MORPHING MODULE GEAS 1 – Economics and Technoprenuership

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INTEREST C. P 106,202.74 D. P 108,202.74
Interest is the charge for the privilege of
borrowing money, typically expressed as annual 7. Your grandfather’s father borrowed money from
percentage rate January 1, March 25, 1900 worth P1,000,000.00 for
5% interest. Calculate how much money did he paid
ORDINARY SIMPLE INTEREST his lender?
I = Pin A. P 1,011,506.849 B. P 1,021,506.849
F= P+I C. P 1,031,506.849 D. P 1,041,506.849
F = P(1 + in)
8. Your grandfather’s father borrowed money from
Where January 1, March 25, 2000 worth P1,000,000.00 for
I = Interest Earned 8% interest. Calculate how much money did he paid
r his lender?
i= �rate of interest PER DAY� A. P 1,008,579.235 B. P 1,018,579.235
360
P = Present worth or CAPITAL C. P 1,028,579.235 D. P 1,038,579.235
----------------------NOTES-----------------------
F = Future worth
n = Total number of periods per days
r = interest in one year

BANKER’S YEAR
Ordinary simple interest is computed based on ONE
BARKER’S YEAR.
1 Banker ′ s Year = 360 days
In a banker’s year every month is considered to
have 30 days.

1. Wanda borrowed P25,000 for 15% simple interest

from a loan shark. Calculate the interest that
Wanda needs to pay after 45 days?
A. P 368.75 B. P 468.75
C. P 568.75 D. P 668.75

2. Wanda borrowed P25,000 for 15% simple interest

from a loan shark. Calculate the total amount of
money that Wanda owed if this is to be payed in 3
months?
A. P 22,937.5 B. P 23,937.5
C. P 24,937.5 D. P 25,937.5

3. A farmer want to buy a tractor, if he and the

shop owner agreed that the tractor is to be payed
6 months from today worth P 37,500 assuming the
money is worth 8% simple interest, How much does
the tractor cost if the farmer would pay it today?
A. P33,057.69 B. P34,057.69
C. P35,057.69 D. P36,057.69

4. A loan shark has a scheme, she will lend you

P100 today and you need to pay her P110 tomorrow,
what is the rate of interest using simple
interest?
A. 6% B. 16%
C. 26% D. 36%

5. A firm has this type of scheme, they will lend

you money worth P20,000.00 but would say to you
that the interest of 10% will automatically
deducted on the spot so that you will only pay P
20,000.00 at the end of one year. Calculate the
actual rate of interest using simple interest.
A. 10% B. 10.33%
C. 11.11% D. 12.33%

EXACT SIMPLE INTEREST

I = Pin
F= P+I
F = P(1 + in)
r
i= �for ordinary year�
365
r
i= �for a leap year�
366
A year is a leap year if it is exactly
divisible by 4 and for Centennial years
like 1800,1900,2000,2100 it should also be
divisible by 400

6. You lend money worth P100,000.00 for 8% from

January 1- October 10, 2007. Calculate what you
will receive at the end of this time span?
A. P 102,202.74 B. P 104,202.74

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 MORPHING MODULE GEAS 1 – Economics and Technoprenuership
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NOMINAL RATE OF INTEREST 13. You borrowed P10,000, the lender said that a
Nominal rate of interest specifies the rate of 10% rate of simple interest for the first 2
interest and the number of interest periods per months, by then the rate of interest will be
year. calculated 10% compounded monthly for the next
r = im following months thereafter, if you decided to pay
after 5 months starting today, how much do you
r = nominal rate of interest need to pay?
i = interest rate per period A. 10,122.95 B. 10,222.95
C. 10,322.95 D. 10,422.95
m = number of periods
14. You borrowed P20,000.00 in an agreement that
the rate of interest is calculated 15% compounded
COMPOUNDING m continuously because you didn’t know when will you
pay it, but 5 years have passed since then, how
Annually 1 much would you need to pay if you decide to pay it
now.
Semi-annually 2 A. P 41,340.00 B. P 42,340.00
C. P 43,340.00 D. P 44,340.00
Monthly 12

Bi-monthly 6 15. A KOPA investment promised to double your

money in one year, assuming they are using
Quarterly 4 quarterly compounding, calculate the nominal rate
of interest of this KOPA investment.
Daily 365 or 366 A. 100% B. 45.68%
C. 55.68% D. 75.68%
----------------------NOTES-----------------------
𝐄𝐄𝐄𝐄𝐄𝐄𝐄𝐄𝐄𝐄𝐄𝐄𝐄𝐄𝐄𝐄𝐄𝐄 𝐑𝐑𝐑𝐑𝐑𝐑𝐑𝐑 𝐎𝐎𝐎𝐎 𝐈𝐈𝐈𝐈𝐈𝐈𝐈𝐈𝐈𝐈𝐈𝐈𝐈𝐈𝐈𝐈

ERI = (1 + i)m − 1

For continous compounding

ERI = er − 1

For two nominal rates to be equal, their effective

rates must be equal.

9. You owed money for 10% compounded quarterly, if

you decide to pay every six months, how much is
the nominal rate of interest if it is calculated
this way?
A. 10.125% B. 10.225%
C. 10.325% D. 10.425%

10. An investment firm promised to give you 10%

rate of interest compounded continuously, How much
is its effective rate of interest?
A. 10.217% B. 10.317%
C. 10.417% D. 10.517%

11. Two firms offered you different investments,

firm A offered 12% rate of interest compounded
yearly, while firm B offered 10% every 3 months.
Which investment firm is better given that both is
secured to deliver their promises?
A. Firm A
B. Firm B
C. They are just the same
D. Just spend your money do not invest

Compounded Interest

F = P(1 + i)n
r mt
F = P �1 + �
m
Continuous Compounding
F = Pert

F = future worth
P = Present worth
m = mode of compounding
r = specified nominal rate
t = number of years
I = interest rate per period
n = number of periods to interest

12. An investment firm promised you to have

P200,000.00 at the end of one year if you invest
P150,000.00 today, how much is the rate of
interest if being calculated semi-annually?
A. 10.94% B. 20.94%
C. 30.94% D. 40.94%

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 MORPHING MODULE GEAS 1 – Economics and Technoprenuership
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16. A KOPA investment promised to double your
money in one year, assuming they are using
quarterly compounding, calculate the effective
rate of interest of this KOPA investment.
A. 100% B. 45.68%
C. 55.68% D. 75.68%

17. You invested in a company and decided that you

will cash in your investment when it triple its
amount, when will you be able to cash it in if it
is calculated 8% compounded semi-annually. (1 + i)n − 1
A. 11 years B. 12 years P = A� �
C. 13 years D. 14 years i(1 + i)n+m
n
(1 + i) − 1
F = A� �
Annuities i
Annuity is a series of equal payments “A” made at ----------------------NOTES-----------------------
equal intervals of time.

1. Ordinary Annuity
- the type of annuity where the payments are
made at the end of each period

(1 + i)n − 1
P = A� �
i(1 + i)n

(1 + i)n − 1
F = A� �
i

18. Your family decided to buy a property worth

P5,000,000.00, you paid P2,000,000.00 for it today
as a first payment and your family needs to pay
monthly for the next 10 years. How much is this
monthly amortization if the rate of interest is 3%
compounded monthly.
A. P 18,968.22 B. P 28,968.22
C. P 38,968.22 D. P 48,968.22

19. Your family decided to buy a property worth

P5,000,000.00, how much does this property worth
10 years after if the rate of interest is 3%
compounded monthly.
A. P 5,746,767.736 B. P 6,746,767.736
C. P 7,746,767.736 D. P 8,746,767.736

20. You took a loan from the government worth

P500,000.00 for the renovation of your house
“Housing Loan”. If the rate of interest is 4%
yearly, if the payment of this loan will be in a
form of a salary deduction, how much is the
monthly salary deduction for this loan if you will
pay for it for 6 years.
A. P 6,806.199 B. P 7,806.199
C. P 8,806.199 D. P 9,806.199

21. You bought a car worth P1,500,000.00, under a

promo of ZERO down payment, but in return, you
would pay P 35,800.00 monthly for 5 years, what is
the nominal rate of interest given to you by the
company, and how much is its effective rate of
interest.
A. 9.146%,9.539% B. 11.146%,11.733%
C. 13.146%,13.196% D. 15.146%,16.243%

2. Deffered Annuity
- is the type of annuity where the first payment
is made later than the first or is made several
periods after the beginning of the annuity.

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22. Your parents invested P100,000.00 when you DEPRECIATION VS INFLATION
were 4 years old for your college education fund
as a birthday gift, if the investment’s nominal Depreciation is the decrease in the value of
rate of interest is 6% compounded annually, how physical property due to passage of time.
much would you receive for your tuition fee for 5
years starting from your 17th birthday? Inflation refers to the rise in the prices of most
A. P 43,768.81 B. P 47,768.81 goods and services, the purchasing power of a
C. P 49,768.81 D. P 50,768.81 currency unit decreases this impacts the cost of
living in a country. When inflation is high, the
Annuity Due cost of living gets higher as well, which
- is the type of annuity where the payment is ultimately leads to a deceleration in economic
made at the beginning of each period growth
----------------------NOTES-----------------------

(1 + i)n − 1
P = A� �
i(1 + i)n−1
n
(1 + i) − 1
F = A� �
i

23. You took a loan worth P 60,000.00 payable in 2

years with 10% compounded quarterly, calculate how
much you will pay for it yearly if the payment is
done at the beginning of every period.
A. P 31,480.178 B. P 34,747.821
C. P 32,747.821 D. P 37,480.178

Perpetuity
- is an annuity in which the periodic payments
continue indefinitely.

A
P=
i
24. You are investing P1,500 for your retirement,
the firm gives you 3% rate of interest compounded
monthly, how much is the present worth of this
investment.
A. P 500,000.00 B. P 600,000.00
C. P 700,000.00 D. P 800,000.00

Capitalized Cost
Refers to the present worth of a property that is
assumed to last forever. The capitalized cost of
any property is the “sum of the
1. First Cost
2. Cost of perpetual maintenance
3. Cost of replacement

A P
CC = FC + +
i (1 + i)n − 1
25. You bought a tractor for P85,000.00, if you
plan to sell after 8 years for P25,000.00 at the
end of its life. Calculate the capitalized cost if
the money is worth 8% compounded yearly.
A. P 155,511.07 B. P 145,511.07
C. P 135,511.07 D. P 125,511.07

26. You bought a tractor for P85,000.00, if you

plan to own it forever and prepared for the
projected cost of maintenance of P6,000 yearly,
calculate the capitalized cost if the money is
worth 8% compounded yearly.
A. P 150,000 B. P 160,000
C. P 170,000 D. P 180,000

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 MORPHING MODULE GEAS 1 – Economics and Technoprenuership
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27. Your grandfather has saved his money in a box 32. You bought a new car for P1,500,000.00. The
for 40 years, in total he saved P40,000,000.00 in salvage value of this car is P250,000.00 at the
cash. How much is the value of this money in end of 10 years. Calculate the total depreciation
todays peso of inflation is maintained at 2.6% cost of this car for its first 5 years using
yearly. double declining balance method.
A. P13,327,339.77 B. P14,327,339.77 A. P 1,008,480.00 B. P 1,018,480.00
C. P15,327,339.77 D. P16,327,339.77 C. P 1,028,480.00 D. P 1,038,480.00

28. You saved your hard earned money into the bank 4. Sum of the year method (SYD)
for a time deposit of 5 years, if it is at 𝐔𝐔𝐔𝐔𝐔𝐔𝐔𝐔𝐔𝐔 𝐌𝐌𝐌𝐌𝐌𝐌𝐌𝐌 𝐒𝐒𝐒𝐒𝐒𝐒𝐒𝐒 𝟐𝟐
principal worth P500,000.00 for 1.8% rate of
interest compounded quarterly. How much is your
money in todays peso if inflation is maintained at
3% yearly.
A. P 371,826.90 B. P 471,826.90
C. P 571,826.90 D. P 671,826.90

29. You have P 500,000.00 then you invested in a

company that promises 8% annual rate of interest,
the maturity of your investment is 10 years. How 33. You bought a laptop for P35,000.00 and is
much is your money worth after 10 years if projected to be sold for a salvage value of only
inflation is maintained at 3.4% yearly. P15,000.00 after 4 years. What is its book value 2
A. P 672,684.4488 B. P 772,684.4488 years after purchase. Use SYD method of
C. P 872,684.4488 D. P 972,684.4488 depreciation.
A. P21,000.00 B. P23,000.00
Ways to Calculate Depreciation C. P25,000.00 D. P27,000.00
1. Straight Line Method
Straight line method of depreciation assumes that 5. Sinking Fund Method
the loss in value of the property is directly 𝐔𝐔𝐔𝐔𝐔𝐔𝐔𝐔𝐔𝐔 𝐌𝐌𝐌𝐌𝐌𝐌𝐌𝐌 𝐒𝐒𝐒𝐒𝐒𝐒𝐒𝐒 𝟔𝟔
proportional to the age of the property.

𝐔𝐔𝐔𝐔𝐔𝐔𝐔𝐔𝐔𝐔 𝐌𝐌𝐌𝐌𝐌𝐌𝐌𝐌 𝐒𝐒𝐒𝐒𝐒𝐒𝐒𝐒 𝟐𝟐

ny� − 1
Total Depreciation after ′n′ years=
Ly� − 1
FC = First Cost
----------------------NOTES-----------------------
SV = Salvage Value
L = Life span of the property

30. You bought a cellphone worth P75,000.00, then

after 8 months a new model is out and you can now
sell your phone for P30,000.00. How much was the
book value of this phone 2 months after you bought
it?
A. P61,750.00 B. P62,750.00
C. P63,750.0 D. P64,750.00

2. Declining Balance Method

𝐔𝐔𝐔𝐔𝐔𝐔𝐔𝐔𝐔𝐔 𝐌𝐌𝐌𝐌𝐌𝐌𝐌𝐌 𝐒𝐒𝐒𝐒𝐒𝐒𝐒𝐒 𝟔𝟔

FC = First Cost
SV = Salvage Value
L = Life span of the property

31. You bought a new car for P1,500,000.00. The

salvage value of this car is P250,000.00 at the
end of 10 years. Calculate the total depreciation
cost of this car for its first 5 years using
declining balance method.
A. P 685,996.74 B. P 787,627.74
C. P 887,627.74 D. P 985,996.74

3. Double Declining Balance Method

𝐔𝐔𝐔𝐔𝐔𝐔𝐔𝐔𝐔𝐔 𝐌𝐌𝐌𝐌𝐌𝐌𝐌𝐌 𝐒𝐒𝐒𝐒𝐒𝐒𝐒𝐒 𝟔𝟔

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 MORPHING MODULE GEAS 1 – Economics and Technoprenuership
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34. You owned an motorcycle by buying it for
P98,000.00, it this motorcycle can be sold for
P25,000.00 after the end of its life for 8 years.
Calculate the total depreciation cost in the first
two years using Sinking Fund Method if the money
is worth 4% compounded annually.
A. P15,161.96 B. P16,161.96
C. P17,161.96 D. P18,161.96
BONDS & STOCKS
A bond is a certificate of indebtedness of a
corporation usually for a period not less than ten
years and guaranteed by a mortgage on certain
assets of the corporation or its subsidiaries
A stock is a share which entitles the holder to a
fixed dividend, whose payment takes priority over
that of common-stock dividends.
Break-even Analysis
Break-Even is the condition for which revenues and
cost are equal. It is necessary to determine in
order to estimate the profit or loss.
35. XYZ Corporation manufactures book cases that
sells for P65.00 each. It costs XYZ P35,000 per
year to operate its plant. This sum includes rent,
depreciation charges on equipment and salary
payments. If the cost to produce one bookcase is
P50, how many bookcases must be sold each year for
XYZ to avoid taking a loss?
A. 2334 B. 3243
C. 3234 D. 2344
Customer Pain Points
Pain points are what drive sales, in a
business context, a pain point refers to a problem
the customer has, doing business is all about
identifying and providing solutions for pain
points.
Target Market
A group of customers who will be the focus
of your company’s efforts, customize its product
offerings and marketing strategies to specific
groups of potential customers.
Market Segmentation
the process of grouping a market into smaller
subgroups defined by specific characteristics.
Market segments or subgroups of buyers with
similar characteristics.
Geographics: where they live; region, state,
county, city, and/or area
Demographics: personal characteristics of
population include age, gender, family size,
family life cycle, income, occupation, education,
religion, race, nationality, and/or social class
Psychographics: social and psychological
characteristics- personality, values, opinions,
beliefs, motivations, attitudes, and lifestyle
activities and interests
Buying Characteristics: knowledge of and personal
experiences with the actual goods and services

TECHNOPRENEURSHIP 101 ----------------------NOTES-----------------------

Technological Entrepreneurship
It is simply entrepreneurship in a technology
intensive context.
It is a process of merging technology prowess and
entrepreneurial talent and skills.

Entrepreneur
An innovator or developer who recognizes
and seizes opportunities; converts these
opportunities into workable/marketable ideas; adds
value through time, effort, money or skills;
assumes the risks of the competitive marketplace
to implement these ideas; realizes the rewards
from these efforts

Entrepreneurship
The practice of embarking on a new business
or reviving an existing business by pooling
together a bunch of resources in order to exploit
new found opportunities

“Creating the “New” and destroying the “Old”:”

New knowledge, New products, New processes New
services, New markets, New business models, New
raw materials etc.

Who is a Technopreneur?
An entrepreneur who uses cutting-edge technology
to develop new business, an entrepreneur who
involves himself in technological changes in
producing goods and services for his organization

2 Types of Technology Entrepreneurship

1. Technology Developers – those who develop

unique technology capable of driving a new
business (INVENTORS).

2. Technology Users – those who see a new

technology and understand how it can be applied to
meet a new market need (INNOVATORS).

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 MORPHING MODULE GEAS 1 – Economics and Technoprenuership
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Value Proposition You Cannot Patent Ideas
A disruptive innovation that answers a big You may have a genius idea for faster-than-light
problem will attract the greatest attention. travel, but that will not get you a patent unless
“Why should your customer buy your product?” you can outline how to develop a tangible process
or device for actually doing so, in which case you
Benefits vs Features can seek to patent it.
Features- are the things that your engineers build
specifically for your product. Mathematical Formulas Not Patentable
Benefits- are the direct result of a feature. They There are other discoveries that fall into the
are things a customer can accomplish because of broad category of abstract ideas and are thus
the features of your product. unpatentable, You cannot patent a law of nature,
These all exist independently of human
The features defines the product, the people intervention, whether we have discovered them or
defines the benefits, your customers defines the formulated their rules yet or not, and must be
value. freely available to all of humanity for its
understanding and betterment.
The product should provide solutions to the
customer’s problems or solution driven, or improve 2. Trademarks
their live by increasing their efficiency in any It protect logos, sounds, words, colors, or
way. symbols used by a company to distinguish its
service or product.
Business Ethics Examples
-consists of a set of moral principles and Facebook logo, Pepsi logo , McDonald’s
values that govern the behavior of the golden arches, and the font used by Dunkin etc.
organization with respect to what is right and
what is wrong It spells out the basic philosophy 3. Copyrights
and priorities of an organization in concrete This protects the rights of the original
terms. creator of original works of intellectual
property. Copyrights must be tangible.
Social Responsibility
-pertains to people and organizations For example, you can’t copyright an idea. But you
behaving and conducting business ethically and can write down an original song, poem or a speech.
with sensitivity towards social, cultural,
economic, and environmental issues 4. Trade Secrets
An information that isn’t public but with a huge
Intellectual Property economic value to the company. They may be a
“Intellectual property refers to creations of the formula, recipe, or process used to gain a
mind. It can be an invention (patent / utility competitive advantage.
model), a design (industrial design), a brand name
(trademark, or a literary and artistic work
(copyright).” AS EARLY AS NOW!!!
1. Patent START READING
An intellectual property right granted by the
government of a nation to an inventor that gives RA 9292
them the exclusive right to the invention
----------------------NOTES-----------------------
Do Patents Really Promote Innovation?
Imagine a world in which there was no patent
system to guarantee inventors property rights to
their discoveries. In such a world, inventors
would have every incentive to be secretive and to
guard jealously their discoveries from competitors
[because those discoveries] could, of course, be
copied with impunity. “By contrast, in a world
where property rights in invention were protected,
the situation would be very different. Inventors
would now feel free to promote their discoveries
as widely as possible so as to maximize returns
either from commercializing their ideas themselves
or from [licensing] rights to the idea to others.
Patents Don’t Block Innovation, They Promote It.

What, Exactly, Can You Patent?

1. PRODUCTS
Products are physical things—whether they
be machines (a new type of robotic welder),
manufactures (an artificial knee made of
titanium), or compositions of matter (a new
chemical “superglue” for binding materials
together)

2. PROCESS
Processes (or methods), on the other hand,
are a means to an end—either a means of doing
something new (being able to pay for purchases
directly from your smartphone), or a new way of
doing something old (using “pinch, swipe, and
zoom” gestures on a touchscreen, rather than
clicking drop-down menus, to manipulate text,
music, and images on a smartphone).

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