will learn how to illustrate a proposition as you go through its pages.
What I Know
Choose the letter of the best answer. Write the chosen letter on a separate sheet of
paper.
For items 5-10, identify the only proposition among the choices.
5.
a. Alas!
b. Come and see it.
c. Where do you come from?
d. It is a hot day yet it brings comfort.
6.
a. Really?
b. Awesome!
c. Calm down to avoid commotion.
d. Obedience is a good trait of a member.
7.
a. What a bright smile!
b. Is the laugh too loud?
c. Brush your teeth after eating.
d. Enamel covers the outer surface of our teeth.
8.
a. Don’t pick flowers.
b. Does nature teach us?
c. Try smelling a sampaguita flower.
d. Sampaguita is our national flower and is lovely.
9.
a. Mix them.
b. Which hue of green do you like?
c. You can make violet if you mix blue and red.
d. Can you give a pair of complementary colors?
10.
a. That is too much!
b. Take your meds on time.
c. Do I have to drink my medication?
d. If one is overdosed with drugs, then the body may be harmed.
a. It is bias.
b. It is nonsense.
c. It is not declarative.
d. It is a false statement.
14. Which does not make “You will get orange in a mixture of red and
blue.” a proposition?
a. It is false.
b. It is declarative.
c. It is a statement.
d. It gives a command.
1 Propositions
To commence our discussion on logic, this lesson will introduce the key concepts of
propositions. In the end, learners are expected to demonstrate understanding of
these concepts.
What’s In
Determine what type of sentence is each of the following. On a space provided before
each number, write “D” if it is a declarative sentence, “E” if exclamatory sentence,
“Im” if imperative and, “In” if it is interrogative.
Fact or Bluff?
Before you go on, pause for a while and play this game with your family member or
peer. All you have to do is to read the listed sentences. The other player will decide
and tell you whether each sentence is a fact or a bluff. To make it more informative,
you may search about each given topic and tell the reasons why it is a fact or a bluff.
Sentences Answer
You are taller in the morning than in the evening. Fact
There are more right-handed people than left-handed ones. Fact
Sourness is a taste in the tip of the tongue. Bluff
There are more Chinese than American. Fact
Melatonin gives color to our skin. Bluff
Did you both enjoy the game? Try it with somebody else.
What is It
Proposition Defined
A Proposition is a declarative sentence that is either true or false, but not both.
A true proposition has a truth value of “true”, otherwise, its truth value is “false”.
Oftentimes, a small letter is used to denote a proposition. That is, the proposition
a: It is getting clearer.
may be read as
a is the proposition “It is getting clearer.”.
Moreover, a sequence of propositions may be denoted by 𝑝𝑝1 , 𝑝𝑝2 , 𝑝𝑝3 , …
Examples
Determine if each sentence is a proposition or not. If it is, give its truth value.
a: Grounding is beneficial to a person.
b: Forgive and forget.
c: Happy birthday!
d: There is no stronger than the heart of a volunteer.
Solution
a: It is a declarative sentence that may either be true or false, so it is a proposition.
And, since research says it’s true, then its truth value is true.
b: It is an imperative sentence. Hence, it is not a proposition.
c: It is an exclamatory sentence which makes it not a proposition also.
d: It is a declarative sentence that may either be true or false. It is a proposition.
Most especially in cases of front liners, this is true. Otherwise proven to be
wrong, then it is false in that specific instance.
p: Translated to the verbal statement, this mathematical sentence is “three factorials
is equal to six divided by two”. It is a declarative sentence, so it is a proposition.
Meanwhile, since 3! = 6 and 6/2 = 3, then the proposition is false.
q: It is a declarative sentence, but be cautious. Notice that the statement cannot be
true nor false. If the statement is true, it cannot be because the speaker is telling
a joke. If it is false, it cannot be either because the person is speaking the truth.
Hence, it is not a proposition.
𝑝𝑝1 : It is a declarative sentence that may either be correct or not. It is therefore a
proposition. Every great person the world has known has a patient teacher or
coach, acknowledged or not, hence the proposition is true.
𝑝𝑝2 : It is a declarative sentence that may either be true or false which tells us that it
is a proposition. It is especially true if one earns money. It may be false if there is
none to spend or save.
𝑝𝑝3 : It is a declarative sentence that is absolutely true. Thus, it is a proposition.
𝑝𝑝4 : It is a declarative sentence which by law is true. It is a proposition.
Activity 1.1
Consider the following sentences. Write P if it is a proposition, and NP if not.
1. a: The largest continent is Asia.
2. b: Do I need to wash my hands regularly?
3. c: Occipital is the part of our brain responsible for vision so we have
to be sure that it is taken care of.
4. d: Happy Birthday, Inay!
5. e: The longest bone in the body is the femur.
Activity 1.2
Tell whether each of the propositions below is true or false.
1. f: There are 10 years in a decade and 100 years in a century.
2. g: One of the primary colors is yellow.
3. h: Twenty-five is ¼ of a hundred.
4. i: You will get 15 when you subtract 30 from 50.
5. j: Fish is rich in protein and Vitamin D helps the body effectively absorb
calcium.
Around the globe, the human race experienced an unforgettable turning event in the
year 2020. I, you and all the rest out there have in a way or another experienced the
effects of the pandemic COVID-19. Write an essay or propositions about your actual
experiences and your realizations in life while in this crisis.
Note the rubrics shown below which will be used in scoring your essay.
CRITERIA 3 2 1
The essay was The essay was The essay has no
written in an written in an style; no novel
Quality of writing
extraordinary style; interesting style; information and
(score x 3) very informative somewhat not organized
and well-organized informative and
organized
Grammar, usage With no spelling or With some With many spelling
and mechanics grammatical errors spelling or or grammatical
grammatical errors
(score x 2)
errors
Choose the letter of the best answer. Write the chosen letter on a separate sheet of
paper.
1. Which of the following may never describe a proposition?
a. either true or false
b. declarative sentence
c. exclamatory sentence
d. a period at the end of the proposition
For items 5-10, identify the only proposition among the choices.
5.
a. Are there 60 seconds in a minute?
b. Has anybody seen the throne of God?
c. Light travels 186,000 miles per second!
d. Though God may be physically far from us, He is near when His
obedient servant prays
7.
a. Don’t pollute the air.
b. The brain needs oxygen.
c. Be grateful for the priceless air we take in.
d. Have you thanked God for the air we breathe?
8.
a. Good job students!
b. Be proud of hard work.
c. Are you a working student?
d. When a learner studies well, opportunities knock later.
9.
a. Be truthful.
b. It’s correct!
c. Are you sure?
d. It is wonderful.
10.
a. What is your name?
b. Good day everybody!
c. The Philippines is located in East Asia.
d. Can we kill the virus by just washing our hands regularly?
12. Which makes “Leap year occurs every five years” a proposition?
a. It involves time.
b. It is a true statement.
c. It is a false statement.
d. It is a simple sentence.
Create an informative poster on healthy lifestyle. The poster should involve at least
three true propositions.
Republic Act 8293, section 176 states that: No copyright shall subsist in any work of
the Government of the Philippines. However, prior approval of the government agency or office
wherein the work is created shall be necessary for exploitation of such work for profit. Such
agency or office may, among other things, impose as a condition the payment of royalties.
Borrowed materials (i.e., songs, stories, poems, pictures, photos, brand names,
trademarks, etc.) included in this module are owned by their respective copyright holders.
Every effort has been exerted to locate and seek permission to use these materials from their
respective copyright owners. The publisher and authors do not represent nor claim ownership
over them.
Office Address: Gate 2 Karangalan Village, Barangay San Isidro, Cainta, Rizal
Telefax: 02-8682-5773/8684-4914/8647-7487
E-mail Address: lrmd.calabarzon@deped.gov.ph
General Mathematics
Quarter 2 – Module 14:
Simple and Compound
Propositions
Introductory Message
This Self-Learning Module (SLM) is prepared so that you, our dear learners,
can continue your studies and learn while at home. Activities, questions, directions,
exercises, and discussions are carefully stated for you to understand each lesson.
Each SLM is composed of different parts. Each part shall guide you step-by-
step as you discover and understand the lesson prepared for you.
In addition to the material in the main text, Notes to the Teacher are also
provided to our facilitators and parents for strategies and reminders on how they can
best help you on your home-based learning.
Please use this module with care. Do not put unnecessary marks on any part
of this SLM. Use a separate sheet of paper in answering the exercises and tests. And
read the instructions carefully before performing each task.
If you have any questions in using this SLM or any difficulty in answering the
tasks in this module, do not hesitate to consult your teacher or facilitator.
Thank you.
What I Need to Know
This module was prepared with you in mind. This will help you divide into two big
groups the propositions. That is, you will learn the difference between simple and
compound propositions.
What I Know
Choose the letter of the best answer. Write the chosen letter on a separate sheet of
paper.
3. It is a proposition that cannot be broken down into more than one proposition.
a. logical proposition
b. simple proposition
c. compound proposition
d. connective proposition
14. Given the simple propositions a: You are what you eat and b: Your food can
describe your health, what compound proposition can be made?
a. You are not what you eat.
b. Your food cannot describe your health.
c. You are what you eat but your food can describe your health.
d. If you are what you eat, then your food can describe your health.
15. What logical connector best fits in merging the simple propositions c: Life is
more than food and d: The body is more than clothing?
a. or
b. not
c. and
d. if then
What’s In
First, let us review what you have learned in the previous module. Answer the
following with all confidence.
Read the famous poem below by Rudyard Kipling, an Indian short story writer, poet
and novelist. See the wisdom in this poem.
If
by: Rudyard Kipling
Solution:
Notice that among the propositions above, propositions a, d and p are made up of
one declarative sentence each, while propositions 𝑝1 , 𝑝2 , 𝑝3 and 𝑝4 are composed of
more than one declarative sentence.
This informs us that propositions a, d and p are all simple propositions, while
propositions 𝑝1 , 𝑝2 , 𝑝3 and 𝑝4 are compound propositions.
Example 2
Identify the simple components of the compound propositions in Example 1 and the
corresponding symbols using the logical connectors used.
What’s More
Activity 1.1
In the blank before each number, write SP, CP, or N if it is a simple proposition,
compound proposition or not a proposition, respectively. Furthermore, identify the
logical connector/s used if it is a compound proposition.
_______________ 1. If bad company ruins good morals, then one should be mindful
in choosing friends.
_______________ 2. Essential oils do not expire.
_______________ 3. Ponder on the sacrifices of your parents.
_______________ 4. If you study hard, then you will have good grades.
_______________ 5. Have you thought of the sick when you are spending too much?
_______________ 6. In tossing a fair coin once you may get a head or a tail.
_______________ 7. There is wisdom in spending for needs and it makes sense to
think at least twice before giving in for wants.
_______________ 8. Two lines are parallel if and only if they are coplanar and do not
intersect.
_______________ 9. Study hard and rest well.
_______________ 10. Camber is not telling the truth.
The lesson enables you to differentiate a proposition from not. It further teaches you
to categorize a proposition into a simple proposition or compound proposition. You
understood that logical connectors help in forming a compound proposition. In
relation to this, suppose your group is tasked to build a Ferris wheel miniature and
to determine the equation of the function it obeys. As a member of a five-person
group, which of these tasks will you take part in or not? And, why? Will it be doing
the research, contributing to the expenses, buying the materials, designing the
project, constructing the wheel, computing the equation or presenting the output?
Answer in just one sentence. Most possibly, your answer is a compound sentence
with conjunctions or those logical connectors. Write it on another sheet of paper.
Assessment
Choose the letter of the best answer. Write the chosen letter on a separate sheet of
paper.
1. Which describes a compound proposition?
a. It is neither true nor false.
b. It is an imperative sentence.
c. It is made up of simple propositions joined by logical connector/s.
d. It is a proposition that requires the use of prepositions to form logic.
For numbers 3 to 8, choose the only simple proposition among the options.
3.
a. Climb!
b. Have you climbed a tree?
c. Conserve our coconut trees.
d. The coconut tree is known as the “Tree of life”.
8.
a. What is your name?
b. Good day everybody!
c. The Philippines is located in East Asia.
d. Can we kill the virus by just washing our hands regularly?
For numbers 9 to 13, choose the only compound proposition among each group of
options.
9.
a. Are you sure?
b. You deserve a good break!
c. Busy, techy and frugal consumers tend to shop online.
d. If one is accountable for own decisions, then one should decide wisely.
10.
a. Time is up!
b. Man can outlive time.
c. Time is an independent variable and distance is a dependent one.
d. The clock keeps on ticking while a couch potato enjoys slackness.
12.
a. It’s correct!
b. Are you sure?
c. Be truthful and be trustworthy.
d. It is wonderful and it is a good day.
13.
a. Have you seen it in pictures?
b. Paris’ Eiffel Tower is beautiful!
c. Either watch from afar or climb it.
d. Paris’ Eiffel Tower is named after its maker or it is named after the
place where it stands.
14. Given the simple propositions a: A person prioritizes own spiritual growth and b:
One satisfies own desires. what compound proposition can be made?
a. One does not satisfy own desires.
b. A person does not prioritize own spiritual growth.
c. A person prioritizes own spiritual growth or one satisfies own desires.
d. If a person prioritizes own spiritual growth, then one satisfies own
desires.
15. What logical connector best fits in merging the simple propositions c:
Money is a root of all evil and d: Spending for the needy is wise?
a. or
b. not
c. and
d. if then
Dimasuay, Lynie, Jeric Alcala, and Jane Palacio. General Mathematics: Learner's
Material. Philippines: C & E Publishing, Inc., 2016.
Republic Act 8293, section 176 states that: No copyright shall subsist in any work of
the Government of the Philippines. However, prior approval of the government agency or office
wherein the work is created shall be necessary for exploitation of such work for profit. Such
agency or office may, among other things, impose as a condition the payment of royalties.
Borrowed materials (i.e., songs, stories, poems, pictures, photos, brand names,
trademarks, etc.) included in this module are owned by their respective copyright holders.
Every effort has been exerted to locate and seek permission to use these materials from their
respective copyright owners. The publisher and authors do not represent nor claim ownership
over them.
Office Address: Gate 2 Karangalan Village, Barangay San Isidro, Cainta, Rizal
Telefax: 02-8682-5773/8684-4914/8647-7487
E-mail Address: lrmd.calabarzon@deped.gov.ph
General Mathematics
Quarter 2 – Module 15:
Logical Operators
Introductory Message
This Self-Learning Module (SLM) is prepared so that you, our dear learners,
can continue your studies and learn while at home. Activities, questions, directions,
exercises, and discussions are carefully stated for you to understand each lesson.
Each SLM is composed of different parts. Each part shall guide you step-by-
step as you discover and understand the lesson prepared for you.
In addition to the material in the main text, Notes to the Teacher are also
provided to our facilitators and parents for strategies and reminders on how they can
best help you on your home-based learning.
Please use this module with care. Do not put unnecessary marks on any part
of this SLM. Use a separate sheet of paper in answering the exercises and tests. And
read the instructions carefully before performing each task.
If you have any questions in using this SLM or any difficulty in answering the
tasks in this module, do not hesitate to consult your teacher or facilitator.
Thank you.
What I Need to Know
In this module, you will know the different operations involved in propositions,
especially in compound propositions. You will learn how to perform each of these
operations. Moreover, this will provide you guidance on the symbols of these
operations, their verbal equivalents, and how they are applied in the real world.
What I Know
Choose the letter of the best answer. Write the chosen letter on a separate sheet of
paper.
1. Which is not a logical operator?
a. conditional
b. biconditional
c. negation
d. binegation
3. It is a proposition that can be broken down into more than one proposition.
a. simple proposition
b. compound proposition
c. connective proposition
d. logical proposition
For numbers 6 to 10, choose the logical operator used in each given proposition.
11. Which is the symbol for the proposition “A silent prayer cannot be heard through
a storm”?
a. ∧ 𝑥
b. ~𝑥 → 𝑥
c. ~𝑥
d. ∨ 𝑥
12. Which is the symbol for the proposition “If it is a clean heart that counts
in prayer, then God who is far more than lightyears away listens”?
a. ~𝑧 ∨ 𝑦
b. 𝑦 ∧ 𝑧
c. 𝑦 → 𝑧
d. 𝑧 ↔ ~𝑦
13. Which is the symbol for “Either a silent prayer can be heard through
a storm or God who is far more than lightyears away listens”?
a. (𝑥 ∧ ~) ↔ 𝑧
b. 𝑥 → ~𝑧
c. 𝑥 ∧ ~𝑧
d. 𝑥 ∨ ~𝑧
1 Logical Operators
What’s In
Complete the paragraph by changing the underlined letter with the appropriate
logical connector, then write the letter that corresponds to the correct logical
connector on the blanks next page.
Negation Defined
The Negation of a proposition p is denoted by ~p which is read as “not p”, and is
defined through its truth table
𝑝 ~𝑝
T F
F T
Example 1
State the negation of each of the following propositions.
𝑛1 : Quality determines the price.
𝑛2 : A learned is one who is educated.
𝑛3 : 𝑓(𝑥) = 𝑥 2 is a cubic function.
𝑛4 : An obtuse angle measures 180𝑜 .
𝑛5 : A curve is the shortest distance between two points.
Solution:
~𝑛1 : It is not true that quality determines the price or ~𝑛1: Quality does not
determine the price.
~𝑛2 : A learned is not one who is educated.
~𝑛3 : 𝑓(𝑥) = 𝑥 2 is not a cubic function or ~𝑛3 : It is not true that f(x) = x2 is a cubic
function.
~𝑛4 : An obtuse angle does not measure or ~𝑛4 : It is not true that an obtuse angle
measures 180𝑜 .
~𝑛5 : A curve is not the shortest distance between two points.
p q 𝑝 ∧ 𝑞
T T T
T F F
F T F
F F F
Example 2
Let d and e be propositions.
d: Leniency is long-suffering.
e: Those who misunderstand it abuse it.
Solution:
Example 3
Let r, s and t be propositions.
r: There is a profit in physical exercise.
s: It is best to exercise holiness.
t: A person must be holistically fit.
3. 𝑟 ∧ ~𝑡
4. ~𝑟 ∧ 𝑠
Solution:
1. 𝑟 ∧ 𝑠
2. ~𝑟 ∧ 𝑡
3. There is a profit in physical exercise and it is not true that a person must be
holistically fit.
4. There is no profit in physical exercise and it is best to exercise holiness.
Disjunction Defined
Negation and conjunction do not suffice logic. There are logical statements that
connote the disjunction of propositions. The Disjunction of propositions p and q is
denoted by 𝑝 ∨ 𝑞 which read as “𝑝 𝑜𝑟 𝑞”, and defined through its truth table
p q 𝑝 ∨ 𝑞
T T T
T F T
F T T
F F F
Propositions p and q are each called Disjunct. The disjunction 𝑝 ∨ 𝑞 is false only
when both disjuncts p and q are false.
Example 4
Let t, u and y be propositions.
t: He is an old soul.
u: Old songs soothe his ears.
y: Old fashion is inviting to his eyes.
Solution:
1. Old songs soothe his ears or old fashion is inviting to his eyes.
2. Either he is not an old soul and old songs do not soothe his ears or old fashion
is inviting to his eyes.
3. 𝑡 ∨ (𝑢 ∧ 𝑦)
4. ~𝑡 ∧ (~𝑦 ∨ 𝑢)
Example 5
Let j, k, l and m be propositions.
j: Laughter is the best medicine.
k: Grief causes illness.
l: Prayer relieves pain.
m: God takes charge of worries.
Solution:
1. (𝑚 ∧ 𝑗) ∨ 𝑙
2. ~𝑗 ∧ 𝑚 ∨ 𝑙
3. Laughter is the best medicine or prayer relieves pain.
4. It is either laughter is the best medicine and grief causes illness or prayer
relieves pain and God takes charge of worries.
5. Either grief does not cause illness and laughter is not the best medicine or
prayer relieves pain and God takes charge of worries.
Express the conditionals below in verbal sentences or in symbols, as the case may
be.
1. 𝑥 → 𝑧
2. (~𝑦) → (~𝑥 ∧ ~𝑧)
3. “If dioxins are a culprit to many diseases, then they are found almost
everywhere and plastics, bleached paper, and most commodities contain this
chemical.”
4. “If dioxins are not found almost everywhere, then it is not true that either
plastics, bleached paper, and most commodities contain the chemical dioxin,
or dioxins are a culprit to many diseases.”
Solution:
1. If dioxins are found almost everywhere, then they are a culprit to many
diseases.
2. If plastics, bleached paper, and most commodities do not contain the chemical
dioxin, then it is not true that dioxins are found almost everywhere and it is
not true that dioxins are a culprit to many diseases.
3. 𝑧 → (𝑥 ∧ 𝑦)
4. (~𝑥) → ~(𝑦 ∨ 𝑧)
Example 7
Let f, g, and h be propositions.
f: Parabens are harmful to the body.
g: Parabens are found in many products we use.
h: Parabens can affect health.
Express the conditionals below in verbal sentences or in symbols, as the case may
be.
1. 𝑓 → ℎ
2. (~𝑔 ∧∼ 𝑓) → (~ℎ)
3. If parabens are harmful to the body and are found in many products we use,
then they can affect health.
4. If parabens cannot affect health or they are not found in many products we
use, then they are not harmful to the body.
1. If parabens are harmful to the body, then they can affect health.
2. If parabens are not found in many products we use and if they are not harmful
to the body, then parabens cannot affect health.
3. (𝑓 ∧ 𝑔) → ℎ
4. (~ℎ ∨∼ 𝑔) → ~𝑓
Biconditional Defined
The last logical proposition that we shall consider is Biconditional. This is denoted
by “𝑝 𝑞” or “p iff q” given propositions or Components p and q and it is read as “p
if and only f q”, and defined through its truth table
p q 𝑝 ↔ 𝑞
T T T
T F F
F T F
F F T
Example 8
Let g, h and i be propositions.
g: Only physically handicapped individuals can be called persons with
disabilities.
h: Psychosocially disabled persons like those with chronic illnesses can also avail
PWD ID.
i: There are numerous benefits that come along with owning a PWD ID.
j: Knowledge of the wide extent of the qualifications for PWD has yet to be spread.
What’s More
Activity 1.1
2. A shopaholic should not learn self-control if and only if a good planner does
not save first before spending and it does not make sense to think at least
twice before giving in for wants.
Make spoken word poetry on any topic relevant to you. To be sure that it is meaty,
include as many propositions with logical operators as you can. Use a separate sheet
of paper for your poem.
You may improve your output by checking against the following rubric:
Criteria 3 2 1
The poem reflects a The poem reflects The poem reflects no
specific topic; all little of a specific specific topic; very
Content
ideas are consistent topic; some ideas are few ideas are
(score x 4)
and seamless consistent and consistent and
seamless seamless
All lines highlight Some lines highlight Very few lines
rhythm and reflect rhythm and reflect highlight rhythm and
Structure spoken poetry; most spoken poetry; some reflect spoken poetry;
(score x 3) lines include lines include very few lines include
propositions with propositions with propositions with
logical operators logical operators logical operators
Uses clear, rich and Uses imaginative Uses pure everyday
Language
detailed imaginative language language
(score x 3)
language
Choose the letter of the best answer. Write the chosen letter on a separate sheet of
paper.
For numbers 6 to 10, identify the logical operator used in each compound
proposition.
6. Competence is not confidence.
a. conditional
b. biconditional
c. negation
d. conjunction
8. A great man either wins a game with humility or loses a game as a real man
should.
a. biconditional
b. disjunction
c. negation
d. conjunction
10. Tatay Igo will eat dairy products if and only if they are organic.
a. biconditional
b. disjunction
c. conditional
d. negation
11. Which is the symbol for the proposition “A soft answer turns away wrath
and a harsh word stirs up anger”?
a. ~𝑗 ∨ 𝑘
b. 𝑗 ∧ 𝑘
c. 𝑗 → 𝑘
d. 𝑗 ↔ ~𝑘
12. Which is the symbol for the proposition “A wise man does not listen before
speaking?
a. ∧ 𝑙
b. ~𝑙 → 𝑙
c. ~𝑙
d. ∨ 𝑙
Among the topics listed below, choose one and write a discussion about it. Use
propositions with logical operators to surely add emphasis to important details. Use
the space given to you to write your answer.
Criteria 4 3 2 1
The process is The process is Major points of Major points
discussed discussed the process are are not
completely; completely; discussed, but discussed;
with at least without misconception with or
one example; example; may arise without
manifests an manifests an among readers; example;
Content
understanding understanding with or without manifests an
(score x 3)
of all of some example; understanding
prerequisite prerequisite manifests an of no
skills skills understanding prerequisite
of few skill
prerequisite
skills
Consistently Somewhat Inconsistent; Very
logical; aids logical; tends to inconsistent;
clear and easy somewhat complicate an shows no
Structure
understanding aids clear or understanding understanding
(score x 3)
of the topic easy of the topic of the topic
understanding
of the topic
Topic Topic f, g, h, i Topic k or l Topic b, c or e Topic a or d
(score x 2) or j
uses emphatic uses emphatic uses Uses no
statements and statements or propositions logical
Language appropriate appropriate with logical operators
(score x 2) logical logical operators but
operators for operators for inappropriate
propositions propositions sometimes
Dimasuay, Lynie, Jeric Alcala, and Jane Palacio. General Mathematics. Quezon
City, Philippines: C & E Publishing, Inc., 2016 .
Republic Act 8293, section 176 states that: No copyright shall subsist in any work of
the Government of the Philippines. However, prior approval of the government agency or office
wherein the work is created shall be necessary for exploitation of such work for profit. Such
agency or office may, among other things, impose as a condition the payment of royalties.
Borrowed materials (i.e., songs, stories, poems, pictures, photos, brand names,
trademarks, etc.) included in this module are owned by their respective copyright holders.
Every effort has been exerted to locate and seek permission to use these materials from their
respective copyright owners. The publisher and authors do not represent nor claim ownership
over them.
Office Address: Gate 2 Karangalan Village, Brgy. San Isidro, Cainta, Rizal
Telefax: 02-8682-5773/8684-4914/8647-7487
E-mail Address: lrmd.calabarzon@deped.gov.ph
General Mathematics
Quarter 2 – Module 16:
Truth Values of Propositions
Introductory Message
Each SLM is composed of different parts. Each part shall guide you
step-by-step as you discover and understand the lesson prepared for you.
In addition to the material in the main text, Notes to the Teacher are
also provided to our facilitators and parents for strategies and reminders on
how they can best help you on your home-based learning.
Please use this module with care. Do not put unnecessary marks on
any part of this SLM. Use a separate sheet of paper in answering the exercises
and tests. And read the instructions carefully before performing each task.
Thank you.
iii
What I Need to Know
This module will guide you go beyond the surface of propositions. To further enhance
your knowledge on logical operators, we will explore their truth values through this
module. To help you do this, you will learn how to prepare a table of values given a
proposition or a combination of propositions. In turn, this will help you in
determining the truth values.
What I Know
Choose the letter of the best answer. Write the chosen letter on a separate sheet of
paper.
For numbers 5 to 7, refer to the following problem: p and q are false and r is true.
For numbers 8 to 10, determine the truth values of the propositions p, q and r that
will make the following statements false.
8. 𝑝 ∧ (𝑞 ∨ 𝑟)
a. p and r are false, while q is true.
b. p, q and r are all true or all false.
c. If p is true, then q and r are both false. If p is false, then each of q and r
may either be true or false.
d. If p is true, then q and r are both true. If p is false, then each of q and r
may either be true or false.
9. (𝑝 ∧ 𝑞) ∨ 𝑟
a. p and q should be false. r may be true or false.
b. q should be false. p and r may either be both true or both false.
c. p should be false. Either q is true and r is false, or vice versa, or both are
true.
d. r should be false. p and q may take any truth value except for both are
true.
12. What is the truth value of the conjunction ~(𝑞 ∧ 𝑝) ∧ 𝑟 if p and q are both false
propositions and r is a true proposition?
a. true
b. false
c. neither true nor false
d. information is insufficient
13. What is the truth value of the disjunction 𝑝 ∨ (~𝑟) if p and q are both true
propositions and r is a false proposition?
a. true
b. false
c. neither true nor false
d. information is insufficient
14. What is the truth value of the disjunction (𝑝 ∨ 𝑟) ∨ (~𝑞) if p and q are both true
propositions and r is a false proposition?
a. true
b. false
c. neither true nor false
d. information is insufficient
15. What is the truth value of the conditional 𝑝 → (𝑞 ∧ 𝑟) if p, q and r are true, false
and true propositions, respectively?
a. true
b. false
c. neither true nor false
d. information is insufficient
What’s In
F T F T F
F T F T
F F F F
p q 𝑝 → 𝑞 p q 𝑝 ↔ 𝑞
4. T T 5. T T
T F T F
F T F T
F F F F
Take note that the knowledge of truth tables of logical operators is very important
to be successful in this module. As a learner, you should be familiar with the truth
value of each logical connector.
What’s New
Hey there! Before you continue reading a new lesson, pause for a while. Have a seat.
Take a deep breath. Now, read the poem word for word silently.
I guess you are done reflecting the message of the poem. Today or later, you will
understand the lines on and in it. For the meantime, can you spot which stanzas
deal with concepts of the logical operators negation, conjunction, disjunction,
conditional and biconditional?
If you analyze the poem, you will identify and understand the differences of these
logical operators. You’ll be able to discover concepts behind each of them.
What is It
p
T
F
Suppose we are given two propositions p and q. Since there are four possible
combinations of truth values (TT, TF, FT, FF), then their truth table is:
p q
T T
T F
F T
F F
p q r
T T T
T T F
T F T
T F F
F T T
F T F
F F T
F F F
How many possible combinations of truth values do we have if there are three
propositions? Can you name them? Notice that the number of truth-value
combinations increases geometrically as the number of propositions increase. That
is, there are 21 = 2, 22 = 4, 23 = 8 and 24 = 16 such combinations if there are 1, 2, 3
and 4 propositions, respectively. How many truth value combinations shall we expect
if there are n propositions?
In the earlier module, the truth value of logical operators was introduced, but
in this module, you will learn how to find truth table for the compound proposition.
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.
Scenario 2: Patient B consults his doctor and buys diligently the prescribed
conventional drugs.
Since ~q is true in this scenario and r is false, then their conjunction is false.
And, since p is true and (~𝑞 ∧ 𝑟) is false as we have said, then their disjunction is
true. Simply put, since the proposition involves disjunction and one disjunct p is
true, without further analysis we may conclude that the disjunction is true. That is
because disjunction can only be false if both disjuncts are false. Its truth table is
illustrated as follows:
𝑝 𝑞 𝑟 ~𝑞 ~𝑞 ∧ 𝑟 𝑝 ∨ (~𝑞 ∧ 𝑟)
T F F T F T
Using the truth table for the definition of the conditional, negation and
disjunction statements 𝑝 → 𝑞, ~𝑝 and ~𝑝 ∨ 𝑞 respectively. You need to add three
more columns to indicate the truth values for each statement.
𝑝 → 𝑞 ~𝑝 ~𝑝 ∨ 𝑞
T F T
F F F
T T T
T T T
Example 3
Let p and q be propositions. Determine the truth values of (𝑝 ∧ (~ 𝑞)) ∧ (𝑝 ∧ 𝑞).
Construct its truth table.
Using the truth table for the definition of the negation and conjunction
statements ~𝑞, 𝑝 ∧ (∼ 𝑞) and 𝑝 ∧ 𝑞 respectively. You need to add three more columns
to indicate the truth values for each statement.
~𝑞 𝑝 ∧ ~𝑞 𝑝 ∧ 𝑞
F F T
T T F
F F F
T F F
p q ~𝑞 𝑝 ∧ (∼ 𝑞) 𝑝 ∧ 𝑞 (𝑝 ∧ (~ 𝑞)) ∧ (𝑝 ∧ 𝑞)
T T F F T F
T F T T F F
F T F F F F
F F T F F F
Activity 1
Determine the truth value of each of the following propositions. Show the truth table
of each as well.
1. ~𝑝 ∧ 𝑞 where p and q are both false propositions
2. (𝑝 ∧ 𝑟) ∧ ~𝑞 where p and q are both false and r is true
3. ~(𝑞 ∨ 𝑝) ∧ 𝑟 where p and q are both true and r is false
4. ~𝑝 → (𝑞 𝑟) where p is true and q and r are both false
5. 𝑝 → (𝑞 ∨ 𝑟) where p and q are both false and r is true
Activity 2
Consider the statement “Lito saves money for organic and natural products and he
buys paraben-free items”. Suppose p: Lito saves money for organic and natural
products. And q: He buys paraben-free items. Decide on the truth value of 𝑝 ∧ 𝑞 in
each of the following scenarios.
1. Scenario A: Lito was not able to save much money to buy natural products.
He was able to purchase items some of which contain parabens.
2. Scenario B: The money that Lito has saved was more than enough for paying
paraben-free items. He even was able to buy organic food.
3. Scenario C: Though Lito has not saved for natural items, he prioritized buying
paraben-free products. He is decided to change his lifestyle.
What I Can Do
Make three simple propositions out of things that matter to you most. What
compound proposition involving logical operators shall represent your plan regarding
these three propositions? Express it in symbols and construct a truth table. What
reflection can you make out of the possible combinations of truth values as you can
see from the truth table? Use a separate sheet of paper for your output.
You may improve your output by checking against the following rubric:
Criteria 4 3 2 1
All meaningful Two are Only one is Not
Propositions
and realistic meaningful and meaningful and meaningful
(score x 2)
realistic realistic and realistic
Complete with Incomplete Complete with Incomplete
component component component with
propositions propositions but propositions component
which gradually gradually which gradually propositions;
complicate from complicate from complicate from truth table
simple to simple to simple to with more
compound compound compound than 3
Truth table proposition proposition proposition incorrect
(score x 3) being asked; being asked; being asked; truth values
truth table with truth table with truth table with
all correct truth all correct truth 1-3 incorrect
values values truth values
Assessment
Choose the letter of the best answer. Write the chosen letter on a separate sheet of
paper.
1. What is a proposition that is always true?
a. absolute c. negation
b. contradiction d. tautology
In the minutes of the meeting, it is recorded that “All ten members agreed that
there will be a monthly contribution of ₱50.00. Let p be the statement “The collection
for February is ₱500.00”. Decide on the truth value of the negation ~p given the
following scenarios.
6. Which explains the reason behind the truth value of ~p given Scenario B?
a. Scenario B lacks information.
b. Since three payments were lost, the total collection for February is ₱350.00
only.
c. The other seven members may or may not have paid more than ₱50.00
each.
d. Three payments were lost, but it is a thumbs rule that the one keeping the
collection should make up the lost money.
8. Which explains the reason behind the truth value of ~p given Scenario C?
a. Leaving the group does not relate to the total amount collected.
b. Scenario C does not mention whether the member contributed or not
before leaving the group.
c. The remaining nine members divided ₱500.00 equally among themselves
to meet the target amount.
d. With one member withdrawing his/her connection to the group, the
collection shall be lower than ₱500.00.
10. ~(𝑝 ∧ 𝑞)
12. What is the truth value of the conjunction ~𝑝 ∧ (𝑞 ∨ 𝑟) if p and q are both true
propositions and r is a false proposition?
a. true
b. false
c. neither true nor false
d. information is insufficient
13. What is the truth value of the conditional [𝑝 ∧ (𝑞 ∨ 𝑟)] → [(𝑝 ∧ 𝑞) ∨ (𝑝 ∧ 𝑟)] if p
and r are both true propositions and q is a false proposition?
a. true
b. false
c. neither true nor false
d. information is insufficient
Additional Activities
B. Considering the statement “Wing chun which is about strength and where ability
to avoid fight matters, boils down to math and can be learned”, determine the
truth value of the proposition 𝑞 → (𝑟 ∧ 𝑠) given each scenario:
Scenario A: Matthew upon reading much and correlating wing chun to math in his
research has gradually understood that wing chun is about strength and not fight
and that he can learn it in due time.
Scenario B: Ruth sees math in wing chun. Because of this, she is optimistic that she
can learn it. However, since it is math, she believes it cannot be a good sport in
promoting strength.
Henley, Joe. 2019. "scmp.com." Post magazine. February 17. Accessed February
25, 2019. https://www.scmp.com/magazines/post-magazine/long-
reads/article/2186246/me-and-my-uncle-ip-man-taught-bruce-lee-wing-
chun?module=perpetual_scroll&pgtype=article&campaign=2186246.
Republic Act 8293, section 176 states that: No copyright shall subsist in any work of
the Government of the Philippines. However, prior approval of the government agency or office
wherein the work is created shall be necessary for exploitation of such work for profit. Such
agency or office may, among other things, impose as a condition the payment of royalties.
Borrowed materials (i.e., songs, stories, poems, pictures, photos, brand names,
trademarks, etc.) included in this module are owned by their respective copyright holders.
Every effort has been exerted to locate and seek permission to use these materials from their
respective copyright owners. The publisher and authors do not represent nor claim ownership
over them.
Office Address: Gate 2 Karangalan Village, Brgy. San Isidro, Cainta, Rizal
Telefax: 02-8682-5773/8684-4914/8647-7487
E-mail Address: lrmd.calabarzon@deped.gov.ph
General Mathematics
Quarter 2 – Module 17:
Logical Equivalence and
Conditional Propositions
Introductory Message
Each SLM is composed of different parts. Each part shall guide you
step-by-step as you discover and understand the lesson prepared for you.
In addition to the material in the main text, Notes to the Teacher are
also provided to our facilitators and parents for strategies and reminders on
how they can best help you on your home-based learning.
Please use this module with care. Do not put unnecessary marks on
any part of this SLM. Use a separate sheet of paper in answering the exercises
and tests. And read the instructions carefully before performing each task.
Thank you.
iii
What I Need to Know
KnowKnowKnow
This module was designed and written with you in mind. It is here to help you master
logical equivalence and conditional propositions. The scope of this module permits it
to be used in many different learning situations. The language used recognizes the
diverse vocabulary level of students. The lessons are arranged to follow the standard
sequence of the course. But the order in which you read them can be changed to
correspond with the textbook you are now using.
What I Know
Choose the letter of the best answer and write it on a separate sheet of paper.
For item numbers 2-7, verify ~[𝑝 ∨ (~𝑝 ∧ 𝑞)] ⟺ (~𝑝 ⋀ ~𝑞).
For item numbers 10-15, refer to the conditional proposition, “If a quadrilateral is a
square, then it has equal sides”.
10. What type of conditionals is being depicted by the conditional statement, “If a
quadrilateral is not a square, then it does not have equal sides.”?
a. converse c. inverse
b. contrapositive d. equivalence
14. What type of conditionals is being depicted by the conditional statement, “If a
quadrilateral does not have equal sides, then it is not a square.”?
a. converse c. inverse
b. contrapositive d. equivalence
What’s In
In the past lessons, you have learned the different logical operators, including
negation (~), conjunction (∧), disjunction (∨), conditional (⟶), and biconditional
(⟷).
These logical operators connect propositions and make them compound ones. And
truth values of said propositions can be determined through the use of a truth table.
Let us see whether you can still recall the truth values of logical operators
when used in compound propositions.
Questions:
1. What truth values do you get for 𝑝 → 𝑞?
2. What truth values do you get for ~𝑝?
3. What truth values do you get for (~𝑝) ∨ 𝑞?
4. What have you noticed with every pair of corresponding truth values in the
third and fifth columns?
5. What can you infer from the sixth column?
Two propositions p and q are said to be logically equivalent if they have the same
values in the truth table and if the biconditional 𝑝 ⟷ 𝑞 is a tautology. It is denoted
by 𝑝 ⟺ 𝑞 or 𝑝 ≡ 𝑞.
The above activity shows that (𝑝 → 𝑞) ⟺ [(~𝑝) ∨ 𝑞]. This logical equation is called
Switcheroo Law.
What’s More
Activity 1.1
Tell whether the propositions [(𝑝 ⟶ 𝑞) ∧ ~𝑞] and ~(𝑝 ∨ 𝑞) are logically equivalent by
filling in the correct logical equivalence for each statement.
Proposition Reason
[(𝑝 ⟶ 𝑞) ∧ ~𝑞] Given
⟺ (~𝑝 ∨ 𝑞) ∧ ~𝑞
⟺ ~𝑞 ∧ (~𝑝 ∨ 𝑞)
⟺ (~𝑞 ∧ ~𝑝) ∨ (~𝑞 ∧ 𝑞)
⟺ (~𝑞 ∧ ~𝑝) ∨ 𝜙
⟺ (~𝑞 ∧ ~𝑝)
⟺ (~𝑝 ∧ ~𝑞)
⟺ ~(𝑝 ∨ 𝑞)
Activity 1.2
Using the conditional proposition “If I eat foods high in carbohydrates, then I will
gain weight.”, state the following:
1. Converse : _________________________________________________________
2. Contrapositive: ____________________________________________________
3. Inverse : ___________________________________________________________
Fill in the blanks with the correct words or phrases to complete the following
statements.
What I Can Do
This lesson helps you understand propositions which are logically equivalent. You
also have learned the three other forms of conditional propositions. In this
connection, construct a real-life conditional proposition and state its converse,
contrapositive, and inverse. State which pairs are logically equivalent and explain
what make them so.
Multiple Choice. Choose the letter of the best answer and write it on a separate
sheet of paper.
1. What do you call two propositions with the same truth values?
a. logically equivalent c. contradictions
b. tautologies d. fallacies
For item numbers 10-15, refer to the conditional proposition, “If Matmat is a
responsible student, then he will do his assignments”.
10. What type of conditionals is being depicted by the conditional statement, “If
Matmat does his assignments, then he is a responsible student”?
a. converse c. inverse
b. contrapositive d. equivalence
12. What type of conditionals is being depicted by the conditional statement, “If
Matmat does not do his assignments, then he is not a responsible student”?
a. converse c. inverse
b. contrapositive d. equivalence
14. What type of conditionals is being depicted by the conditional statement, “If
Matmat is not a responsible student, then he will not do his assignments”?
a. converse c. inverse
b. contrapositive d. equivalence
Republic Act 8293, section 176 states that: No copyright shall subsist in any work of
the Government of the Philippines. However, prior approval of the government agency or office
wherein the work is created shall be necessary for exploitation of such work for profit. Such
agency or office may, among other things, impose as a condition the payment of royalties.
Borrowed materials (i.e., songs, stories, poems, pictures, photos, brand names,
trademarks, etc.) included in this module are owned by their respective copyright holders.
Every effort has been exerted to locate and seek permission to use these materials from their
respective copyright owners. The publisher and authors do not represent nor claim ownership
over them.
Office Address: Gate 2 Karangalan Village, Brgy. San Isidro, Cainta, Rizal
Telefax: 02-8682-5773/8684-4914/8647-7487
E-mail Address: lrmd.calabarzon@deped.gov.ph
General Mathematics
Quarter 2 – Module 18:
Tautologies and Fallacies
Introductory Message
This Self-Learning Module (SLM) is prepared so that you, our dear learners,
can continue your studies and learn while at home. Activities, questions, directions,
exercises, and discussions are carefully stated for you to understand each lesson.
Each SLM is composed of different parts. Each part shall guide you step-by-
step as you discover and understand the lesson prepared for you.
In addition to the material in the main text, Notes to the Teacher are also
provided to our facilitators and parents for strategies and reminders on how they can
best help you on your home-based learning.
Please use this module with care. Do not put unnecessary marks on any part
of this SLM. Use a separate sheet of paper in answering the exercises and tests. And
read the instructions carefully before performing each task.
If you have any questions in using this SLM or any difficulty in answering the
tasks in this module, do not hesitate to consult your teacher or facilitator.
Thank you.
What I Need to Know
What I Know
Choose the letter of the best answer. Write the chosen letter on a separate sheet of
paper.
1. What is a proposition statement that is always true?
a. negation b. tautology c. fallacy d. absolute
2. What is a proposition statement that is always false?
a. negation b. tautology c. fallacy d. absolute
11. Which of the following truth table shows that the proposition
𝑝𝑝 → (𝑝𝑝 ∨ 𝑞𝑞) is a tautology?
a. 𝑝𝑝 𝑞𝑞 𝑝𝑝 ∨ 𝑞𝑞 𝑝𝑝 → (𝑝𝑝 ∨ 𝑞𝑞) b. 𝑝𝑝 𝑞𝑞 𝑝𝑝 ∨ 𝑞𝑞 𝑝𝑝 → (𝑝𝑝 ∨ 𝑞𝑞)
T T T T T T F T
T F F T T F F T
F T T T F T T T
F F F T F F F T
For items 13-14, refer to this statement: Charles loves both English and
Mathematics, but he loves neither English nor Filipino.
Honesty is a value that everyone should possess but we cannot deny the fact that
everything that we say is not always true, sometimes we also say false statements.
In the same manner, not everything that we hear is true, and so we should analyze
first what we heard before we believe it. Mathematics also plays an important role in
analyzing statements, through truth tables we can check whether a statement is
always true (tautology) or always false (fallacy).
You have already learned in module 16 the term tautology, which is true for every
value of the two or more given statements. The contradiction is just the opposite of
tautology or you can contradict the tautology statement. Finding the truth values of
propositions will give you the idea if it is a tautology or a fallacy. In previous modules,
you learned how to construct the truth tables of given propositions or arguments,
while on this module your previous knowledge will be intensified as it applied to real-
life situations. Also, in the previous module, a statement that is always false is called
a contradiction, but since in other sources it is also called a fallacy, we will be using
the word fallacy this time since contradiction is an example of logical fallacy. Also,
the word fallacy will be used in module 20 to find the validity of the arguments. It is
hoped that this module will help identify true statements or analyze statements
before you accept them as true or false.
What’s In
Determine the truth value of each of the following propositions. Show the truth table
of each as well.
1. ~𝑝𝑝 ∧ 𝑞𝑞 where p and q are both true propositions
2. 𝑝𝑝 ∨ ~𝑞𝑞 where p and q are both false propositions
3. 𝑝𝑝 → 𝑞𝑞 where p is true and q is false
4. 𝑝𝑝 ↔ 𝑞𝑞 where p is false and q is true
5. (𝑝𝑝 → 𝑞𝑞) ∧ (𝑞𝑞 → 𝑝𝑝) where p and q are both true propositions
6. (𝑝𝑝 ↔ 𝑞𝑞) ∨ 𝑞𝑞 where p and q are both false
7. ~(𝑞𝑞 ∨ 𝑝𝑝) ∧ 𝑝𝑝 where p and q are both true
8. 𝑝𝑝 ∧ (𝑝𝑝 ↔ 𝑞𝑞) where p is true and q is false
9. 𝑝𝑝 → (𝑞𝑞 ∨ 𝑞𝑞) where p and q are both false
10. ~𝑝𝑝 ∧ (𝑝𝑝 → 𝑞𝑞) where p is false and q is true.
Now, that you already know how to perform different types of operations on
propositions, I am confident that you are now ready for the new lesson.
Activity 1:
Determine whether the given statements are always true or just a mistaken belief (false
statement). Write T if the statement is always true or MB if it is a mistaken belief.
1. Today is Monday or today is not Monday.
2. Either Nicco is smart, or he is not smart.
3. If you buy a book then you will read it daily.
4. Assuming that If I plant cactus, then I will get my hands dirty. Since I didn’t
get my hands dirty, therefore I didn’t plant a cactus.
5. If I will study my lessons every day then I will have a passing grade. But, I
study my lessons every day then I will have a passing grade.
6. I love you or I don’t love you.
7. Since I like you, then you will like me too.
9. I can comprehend the writings that I read or I cannot comprehend the
writings that I read.
Activity 2:
Explain whether the given statement is true or false.
1. If I study hard, then I will get an academic award but I will study hard.
Therefore, I will get an academic award.
2. Blessy loves both swimming and running, but she loves neither swimming nor
running.
What is It
A tautology is a compound statement that is true for every value of the individual
statements. The word tautology is derived from a Greek word where ‘tauto’ means
‘same’ and ‘logy’ means ‘logic’.
The simple examples of tautology are:
• Either Mari will buy apples or Mari will not buy apples.
• My pet Yummy is healthy or he is not healthy
• A function is a polynomial function or it is not a polynomial function.
To determine whether a given statement is a tautology, you can use the table of truth
values.
Example:
If I follow the school rules and regulations, then I am a disciplined person, but I
follow the school rules and regulations, therefore I am a disciplined person. Show
that the given statement is a tautology.
Solution:
Step 1: Translate the given statement into symbols.
Let 𝑝𝑝: I follow school rules and regulation.
𝑞𝑞: I am a discipline person.
The statement can be written in symbols as [(𝑝𝑝 → 𝑞𝑞) ∧ 𝑝𝑝] → 𝑞𝑞.
Examples:
1. Twelve is an odd number.
2. Cats can fly.
3. A triangle has four sides.
4. 𝑎𝑎𝑎𝑎 = 𝑏𝑏 2
5. Today is Monday and Tuesday
3. Circular reasoning – a fallacy in which the reasoner begins with what they are
trying to end with.
Example: A chicken must come from an egg.
But, an egg cannot exist without a chicken laying it.
But, a chicken must come from an egg…
Like tautology, truth table can be also used to show that a statement is a fallacy.
Example: Denise loves both singing and dancing, but she loves neither dancing nor
acting.
Solution:
Step 1: Translate the given statement into symbols.
Let 𝑝𝑝: Denise loves singing.
𝑞𝑞: Denise loves dancing.
𝑟𝑟: Denise loves acting.
The statement can be written in symbols as (𝒑𝒑 ∧ 𝒒𝒒) ∧ (∼ 𝒒𝒒 ∧∼ 𝒓𝒓).
Activity 1.1
Determine whether the statement is a tautology or fallacy.
1. If today is Saturday, then tomorrow is Monday
2. Assuming that I am a college degree, then I am a teacher.
3. Either Joshua will buy books or Joshua will not buy books.
4. If I will study hard, then I will pass the examination, but I studied hard,
therefore I passed the examination
5. Aldrin loves both Math and Science, but he loves neither Science nor
English
Activity 1.2
Construct a truth table for each of the following to determine whether the given is a
tautology or a fallacy.
1. (𝑝𝑝 → 𝑞𝑞) ↔ (~𝑞𝑞 → ~𝑝𝑝)
2. ~(𝑝𝑝 ∧ 𝑞𝑞) ↔ ( ~𝑝𝑝 ∨ ~𝑞𝑞)
3. ~(𝑝𝑝 → 𝑞𝑞) ↔ (𝑝𝑝 ∧ ~𝑞𝑞)
4. (𝑝𝑝 ∧ 𝑞𝑞) ↔ (𝑝𝑝 → ~𝑞𝑞)
5. 𝑞𝑞 ∧ ~(𝑝𝑝 ∨ 𝑞𝑞)
A. Fill in the blanks with the correct term or phrase to complete the sentence.
1. A _____________________ is a statement which is true for every value of the
individual statements.
2. _________________ is statement which is always false.
3. __________________ is an incorrect reasoning in proving 𝑝𝑝 → 𝑞𝑞 by starting by
assuming 𝑞𝑞 and proving 𝑝𝑝.
4. __________________ is an incorrect reasoning in proving 𝑝𝑝 → 𝑞𝑞 by starting with
assuming ~𝑝𝑝 and proving ~𝑞𝑞.
5. ___________________ a fallacy in which the reasoner begins with what they are
trying to end with.
On your Own!
Make a compound statement which is either a tautology or a fallacy and
write the statement in symbol. Then, construct a truth table to show that the
statement given is a tautology or a fallacy.
The following rubric will be used to rate your work for each of the four problems:
Criteria 4 3 2 1
The statement One of the Two of the Three or more
Translating
is translated logical logical logical
the
into symbols connectors connectors connectors
statements
with correct used is used are used are
into
logical incorrect incorrect incorrect
symbols
connectors.
The truth One of the Two of the Three or more
Accuracy table has values in the values in the of the values
of the complete and truth table is truth table are in the truth
truth table accurate truth incorrect incorrect table are
values incorrect
Consistently Somewhat Somewhat No textual
logical; aids logical; illogical; tends explanation or
clear and easy somewhat to complicate table of values
Proof
understanding aids clear or the of solution or
statement
of the solution easy understanding answer.
understanding of the solution
of the solution
Assessment
Choose the letter of the best answer. Write the chosen letter on a separate sheet of
paper.
1. Which of the following is a tautology?
a. It is a compound statement that is always true.
b. It is a compound statement that is not always true.
c. It is a compound statement that is sometimes true.
d. It is a compound statement that is neither true nor false.
11. Which of the following truth table shows that the proposition 𝑝𝑝 ∨ (𝑞𝑞 → ~𝑝𝑝) is a
tautology?
12. Which of the following truth table shows that the proposition (𝑝𝑝 ∧ �(𝑞𝑞 ∨ (~𝑝𝑝)� ∧
(~𝑞𝑞)] is a fallacy?
a. 𝑝𝑝 𝑞𝑞 ~𝑝𝑝 ~𝑞𝑞 (𝑞𝑞 ∨ (~𝑝𝑝) �(𝑞𝑞 ∨ (~𝑝𝑝)� ∧ (~𝑞𝑞)] (𝑝𝑝 ∧ �(𝑞𝑞 ∨ (~𝑝𝑝)� ∧ (~𝑞𝑞)]
T T F F F F F
T F F T F F F
F T T F F F F
F F T T T T F
b. 𝑝𝑝 𝑞𝑞 ~𝑝𝑝 ~𝑞𝑞 (𝑞𝑞 ∨ (~𝑝𝑝) �(𝑞𝑞 ∨ (~𝑝𝑝)� ∧ (~𝑞𝑞)] (𝑝𝑝 ∧ �(𝑞𝑞 ∨ (~𝑝𝑝)� ∧ (~𝑞𝑞)]
T T F F T F F
T F F T F F F
F T T F T F F
F F T T T T F
For items 13-14, refer to this statement: Carmela loves both Badminton and
Volleyball, but she loves neither Badminton nor Tennis.
Additional Activities
Draw a conclusion!
Republic Act 8293, section 176 states that: No copyright shall subsist in any work of
the Government of the Philippines. However, prior approval of the government agency or office
wherein the work is created shall be necessary for exploitation of such work for profit. Such
agency or office may, among other things, impose as a condition the payment of royalties.
Borrowed materials (i.e., songs, stories, poems, pictures, photos, brand names,
trademarks, etc.) included in this module are owned by their respective copyright holders.
Every effort has been exerted to locate and seek permission to use these materials from their
respective copyright owners. The publisher and authors do not represent nor claim ownership
over them.
Office Address: Gate 2 Karangalan Village, Brgy. San Isidro, Cainta, Rizal
Telefax: 02-8682-5773/8684-4914/8647-7487
E-mail Address: lrmd.calabarzon@deped.gov.ph
General Mathematics
Quarter 2 – Module 19:
Validity of Categorical
Syllogisms
Introductory Message
This Self-Learning Module (SLM) is prepared so that you, our dear learners,
can continue your studies and learn while at home. Activities, questions, directions,
exercises, and discussions are carefully stated for you to understand each lesson.
Each SLM is composed of different parts. Each part shall guide you step-by-
step as you discover and understand the lesson prepared for you.
In addition to the material in the main text, Notes to the Teacher are also
provided to our facilitators and parents for strategies and reminders on how they can
best help you on your home-based learning.
Please use this module with care. Do not put unnecessary marks on any part
of this SLM. Use a separate sheet of paper in answering the exercises and tests. And
read the instructions carefully before performing each task.
If you have any questions in using this SLM or any difficulty in answering the
tasks in this module, do not hesitate to consult your teacher or facilitator.
Thank you.
What I Need to Know
You encounter arguments in your everyday life, you read them in books and
magazines, and you hear them on television. Even in most examination problems
involving logic are included. Without knowing, you sometimes formulate them when
communicating with other people. Logic will help you to discourse and deal with
others with correct reasoning. Making logic a habit of your thinking makes you
improve your critical thinking skills. As you develop methods and techniques used
to distinguish correct reasoning from incorrect one, you become more confident.
As you may already know the main goal in logic is to determine the validity of
arguments. This module was designed and written to help you know about
determining the validity of categorical syllogisms. It covers varied situations that can
be seen in real life. It is hoped that upon exploring this learning kit you will be eager
and enthusiastic in completing the task required. Although studying logic is
challenging, it is sometimes fun. Good luck!
Let’s find out how far you might already know about this topic! Please take this
challenge! Have Fun!
Choose the letter of the best answer. Write the chosen letter on a separate sheet of
paper.
4. Determine the quantity of the categorical proposition: Some teachers are Math
teachers.
a. affirmative
b. negative
c. particular
d. universal
No P are M.
Some M are S.
∴Some S are not P
9. Which of the following letter name is used as symbol for particular negative
categorical syllogism?
a. A
b. E
c. I
d. O
13. Which is the correct Euler’s diagram of the standard categorical syllogism?
14. Determine the form of the categorical syllogism: Some great teachers are
caring.
All caring people are encouraging. Therefore, some great teachers are
encouraging.
a. IAI-4
b. AII-1
c. AII-3
d. IAI-3
What’s In
Before you proceed with the lesson, you should be able to recall how to construct a
Venn diagram to represent a given statement.
The students may use any method in determining the validity of the
categorical syllogisms. Emphasize that validity is not determined by
the actual truth values of the premises or the conclusion. It is
determined solely by the relationship between the premises and the
conclusion. It doesn’t matter if the premises are true or false. It is
the matter of structure of this argument. Meanwhile a categorical
syllogism is sound if and only if it is both valid, and all of its
premises are actually true. Soundness of an argument was not
discussed in this module. Also, the distribution of terms was not
also covered here which is a necessary concept to apply the set of
rules specifically rules 2 and 3.
Using your reasoning, determine whether the following are VALID or INVALID.
Justify your answers. You may use illustrations to support your claim.
Guide Questions:
1. How did you find the activity?
2. Were you able to determine the validity of each statement?
3. What strategies or methods did you use to justify the validity or invalidity of
each statement?
4. Did you consider the truth value of each proposition in the syllogisms to
determine each validity? Why?
5. How can we determine if the statements just like presented are valid or not?
6. In your own words, what is validity?
Before you begin examining the validity of categorical syllogisms, you must know
first the nature of categorical propositions and syllogisms.
Example 1. Identify the quantifier, subject, copula and predicate in the categorical
proposition: All cookery students are TVL students.
Quantifiers/
Categorical Propositions Quality
Qualifiers
All Cookery students are TVL students. All, are affirmative
No TVL students are academic students. No, are negative
Some SHS students are TVL students. Some, are affirmative
Some TVL students are not academic students. Some, not negative
A standard form categorical proposition occurs in one of the following four forms:
All S are P. No S are P. Some S are P. Some S are not P.
Answers.
1. All TVL students are SHS students.
2. Some Quezonians are God-fearing people.
3. All teachers are the person who needs internet connection.
4. No TVL students are academic students.
5. No great leaders are arrogant people.
Step 1: Identify the conclusion then Step 2: Identify the major and the minor
label the subject with S and the premise. The major premise contains the
predicate with P. Because of the word major term while the minor premise
“so”, the conclusion is the last contains the minor term.
statement.
Example 6: Determine the mood of the categorical syllogism: Some creative thinkers
are SHS students. All SHS students are honest. Therefore, some creative thinkers
are honest.
Example 7: Determine which figure falls in the categorical syllogism in the previous
example.
Since there are 4 figures and 64 moods, there are 4 x 64 = 256 forms of categorical
syllogisms. Only 15 are unconditionally valid and 9 are conditionally valid forms.
UNCONDITIONALLY VALID FORMS
(Valid for both Boolean and Aristotelian standpoints)
Figure 1 Figure 2 Figure 3 Figure 4
AAA EAE IAI AEE
EAE AEE AII IAI
AII EIO OAO EIO
EIO AOO EIO
Once the mood and figure of a syllogism are known, the validity of the syllogism can
be determined by checking the mood and figure against a list of valid syllogistic forms
above. For instance, the categorical syllogism in the form AOO-2 is unconditionally
valid while EAO-3 is conditionally valid.
Euler’s Diagram can also be used to determine the validity of categorical syllogism.
Consider the Euler’s Circles and representation of the four propositions.
Proposition Pictorial representation
(A)
All S are P
(E)
No S are P
(I)
Some S are P
(O)
Some S are not P
Solution:
Given: Given:
All Quezonians are Filipinos. All SHS students are honest.
Nestor is a Quezonian. Some creative thinkers are SHS students.
Therefore, Nestor is a Filipino. Therefore some creative thinkers are honest.
Solution: Solution:
Let S=SHS students’ class, H=honest people’s
class and C=creative thinker people’s class
then we will have the following Euler’s
diagram:
An argument is valid if it is
impossible for the conclusion to
be false given that the premises
are true while it is invalid if it is
possible for the conclusion to be
false given that the premises are In the three figures, the conclusion “some
true. Therefore, the given creative thinkers are honest” is TRUE.
categorical syllogism is VALID. Therefore, we have shown that the given
categorical syllogism is VALID.
Venn diagram uses different ways of illustrating propositions from Euler’s diagram.
Both methods require a little practice before it can be done with the facility. John
Venn used two overlapping circles to represent the relationship between two classes.
The shaded portion represents a class that has no members. It is empty and cannot
hold a value. The circle with an “x” signifies that the class has at least one member.
A I
E O
Here is the three-step procedure to assess the validity of categorical syllogisms using
Venn diagram:
1. Draw three interlocking circles and label them with S, P and M to represent
the minor, major, and middle terms of the syllogism respectively.
2. Draw the diagram to represent each of the two premises but not the conclusion.
Remember:
• Diagram the premises, just as you would when you diagrammed the
premises alone.
• If an argument has universal and particular premises, draw the universal
premise first.
• Use an X to indicate “at least one”, and place it on the line between two
areas if it isn’t clear which side of the line it should be.
• When diagramming two universal premises, make the lines go opposite
directions when filling in the circle (makes it easier for your reader to "see"
each premise)
3. After diagramming the premises, see if the conclusion is consistent with the
drawing. If it is, the syllogism is valid. If not, the syllogism is invalid.
Step 1. Draw three interlocking Step 2.1. Draw the diagram to represent
circles and label them with S, P each of the two premises but not the
and M to represent the minor, conclusion. Since both premises are
major, and middle terms of the universal, you may draw either of the two
syllogism respectively first.
No S are M.
As you can see, the intersection between S
and P is shaded. It means that the
conclusion No S is P is true. Hence, the
categorical syllogism is VALID.
Example 10. Determine the validity of the following using Venn Diagram
Some P are not M.
No M are S. .
∴Some S are P.
Step 1. Draw three Step 2.1. Draw the diagram to represent each
interlocking circles and label of the two premises but not the conclusion.
them with S, P and M to Draw the universal premise first.
represent the minor, major,
and middle terms of the
syllogism respectively.
No M are S.
Step 1. Draw three interlocking Step 2.1. Draw the diagram to represent each
circles and label them with S, P of the two premises but not the conclusion.
and M to represent the minor, Draw the universal premise first.
major, and middle terms of the
syllogism, respectively.
The method of Venn and Euler’s diagram maybe check against the set of rules. The
syllogism is invalid if any one of these rules is violated. Accordingly, a specific formal
fallacy is committed.
Rule 1: There should be three terms in the syllogism each of which is used in the
same sense.
Fallacy: Fallacy of four terms
Example: God is love, love is blind therefore God is blind.
Rule 2: The middle term must be distributed in at least one premise. (At least one of
the middle terms must be universal.)
Fallacy: Undistributed middle.
Example: All teachers are human beings. All gentlemen are human beings.
Therefore, all teachers are gentlemen.
Rule 4: No conclusion drawn from two negative premises. Likewise, If the premises
are affirmative, then the conclusion must be affirmative.
Fallacy: Exclusive premises
Example: No teachers are gentlemen. Some Humans are not teachers. Therefore,
Some gentlemen are not humans.
Rule 6: If both premises are universal, the conclusion cannot be particular. Also
there is no conclusion that can be from two particular premises.
One premise at least must be universal and if one premise is particular, then
the conclusion must be particular.
Fallacy: Existential fallacy
Example: No teachers are gentlemen. All human beings are gentlemen. Therefore,
some human beings are not teachers.
What’s More
Activity 1.1
Write the following categorical proposition in standard form
1. Filipinos are Asians.
2. A reptile is cold-blooded.
3. Many SHS students are with honors.
4. Most introverts aren’t optimistic.
5. All successful people are not cheaters.
Activity 1.2
Determine the validity of the following categorical syllogisms using the Venn diagram.
1. All M are P. 4. Some P are M.
Some S are M. All M are S. .
∴Some S are P. ∴No S are P.
Identify the terms, mood and figure then determine its validity by looking at the table
of valid categorical syllogisms. Write your answer in the table and use the format
given below:
2. All pliers are tools and all screwdrivers are tools. Therefore, all pliers are
screwdrivers.
4. All working students have no laptops and all successful students are persons
who have laptops. Thus, all working students are successful students.
5. All sea vessels that sunk are unsafe vessels. All well-maintained vessels are safe
vessels. Therefore, no vessels that sunk are well-maintained.
Activity 1.4
Reconstruct the syllogistic forms from the following combinations of mood and figure.
1. OAE-3 6. EIA-4
2. AII-3 7. IAE-1
3. AOO-2 8. EAO-4
4. AAA-1 9. EAO-2
5. OEI-3 10. OEA-4
Activity 1.5
Determine the validity of the following categorical syllogisms using any method.
1. All educational games should be encouraged. Not all games are educational
games. Therefore, not all games should be encouraged.
2. All leaders are good communicators. All good communicator people are creative.
Therefore, all creative people are leaders.
3. All good students show love for country. Some students who show love for
country are respectful. Therefore, all respectful students are good students.
A. Please read the sentences carefully and fill in the missing word/s by writing your
answer on the line/s provided.
1. A ________________ is a proposition that relates two classes or categories.
2. A ________________ is a deductive argument in which a conclusion is inferred
from two premises.
3. A ________________ is an argument consisting of exactly three categorical
propositions (two premises and a conclusion) in which there appear a total of
exactly three categorical terms, each of which is used exactly twice.
4. The ________________of a categorical proposition is either universal or
particular
5. The ________________of a categorical proposition is either affirmative or
negative
6. Terms of the Categorical Syllogism
a. ________________is the predicate of the conclusion.
b. ________________is the subject term of the conclusion.
c. ________________is the term that appears in both premises but not in
the conclusion.
7. Parts of the Categorical Syllogism
a. ________________contains the major term.
b. ________________contains the minor term.
8. The ________________of a categorical syllogism consists of the letter
names of the propositions that make it up. Moods are defined as the
arrangement of the premises according to quantity (universal or
particular) and quality (affirmative or negative). In other words, we can
say that mood is determined by the type of standard form categorical
propositions of the syllogism contains.
9. The ________________of a categorical syllogism is determined by the location
of the two occurrences of the middle term in the premises. Four different
arrangements are possible. If we let S represent the subject of the conclusion
(minor term), P the predicate of the conclusion (major term), and M the middle
term, and leave out the quantifiers and copulas, the four possible
arrangements may be illustrated as follows:
10. Since there are 4 figures and 64 moods, there are
_____________________categorical syllogisms. Only ___________________are
unconditionally valid and ________________are conditionally valid forms.
Choose the letter of the best answer. Write the chosen letter on a separate sheet of paper.
3. The copula in the categorical proposition “All STEM students are students with
scientific attitude” is
a. all
b. are
c. STEM
d. scientific
4. Determine the quality of the categorical proposition: Some teachers are not
Math teachers.
a. affirmative
b. b. particular
c. c. negative
d. d. universal
5. If we will change the categorical proposition, “All successful people are not lazy”
in standard form, which of the following is the correct proposition?
a. All S are P.
b. b. No S are P.
c. c. Some S are P.
d. d. Some S are not P.
9. Which of the following letter name is used as symbol for universal negative
categorical syllogism?
a. A
b. E
c. I
d. O
A. Put the syllogism into standard form, symbolizing all the statements
appropriately (use S to indicate the minor term, P the major term, and M
the middle term)
B. Identify the mood and figure of the syllogism.
C. Draw a Venn diagram representing the syllogism, making sure to label the
circles.
D. Determine whether the argument is valid or invalid, based on the diagram.
3. All STEM students are honest. All honest students are persons genuinely
interested in others. Therefore, some persons genuinely interested in
others are STEM students.
II. Write the conclusion to make the following premises valid. If no conclusion can be
validly drawn, write ‘‘no conclusion.’’
1. Some M are P.
All M are S.
2. No M are P.
Some S are M.
3. Some P are M.
No S are M.
4. All P are M.
No M are S.
5. No P are M.
Some M are S.
Books
Kreeft, Peter. Socratic Logic. 3rd. South Bend, Indiana: St. Augustine's Press, 2008.
Electronic References
Republic Act 8293, section 176 states that: No copyright shall subsist in any work of
the Government of the Philippines. However, prior approval of the government agency or office
wherein the work is created shall be necessary for exploitation of such work for profit. Such
agency or office may, among other things, impose as a condition the payment of royalties.
Borrowed materials (i.e., songs, stories, poems, pictures, photos, brand names,
trademarks, etc.) included in this module are owned by their respective copyright holders.
Every effort has been exerted to locate and seek permission to use these materials from their
respective copyright owners. The publisher and authors do not represent nor claim ownership
over them.
Office Address: Gate 2 Karangalan Village, Brgy. San Isidro, Cainta, Rizal
Telefax: 02-8682-5773/8684-4914/8647-7487
E-mail Address: lrmd.calabarzon@deped.gov.ph
General Mathematics
Quarter 2 – Module 20:
Valid Arguments and Fallacies
Introductory Message
Each SLM is composed of different parts. Each part shall guide you
step-by-step as you discover and understand the lesson prepared for you.
In addition to the material in the main text, Notes to the Teacher are
also provided to our facilitators and parents for strategies and reminders on
how they can best help you on your home-based learning.
Please use this module with care. Do not put unnecessary marks on
any part of this SLM. Use a separate sheet of paper in answering the exercises
and tests. And read the instructions carefully before performing each task.
Thank you.
iii
What I Need to Know
KnowKnowKnow
This module was designed and written with you in mind. It is here to help you master
logical equivalence and conditional propositions. The scope of this module permits it
to be used in many different learning situations. The language used recognizes the
diverse vocabulary level of students. The lessons are arranged to follow the standard
sequence of the course. But the order in which you read them can be changed to
correspond with the textbook you are now using.
What I Know
Choose the letter of the best answer. Write the chosen letter on a separate sheet of
paper.
1. What refers to the set of propositions formed by premises supporting the
conculsion?
a. argument
b. tautology
c. fallacy
d. inference
6. Which of the following is true with the argument, “If you are a STEM student, then
you have Basic Calculus subject. You are a STEM student. Hence, you have Basic
Calculus subject.”?
a. It is a fallacy by Fallacy of the Converse.
b. Is is a fallacy by Denying a Conjunct.
c. It is valid by Rule of Disjunctive Syllogism.
d. It is valid by Modus Ponens.
7. Which of the following propositional forms supports the argument in item number
6?
a. [(𝑝 ∨ 𝑞) ∧ (~𝑝)] → 𝑞
b. [(𝑝 → 𝑞) ∧ 𝑝] → 𝑞
c. [(𝑝 → 𝑞) ∧ 𝑞] → 𝑝
d. [~(𝑝 ∧ 𝑞) ∧ (~𝑝)] → 𝑞
8. Which of the following is true with the argument, “If I have higher allowance, then
I can buy my needs and wants. Therefore, if I can buy my needs and wants, then
I have higher allowance.”?
a. It is a fallacy by Improper Transposition.
b. Is is a fallacy by Fallacy of the Consequent.
c. It is valid by Rule of Proof by Cases.
d. It is valid by Rule of Addition.
9. Which of the following propositional forms supports the argument in item number
8?
a. (𝑝 → 𝑞) → (𝑞 → 𝑝)
b. (𝑝 → 𝑞) → [(~𝑝) → (~𝑞)]
c. 𝑝 → (𝑝 ∨ 𝑞)
d. [(𝑝 → 𝑟) ∧ (𝑞 → 𝑟)] → [(𝑝 ∨ 𝑞) → 𝑟]
11. Which of the following propositional forms supports the argument in item
number 10?
a. (𝑝 ∧ 𝑞) → 𝑝
b. [(𝑝 → 𝑞) ∧ (~𝑞) → (~𝑝)
c. [(𝑝 → 𝑞) ∧ 𝑞] → 𝑝
d. (𝑝 → 𝑞) → (𝑞 → 𝑝)
12. Which of the following is true with the argument, “Azel does not eat deep fried
and junk foods. Azel does not eat deep fried foods. Thus, she eats junk foods.”?
a. It is valid by Law of Syllogism.
b. It is valid by Rule of Disjunctive Syllogism.
c. It is a fallacy by Denying a Conjunct.
d. It is a fallacy by Affirming the Disjunct.
13. Which of the following propositional forms supports the argument in item
number 12?
a. [(𝑝 ∨ 𝑞) ∧ (~𝑝)] → 𝑞
b. [(𝑝 → 𝑞 ) ∧ (𝑞 → 𝑟)] → (𝑝 → 𝑟)
c. [(𝑝 ∨ 𝑞) ∧ 𝑝] → (~𝑞)
d. [~(𝑝 ∧ 𝑞) ∧ (~𝑝)] → 𝑞
14. Which of the following is true with the argument, “Featured delicacy at Rod and
Baby’s Online Pasalubong Store is either the best seller or the most affordable.
This month’s featured delicacy is the best seller. It follows that this delicacy is
not the most affordable.”?
a. It is a fallacy by Affirming the Disjunct.
b. It is a fallacy by Fallacy of the Inverse.
c. It is valid by Rule of Simplification.
d. It is valid by Rule of Contradiction.
15. Which of the following propositional forms supports the argument in item
number 14?
a. [(𝑝 ∨ 𝑞) ∧ 𝑝] → (~𝑞)
b. [(𝑝 → 𝑞) ∧ (~𝑝)] → (~𝑞)
c. (𝑝 ∧ 𝑞) → 𝑝
d. [(~𝑝) → 𝜙] → 𝑝
What’s In
Activity 1
Indicate the correct categorical proposition for each of the following.
P
S P S x P S P
S
x
What’s New
Activity 2
Consider the compound propositions (1) and (2) below, given that:
hypothesis p: I was able to buy suman at Infanta’s agri-booth.
conclusion q: I was in Lucena City during the Niyogyugan Festival.
(1) If I was able to buy suman at Infanta’s agri-booth, then I was in Lucena City
during the Niyogyugan Festival. I was able to buy suman at Infanta’s agri-booth.
Therefore, I was in Lucena City during the Niyogyugan Festival.
(2) If I was able to buy suman at Infanta’s agri-booth, then I was in Lucena City
during the Niyogyugan Festival. I was in Lucena City during the Niyogyugan
Festival. Therefore, I was able to buy suman at Infanta’s agri-booth.
Questions:
1. How would you write the first compound proposition in propositional form?
2. How would you write the second compound proposition in propositional
form?
3. What similarities and differences have you observed between the two forms?
4. Which do you think is acceptable between the two? Why do you say so?
What is It
Solution:
For an argument to be valid when the premises are true, the conclusion must
be true as well. In argument G, the premises are 𝑝 → 𝑞 and p, and the conclusion is
q. It can be seen in the truth table that it is possible that when the premises 𝑝 → 𝑞
and p are both true, the conclusion q is true. Hence argument G is a valid argument.
On the other hand, for argument G’, when the premises 𝑝 → 𝑞 and q are both true, it
is possible to get a false conclusion. Hence G’ is not a valid argument.
Moreover, an argument is valid if conditional (𝑝1 ∧ 𝑝2 ∧ … ∧ 𝑝𝑛 ) → 𝑞 is a
tautology.
𝑝→𝑞
𝑞
∴ 𝑝
This argument is a fallacy of the converse.
If you study hard, then you will get high scores in summative
assessments. If you get scores in summative assessments, then you will
receive high grades. Therefore, if you study hard, then you will receive
high grades.
Solution:
Let 𝑝: “You study hard.”
𝑞: “You get high scores in summative assessments.”
𝑟: “You receive high grades.”
In propositional and standard forms, the argument is expressed as [(𝑝 → 𝑞) ∧
𝑝→𝑞
(𝑞 → 𝑟)] → (𝑝 → 𝑟) and 𝑞 → 𝑟 , respectively.
∴𝑝 → 𝑟
Therefore, by the Law of Syllogism, the argument is valid.
Activity 1.1
Write the propositional form for each item. Decide whether each of the following
arguments is valid or not. If it is valid, identify the rule of inference justifying the
validity. If not, write the type of fallacy used.
Fill in the blanks with the correct words or phrases to complete the following
statements.
1. An argument is
_____________________________________________________________________________
_____________________________________________________________________________
2. A valid argument is
_____________________________________________________________________________
_____________________________________________________________________________
You have learned when an argument can be considered as valid or just a fallacy. But
it must also be noted that though valid, an argument can either be sound or bad.
Hence, we must be very careful in believing and in accepting issues or principles in
life. Now, suppose you are from a poor family and one day you happen to pass by a
note saying, “If you were born poor, then you have no better future ahead of you.”
You know you are poor. So does it mean you have no chance to have a bright future?
The next question you asked yourself was, “Is this valid?” If so, “Is it a sound or a
bad argument?” Share your sentiments about this.
Choose the letter of the best answer. Write the chosen letter on a separate sheet of
paper.
1. What is true about an argument?
a. It is always valid.
b. It can never be a fallacy.
c. It is formed by a conclusion supporting the premises.
d. It is formed by premises supporting the conclusion.
For item numbers 2 to 5, refer to the argument, “If you exercise daily, then you have
higher chance to become healthy. You exercise daily. Therefore, you have higher
chance to become healthy.”
7. Which of the following propositional forms supports the argument in item number
6?
a. [(𝑝 ∨ 𝑞) ∧ 𝑝] → (~𝑞)
b. (𝑝 → 𝑞) → (𝑞 → 𝑝)
c. [(𝑝 → 𝑞) ∧ 𝑝] → 𝑞
d. [(𝑝 → 𝑞) ∧ (~𝑞) → (~𝑝)
8.Which of the following is true with the argument, “If the weather is fair, then there
are visible stars at night. There are visible stars at night. Therefore, the weather is
fair.”?
a. It is valid by Modus Tollens.
b. It is valid by Modus Ponens.
c. It is a fallacy by Fallacy of the Converse.
d. It is a fallacy by Improper Transposition.
9. Which of the following propositional forms supports the argument in item number
8?
a. (𝑝 → 𝑞 ) → [(~𝑝) → (~𝑞)]
b. [(𝑝 → 𝑞) ∧ 𝑞] → 𝑝
c. [(𝑝 → 𝑞) ∧ 𝑝] → 𝑞
d. [(𝑝 → 𝑞) ∧ (~𝑞) → (~𝑝)
10. Which of the following is true with the argument, “If you make it a habit to do
good, then you eventually possess a happy heart. If you possess a happy heart,
then your body and soul become healthier. Hence, if you make it a habit to do
good, then your body and soul become healthier.”?
a. It is a fallacy by Affirming a Disjunct.
b. It is a fallacy by Denying a Conjunct.
c. It is valid by Rule of Contradiction.
d. It is valid by Law of Syllogism.
12. Which of the following is true with the argument, “If you exercise regularly, then
your blood pressure becomes manageable. Your blood pressure becomes
manageable. Therefore, you exercise regularly.”?
a. It is a fallacy by Fallacy of the Converse.
b. It is a fallacy by Fallacy of the Inverse.
c. It is valid by Rule of Addition.
d. It is valid by Rule of Simplification.
13. Which of the following propositional forms supports the argument in item
number 12?
a. (𝑝 ∧ 𝑞) → 𝑝
b. 𝑝 → (𝑝 ∨ 𝑞)
c. [(𝑝 → 𝑞) ∧ (~𝑝)] → (~𝑞)
d. [(𝑝 → 𝑞) ∧ 𝑞] → 𝑝
14. Which of the following is true with the argument, “If you are a licensed teacher,
then you are a professional. You are not a licensed teacher. Therefore, you are
not a professional.”?
a. It is a fallacy by Fallacy of the Inverse.
b. It is a fallacy by Fallacy of the Converse.
c. It is valid by Modus Tollens.
d. It is valid by Modus Ponens.
15. Which of the following propositional forms supports the argument in item
number 14?
a. [(𝑝 → 𝑞) ∧ (~𝑝)] → (~𝑞)
b. [(𝑝 → 𝑞) ∧ 𝑞] → 𝑝
c. [(𝑝 → 𝑞) ∧ (~𝑞) → (~𝑝)
d. [(𝑝 → 𝑞) ∧ 𝑝] → 𝑞
Dimasuy, Lynie, Alcala, Jeric, Palacio, Jane. General Mathematics. Quezon City,
Philippines: C & E Publishing, Inc. 2017. Pp. 183-184, 191