Math1 (BSOA1A)

Republic of the Philippines
CITY COLLEGE OF EL SALVADOR

El Salvador City, Misamis Oriental
Email: elsalvador.citycollege@gmail.com
VISION
The City College of El Salvador envisions herself as a public Higher Learning Institution in
Northern Mindanao that will empower the citizenry and provide social inclusion of the
disadvantaged sector through Education to cut the cycle of poverty by producing globally
competitive professionals.
MISSION
It shall pursue a multi-sector agenda which include:
1. Training of competent and responsive human resource for community and industry
requirements;
2. Intellectual formation that generates knowledge for people empowerment and
sustainable development;
3. Bringing of boundaries across communities and other institutions; and
4. Being a laboratory for educational research and innovation.
GOALS
1. Strengthen instruction and training for skills in thrust areas of agriculture, fisheries,
commerce, industry, manufacturing and tourism;
2. Develop competent professionals to serve as a human resource pool for the growing
number of industries, government agencies and private enterprises;
3. Cater the uplift of the marginalized sector and cultural communities, indigenous people
and access to quality education for holistic development;
4. Promote sensible utilization and environmental protection within the context of
sustainable development; and
5. Promote peace and development
CORE VALUES
S – Service to God and Community
A – Accountability and Transparency
V – Victorious in all Undertakings
I – Inspiration/ Brother’s Keeper
O – Optimum use of Human Potentials
R – Resilient in Life’s Journey

PROGRAM OUTCOME:
A graduate of BS Office Administration should be able to:
1. Support management in office administration guided by the ethical standards.
2. Maintain office procedures to secure efficiency and compliance to company
policies.
3. Demonstrate business communication skills.
4. Manage effectively diverse records and monitor office supplies.
5. Establish and maintain effective interpersonal relations and demonstrate an ethical
behavior in the environment.
6. Live a life of positive moral values rooted in the SAVIOR doctrine.
7. Commit and dedicate to a solid understanding of self and of his/her duties and
responsibilities to a family and community, church, country, and the world.
8. Strive for a life and lifestyle in solidarity with marginalized and the poor.
9. Pursue courses of actions and options with respect to crucial issues in relation to
the environment, poverty, peace and justice, moral and gender-based issues.
10. Read, write and speak effectively in English and Filipino/local languages, and
appreciates and utilizes the modern electronic communications.
COURSE DESCRIPTION:
This course covers the study of numbers and methods of solving problems. It aims to equip
students with the fundamental knowledge of simple interest and bank discount, compound
amount and future value, present value, simple ordinary annuity due, sinking fund and
amortization, depreciation, and stocks and bonds. The concepts will help students in their
higher level business subjects.
COURSE LEARNING OUTCOME:

At the end of the course, of the students are expected to:
1. The concept of investment mathematics that will be useful in higher level business
subjects.
2. The computational background in investment mathematics.
3. The computational tools in order to equip them in making critical decisions for the
business and household.
4. The step by step procedure of the calculations required in solving problems.
5. The impact of investment analyses in business decision-making process.


TOPIC 1:
 Simple Interest
DURATION:
 90 minutes
LEARNING OUTCOME:
 Students must be able to:
 calculate the simple interest
 apply the knowledge of simple interest in real life situations such as investment
or loan offer
CONCEPT NOTES:
 Definition 1.1
An interest is an amount of money paid in a certain period of time. Interest that is

paid of amount whether a borrowed or an invested is called simple interest.
The formula is given below:
I = Prt
where:
I = simple interest
P = initial/principal value
r = rate of interest (in percent)
t = time frame (in years)
 Example 1.1
You deposit ₱2,500 in a savings account named Pedro Santos at Phil Bank.
This saving is used for buying a new clothes after 3 years with an interest rate of 5%.
Find the amount he invest after 3 years.
Solution:
First, we must determine the given values from the problem.
P = ₱2,500
r = 5% = 0.05 (change percent to decimal)
t = 3 years
hhhhhhh

We will used the simple interest formula, that is,

I = Prt = (₱2,500)(0.05)(3) = ₱375
Thus, Pedro will have an interest of ₱375 after 3 years.
 Example 1.2
Find the simple interest if an investment of ₱37,000 at 4% in the period of
5 years?
P = ₱37,000
r = 4% = 0.04
t = 5 years
I = Prt = (₱37,000)(0.04)(5) = ₱7,400
Thus, the interest is ₱7,400 after 5 years.
ASSESSMENT:
Name: _____________________________________ Date Completion: ____________
Course, Year and Section: _____________________ Score: _____________________
Instructions: Read the questions carefully. Show your complete solution.
1. To pay for textbooks, a student borrows ₱2,450 from a credit union at 6.5% simple
interest. He will repay the loan in 6 months, when he expects to be paid for tutoring. How
much interest will he pay?
2. On March 3, 2009, Shiela invested worth ₱45,000 in the Phil Pacific Bank at simple
interest rate of 4%. How much is the interest she invested after 3 years?
3. If ₱20,000 is invested at 8% simple interest for 4 years. Find the simple interest.

TOPIC 2:
 Maturity value in simple interest
DURATION:
 90 minutes
LEARNING OUTCOME:
 calculate the maturity value
CONCEPT NOTES:
 Definition 2.1
The maturity value (future value), denoted by F, is the sum of principal value (P)
and the interest (I). The formula is given below:
F=P+I (1)
F = P + Prt
F = P (1 + rt) (2)
 Example 2.2
From the Example 1.2, find the maturity value.
Solution:
P = ₱2,500
I = ₱375
F = P + I = ₱2,500 + ₱375 = ₱2,875.
Thus, the maturity value after 3 years is ₱2,875.
 Example 2.3
hhhhhhh
Rick borrows ₱20,000 from his parents at 5.25% to add a room on his house.
He plans to repay the loan in 9 months with a bonus he expects to receive at that time.
Find the interest and maturity value.
Solution:
P = ₱20,000
r = 5.25% = 0.0525 (change percent to decimal)

t = 9 months = 0.75 year

(conversion: 1 year = 12 months)
To solve the interest, we use the formula and substitute the given values. That
is,
I = Prt = (₱20,000)(0.0525)(0.75) = ₱787.50
Moreover, we are calculating the maturity value.

F = P + I = ₱20,000 + ₱787.50 = ₱27,787.50
Thus, the maturity value after 9 months is ₱27,787.50.
ASSESSMENT:
1. April wants to borrow ₱40,000 from a bank that gives an annual interest rate of 5%.
However, she only wants to borrow the fund for a 9-month period and will be able to pay
the bank immediately after 9 months. How much interest is she going to pay from
borrowing the amount of money? What is the accumulated value of the amount borrowed
after the 9-month period?
2. An accountant for a corporation forgot to pay the firm’s income tax of ₱725,896.15 on
time. The government charged a penalty of 9.8% interest for the 2 years the money was
late. Find the total amount (tax and penalty) that was paid.
3. A company invested ₱2.2 million at Gold Pack Corporation. The interest rate is 2.75%,
find the total investment after 5 years.

TOPIC 3:
 Finding Present Value in simple interest
DURATION:
 90 minutes
LEARNING OUTCOME:
 calculate the present value
CONCEPT NOTES:
 Definition 3.1
A sum of money that can be deposited today to yield some larger amount in the
future is called the present value of that future amount. Present value refers to the
principal to be invested or loaned.
𝐼
P= (1)
𝑟𝑡
𝐹
P= (2)
1+𝑟𝑡
 Example 3.2
Asia Bank loaned money to Maki Company at 8% simple interest for
3 months. If the amount of interest earned was ₱4,000, use the ordinary interest
method to find the principal amount borrowed.
Solution:
I = ₱4,000
r = 8% = 0.08
𝐼 ₱4,000
P= = = ₱200,000
hhhhhhh
𝑟𝑡 (0.08)(0.25)
Thus, the bank borrowed a principal amount worth ₱200,000.

 Example 3.3
The tuition fee in Arylle Academy worth ₱20,738 will be due when the spring
term begins in 15 months. What amount should a student deposit today, at 10.25%, to
have enough to pay the tuition?
Solution:
F = ₱20,738
r = 10.25% = 0.1025
𝐹 ₱20,738
P= = = ₱18,382.71
1+𝑟𝑡 1+(0.1025)(1.25)
Thus, student must be deposit worth ₱18,382.71 enough to pay the tuition fee.
ASSESSMENT:
1. The repayment on a loan was ₱16,275. If the loan was for 24 months at 6.8% interest
a year, how much was the principal?
2. A firm of accountants has ordered 7 new laptop at a cost of ₱35,995 each. The laptop
will not be delivered for 7 months. What amount could the firm deposit in an account
paying 6.42% to have enough to pay for the machines?
3. Lorie Reilly decides to go back to college. For transportation, she borrows money
from her parents to buy a small car for ₱720,000. She plans to repay the loan in
3 years. What amount can she deposit today at 5.25% to have enough to pay off the
loan?

TOPIC 4:
 Finding Rate of Interest
DURATION:
 90 minutes
LEARNING OUTCOME:
 calculate the rate of interest in simple interest
CONCEPT NOTES:
 Definition 4.1
An interest rate, denoted by r, is the rate or percent in annual (yearly) basis.

𝐼
r=
𝑃𝑡
 Example 4.2
If P 12,000 accumulates to P 13,680 when invested a simple interest for
2 years, find the interest rate.
Solution:
F = ₱13,680
P = ₱12,000
I = ₱13,680 – ₱12,000 = ₱1,680
t = 2 years
𝐼 1,680
r= = = 0.07 x 100% = 7%
𝑃𝑡 12,000 (2)
hhhhhhh
Thus, the interest rate in 2 years is 7%.
 Example 4.3
An interest of ₱853.12 was paid on a ₱7,500 simple-interest loan at the end of
1 year and 9 months. What was the rate of interest?

Solution:
I = ₱853.12
P = ₱7,500
t = 1 year and 9 months = 1.75 years
𝐼 853.12
r= = = 0.065 x 100% = 6.5%
𝑃𝑡 7,500 (1.75)
Thus, the interest rate in 1 year and 9 months is 6.5%.
ASSESSMENT:
1. A six-month ₱4,000 invested for ₱ 930. What was the interest rate?
2. Find the interest rate if ₱12,000 is the maturity value of ₱15,000 which due at the end
of 2 years and 6 months.
3. Romel borrowed a money from his friend worth ₱5,000. After 3 years, the he will pay
P8,500 already. Determine the simple interest rate.

TOPIC 5:
 Finding Time in simple interest
DURATION:
 90 minutes
LEARNING OUTCOME:
 calculate the time period in simple interest
CONCEPT NOTES:
 Definition 5.1
Time is a term frame of investment period. Since interest rate is annual basis, we
denote time as t. The formula is given below.
𝐼
t=
𝑃𝑟
 Example 5.2
Dave took out a ₱7500 loan at 7% and eventually repaid ₱7675. What was the
time period of the loan?
Solution:
I = F – P = ₱7675 – ₱7500 = ₱675
P = ₱7500
r = 7% = 0.07
𝐼 675
t= = = 1.29 years
𝑃𝑟 (7500)(0.07)
Thus, it took 1.29 years to repay the loan.
hhhhhhh
 Example 5.3
How many years will take ₱20,000 to earn ₱6,650 at 9 ½% simple interest?
Solution:
I = ₱6,650
P = ₱20,000

r = 9 ½% = 9.5% = 0.095
𝐼 6,650
t= = = 3.5 years
𝑃𝑟 (20,000)(0.095)
Thus, it will take 3.5 years to take the ₱6,650 interest.
ASSESSMENT:
1. TJ invested ₱4000 in a bond at a yearly rate of 2%. He earned ₱200 in interest. How long
was the money invested?
2. Robert deposits ₱3,000 in State Bank with an interest rate of 4% annually. If he earned
₱1,350 in interest, how long was he received the money?
3. Mr. Santos received a call from a bank to invest his money. An initial deposit of
₱500,000 will get ₱750,000 with an interest rate of 12%. How long Mr. Santos get the
money?

TOPIC 6:
 Finding the exact time and approximate time between two given dates in simple
interest
DURATION:
 90 minutes
LEARNING OUTCOME:
 calculate the exact time and approximate time between two given dates
CONCEPT NOTES:
Usually, the time in simple interest is expressed by yearly or annual basis. For this
topic, the time is based in days which determine whether it is an exact or approximate time.
 Definition 6.1
The computation of exact time is based on the exact number of days in a calendar
years, that is, 365 days. On the other hand, we consider 30 days in a month or 360
days in a year for approximate time.
The formulas are given below:
𝑑
(1) Ie = Pr(365) exact simple interest using exact time
𝑑
(2) Ie = Pr( ) exact simple interest using approximate time
365
𝑑
(3) Io = Pr( ) ordinary simple interest using exact time
360
𝑑
(4) Ie = Pr(360) ordinary simple interest using approximate time
The exact simple interest is used for the specific time stated in the problem while
ordinary simple interest or Bankers Rule is applied whenever a given problem does
not specify the time factor to be used.
 Example 6.2
Find the exact and approximate time from May 1, 1983 to September 15, 1983.

Solution:
The date stated in the problem is started on May 1, 1983. To find the exact
time, we subtract the number of days of a month and the date was started. So,
31 – 1 = 30 days in May. In approximate time, we assume 30 days in a month. We
subtract 30 – 1 = 29 days in May for approximate time. See the computation below:
Exact Time Approximate Time

May 30 May 29
June 30 June 30
July 31 July 30
August 31 August 30
September 15 September 15
137 134
 Example 6.3
If ₱5,000 is invested on May 19 – August 6, 2010 at 6% simple interest. Find
a. exact simple interest using exact time
b. exact simple interest using approximate time
c. ordinary simple interest using exact time
d. ordinary simple interest using approximate time
Solution:
P = ₱5,000
r = 6% = 0.06
Exact Time Approximate Time

May 12 May 11
June 30 June 30
July 31 July 30
August 6 August 6
79 77
t = 79 days for exact time and 77 days for approximate time
𝑑 79
a. Ie = Pr( ) = (₱5,000)(0.06)( ) = ₱64.93
365 365

𝑑 77
b. Ie = Pr( ) = (₱5,000)(0.06)( ) = ₱63.29
365 365
𝑑 79
c. Io = Pr( ) = (₱5,000)(0.06)( ) = ₱65.83
360 36𝑜
𝑑 77
d. Ie = Pr( ) = (₱5,000)(0.06)( ) = ₱64.17
360 360
ASSESSMENT:

1. A man is invested his money worth ₱6,000 from January 12 – March 15, 2010 at 5 ½%
simple interest. Find
a. exact simple interest using exact time
b. exact simple interest using approximate time
c. ordinary simple interest using exact time
d. ordinary simple interest using approximate time
2. Find ordinary interest on ₱12,000 invested from February 16 – June 12, 2010 at 8%
simple interest. Use approximate time.
3. Find the exact interest and the amount on ₱25,000 at 5% for 60 days.

TOPIC 7:
 Finding the simple discount
DURATION:
 90 minutes
LEARNING OUTCOME:
 calculate the simple discount
CONCEPT NOTES:
 Definition 7.1
Discount, denoted by D, is simply a deduction from the maturity value of the loan
and the borrower receives the remaining amount known as proceeds.
The simple discount on the maturity value F, for time t at the discount rate d is
calculated by means of the formula:
D = Fdt
where:
D = simple discount
F = maturity value
d = rate of discount (in percent)
t = time frame (in years)
 Example 7.1
An investor bought a six-month ₱28,000 treasury bill on February 28, 2013
that sold at a discount rate of 13.5%. What is the amount of the discount?
Solution:
First, we must determine the given values from the problem.
F = ₱28,000
r = 13.5% = 0.135
t = 6 month = 0.5 year
hhhhhhh
We will used the simple interest formula, that is,
D = Fdt = (₱28,000)(0.135)(0.5) = ₱1,890

Thus, the investor will have a discount of ₱1,890 in 6 months.

 Example 7.2
Find the simple discount of ₱5,500 at 8% for 8 months?
F = ₱5,500
d = 8% = 0.08
t = 8 months = 2/3 year (If non-terminating decimal, do not round-off the
Instead, use fraction form)
D = Fdt = (₱5,500)(0.08)(2/3) = ₱293.33
Thus, the discount is ₱293.33 after 8 months.
ASSESSMENT:
1. Suppose that ₱12,000 is due at the end of 2 years and 6 month discounted at a rate of
7 ½% simple discount. Find the discount.
2. Mr. Santos wants to purchase a computer unit worth ₱125,000. If he decides to buy the
unit, he will receive a discount at a rate of 10% simple discount. How much he will
receive the discount?
3. Find the simple discount of ₱42,000 if the discount rate is 3% after 4 years.

TOPIC 8:
 Finding proceeds in simple discount
DURATION:
 90 minutes
LEARNING OUTCOME:
 calculate the proceeds in simple discount
CONCEPT NOTES:
 Definition 8.1
The proceeds, denoted by P, is the difference of maturity value (F) and discount (D).
P=F–I (1)
P = F – Fdt
P = F (1 – dt) (2)
 Example 8.2
From the Example 7.2, find the proceeds.
Solution:
F = ₱5,500
D = ₱293.33
P = F – D = ₱5,500 – ₱293.33 = ₱5,206.67
Thus, the proceeds after 6 months is ₱5,206.67.
 Example 8.3
hhhhhhh
A ₱15,000 maturity value note has a term of 4 years. The simple discount rate
is 9 3/8%. Find the proceeds of the note.
Solution:
F = ₱15,000
d = 9 3/8% = 0.09375
t = 4 years

D = Fdt = (₱15,000)(0.09375)(4) = ₱5,625
And,
P = F – D = ₱15,000 – ₱5625 = ₱9,375
Thus, the proceeds of the note in 4 years is ₱9,375.
ASSESSMENT:
1. A 3-month note is discounted by ₱1,200. The simple discount rate is 5 ¾%. Find the
discount and the proceeds of the note.
2. The note is discounted in 2 years with the maturity value of ₱50,300 at discount rate of
7%. Find the proceeds.
3. Find the simple discount if the maturity value is ₱6,000 in 2.65 years at 8% simple
discount. What is the proceeds?

TOPIC 9:
 Finding the maturity value of simple discount
DURATION:
 90 minutes
LEARNING OUTCOME:
 calculate the maturity value in simple discount
CONCEPT NOTES:
 Definition 9.1
The maturity value in simple discount formula is given below:

𝐷
F= (1)
𝑑𝑡
𝑃
F= (2)
1−𝑑𝑡
 Example 9.2
Find the maturity value if he received a discount of ₱540 at 6% in 1 year.
Solution:
D = ₱540
d = 6% = 0.06
t = 1 year
𝐷 540
F= = = ₱9,000
𝑑𝑡 0.06 (1)
Thus, the maturity value is ₱9,000.
hhhhhhh
 Example 9.3
The sound system is available in the store which has a discount rate of 3.5%
within 1 year. If a buyer decides to buy it, he will get a new price of ₱8,750. Find the
original price.

Solution:
P = ₱8750
d = 3.5% = 0.035
t = 1 year
𝑃 ₱8750
F= = = ₱9,067.36
1−𝑑𝑡 1−(0.035)(1)
Thus, the original price of the sound system is ₱9,067.36.
ASSESSMENT:
1. Find the maturity value of a table which is discounted an amount of ₱1,250 in 3 years
at a rate of 7%.
2. Ms. Reyes wants to have a review for her licensure examination. In Pinoy Review
Center, a ₱1,500 discount if she plans to enrol within 9 months at a discount rate of
10%. How much the original bill?
3. Alex wanted to buy a new 2-door refrigerator in a mall. She went to the store and
fortunately, that store had a promo discount within 3 months only. If she bought the 2-
door refrigerator, she got a new price of ₱20,455 at a discount rate of 18%. Find the
original price.

TOPIC 10:
 Finding rate of discount
DURATION:
 90 minutes
LEARNING OUTCOME:
 calculate the rate of discount
CONCEPT NOTES:
 Definition 10.1
An interest rate, denoted by r, is the rate or percent in annual (yearly) basis.

𝐷
d=
𝐹𝑡
 Example 10.1
A nineth-month ₱4,500 Treasury bill sold for ₱3,930. What was the discount
rate?
Solution:
F = ₱4,500
D = ₱4,500 – ₱3,930 = ₱570
𝐷 570
d= = = 0.1689 x 100% = 16.89%
𝐹𝑡 (4,500)(0.75)
Thus, the discount rate is 16.89%.
hhhhhhh
 Example 10.2
A student wants to buy a new android phone worth ₱14,970. If he decides to
buy that phone, he will receive a discount of ₱999 within 6 months. What is the
discount rate of the phone?
Solution:

F = ₱14,970
D = ₱999
𝐷 999
d= = = 0.1345 x 100% = 13.45%
𝐹𝑡 (14,970)(0.5)
Thus, the discount rate of the phone is 13.45%
ASSESSMENT:
1. A ₱100,000 of products discounted an amount of ₱3,500 for 60 days. Find the

discount rate if he buys directly the product. Use ordinary time.
2. Find the rate of discount being given on a shirt whose selling price is ₱1,546 after
deducting a discount of ₱304 on its marked price for 2 years
3. The original price of a sweater is ₱12,960 deducted to ₱916 by a shopkeeper within

6 months. Find the rate of discount given by him.

TOPIC 11:
 Finding time in simple discount
DURATION:
 90 minutes
LEARNING OUTCOME:
 calculate the time period in simple discount
CONCEPT NOTES:
 Definition 11.1
Time is a term frame of discount period. The formula is given below.

𝐷
t=
𝐹𝑑
 Example 11.2
How long the discount was if the amount of ₱6200 is discounted for ₱800 with
a discount rate was 4.5%?
Solution:
D = ₱750
F = ₱6200
r = 4.5% = 0.045
𝐷 800
t= = = 2.87 years
𝐹𝑑 (6200)(0.045)
Thus, it took 2.87 years to have a discount amount of ₱800.
hhhhhhh
 Example 11.3
Find the time of simple discount if a box of bond paper short is ₱775 and
discounted for ₱105 which has discount rate of 7%.
Solution:
D = ₱105
F = ₱775

d = 7% = 0.07
𝐷 105
t= = = 1.94 years
𝐹𝑑 (775)(0.07)
Thus, it will take 1.94 years to take the discount of ₱105.
ASSESSMENT:
1. A ₱80,000 loan has been reduced in ₱1,200 when it was discounted at 9% annual
discount rate. How long in advance was this loan paid off?
2. Cynthia Thomas sign a ₱8500 for a note. A ₱573.75 is discounted at 9%, find the time of
discount.
3. Mike Modigliani needs ₱4,000 to buy a machine. Find the time he needs to pay the
money with a discount of ₱255.32 and bank charges a 12% discount rate.

TOPIC 12:
 Compound Interest
DURATION:
 180 minutes / 3 hours
LEARNING OUTCOME:
 calculate the compound interest
 apply the knowledge of compound interest in real life situations
CONCEPT NOTES:
 Definition 12.1
Consider an investment whose time frame is divided into equal intervals. If an interest
is computed after an interval and is being added to the principal and thereafter earns an
interest, then the difference between the original principal and the total amount after the
whole time frame is called compound interest. The compound amount or the accumulated
value of the principal is the sum of the principal and the compound interest. In this situation,
we see that the interest is being converted into a principal and thus we use the phrase “interest
is compounded” or “interest is converted”.
A compound interest is defined as interest being paid in interest. The accumulated

amount at the end of the period, the original principal and the compound interest, is
called the final amount or maturity value.
F = P (1 + i)n
where:
F = maturity value or final amount
P = initial/principal value
i = rate of interest per conversion period
n = frequency of interest conversion for the whole term
For rate of interest per conversion period:

𝑗
i=
𝑚
where:
j = compound interest rate
m = frequency of interest conversion per year

Interest may be
 m=1 compounded annually
 m=2 semi-annually
 m=4 quarterly
 m = 12 monthly
For frequency of interest conversion per period:
n = mt
where:
t = time or term of transaction
m = frequency of interest conversion per year
 Example 12.1
If ₱100,000 is deposited in a bank that pays interest at 12% compounded
quarterly, what is the maturity value for 3 years?
Solution:
P = ₱100,000
j = 12% = 0.12
t = 3 years
m = 4 (because it is compounded quarterly)
𝑗 0.12
i= = = 0.03
𝑚 4
n = mt = (4)(3) = 12
F = P (1 + i)n = ₱100,000 (1 + 0.03)12 = ₱142,576.09.
Thus, the maturity value after 3 years is ₱142,576.09.
Steps in using the scientific calculator:

1. Add 1 + 0.03.
2. Click equal sign =.
3. Click exponent sign ^ and type 12.
4. Click equal sign = again.

5. Click “x”, that is multiply or times, and type 100,000 and click the equal sign
=.
6. Round off to the nearest hundredths or having two decimal places only. And
you get 142,576.09.
 Example 12.3
Amiel invested ₱210,000 in a time account at 7.5% compounded semi-
annually. How much is the value of the fund if it is withdrawn after 2 years and 3
months?
Solution:
P = ₱210,000
j = 7.5% = 0.075
t = 2 years and 3 months = 2.25 years
m = 2 (because it is compounded semi-annually)
𝑗 0.075
i= = = 0.0375
𝑚 2
n = mt = (2)(2.25) = 4.5
F = P (1 + i)n = ₱210,000 (1 + 0.0375)4.5 = ₱141,621.02.
Thus, the maturity value after 2 years and 3 months is ₱141,621.02.

1. Add 1 + 0.0375.
3. Click exponent sign ^ and type 4.5.
=.
you get 141,621.02.
 Example 12.4
Ms. Alina made a deposit of ₱400,000. The amount was left to accumulate at
10% compounded quarterly for 3 years. Find the maturity value of the deposit at the
end of the 3 years.

Solution:
P = ₱400,000
j = 10% = 0.1
t = 3 years
𝑗 0.1
i= = = 0.025
𝑚 4
n = mt = (4)(3) = 12
F = P (1 + i)n = ₱400,000 (1 + 0.025)12 = ₱537,995.40.
Thus, the maturity value after 3 years is ₱537,995.40.

1. Add 1 + 0.025.
=.
you get 537,995.40.

ASSESSMENT:
1. Aster Atsumi borrowed ₱20,000 at 8% compounded quarterly. How much will she have to
pay at the end of 5 years?
2. Niko owes Andro ₱23,000. Nikko offers to pay the principal and the accumulated at 5.5%
compounded semi-annually at the end of 2 years. How much will Andro receive after 2
years if Nikko agrees to his request?
3. On her birthday, Joan received ₱18,000 from her parents. The amount is deposited in a
bank that pays 12% compounded quarterly, until she reaches 25 years old. What is the
amount of the fund when she reaches 25?

TOPIC 13:
 Finding Present Value of Compound Interest
DURATION:
LEARNING OUTCOME:
 calculate the present value of compound interest
CONCEPT NOTES:
 Definition 13.1
Present value is the current worth of future sums of money. In accounting, this
measures how much money needs to be invested today in order to finance future
business initiatives, projects, and obligations. In order to determine the present value
of future costs, accountants use formulas based on the time value of money.
The process of calculating present value, or discounting, is actually the opposite of
finding the compound future value. The formula is given below:
P = F (1 + i)-n
 Example 13.2
Find the present value of ₱245,000 which is due in 2 years and 9 months with
interest at 8% compounded quarterly.
Solution:
F = ₱245,000
j = 8% = 0.08
𝑗 0.08
i= = = 0.02
𝑚 4
n = mt = (4)(2.75) = 11
P = F (1 + i)-n = ₱245,000 (1 + 0.02)-11 = ₱197,044.44
Thus, the present value in 2 years and 9 months is ₱197,044.44.



1. Add 1 + 0.02.
3. Click exponent sign ^ and type -11.
=.
you get 197,044.44.
 Example 13.3
Discount ₱98,500 for 2 ½ years. Interest rate is at 3% compounded monthly.
Solution:
F = ₱98,500
j = 3% = 0.03
t = 2 ½ years = 2.5 years
m = 12 (because it is compounded monthly)
𝑗 0.03
i= = = 0.0025
𝑚 12
n = mt = (12)(2.5) = 28
P = F (1 + i)-n = ₱98,500 (1 + 0.0375)-28 = ₱91,848.81
Thus, the present value in 2 ½ years is ₱91,848.81.

1. Add 1 + 0.03.
5. Click “x”, that is multiply or times, and type 98,500 and click the equal sign =.
you get 91,848.81

 Example 12.4
In order to accumulate ₱100,000 in 3 years and 6 months, how much should
one invest today at 9% compounded semi-annually?
Solution:
F = ₱100,000
j = 9% = 0.09
𝑗 0.9
i= = = 0.045
𝑚 2
n = mt = (2)(3.75) = 7
P = F (1 + i)-n = ₱100,000 (1 + 0.045)-7 = ₱73,482.85
Thus, the present value in 3 years and 9 months is ₱73,482.85.

1. Add 1 + 0.045.
=.
you get 73,482.85.

ASSESSMENT:
1. What amount should be deposited in a savings account today, in a back paying 11.5%
compounded quarterly, in order to accumulate ₱400,000 in the account 5 years from now?
2. A man 40 years of age wanted to have ₱500,000 when he reached 60. How much must he
invest today 7 ¾% compounded annually?
3. Mr. Ramos has an outstanding loan ₱250,000 which is due in 3 years. If he wishes to pay
off the debt now, how much must he pay if the creditor can reinvest the sum at 3%
compounded monthly?

TOPIC 14:
 Finding Rate at Compound Interest
DURATION:
LEARNING OUTCOME:
 calculate the rate at compound interest
CONCEPT NOTES:
 Definition 14.1
An interest rate is the price borrowers pay for the use of money they do not own.
Interest rates are normally expressed as a percentage rate over the period of time of a
year.
1
𝐹 𝑛
j= m[( ) − 1]
𝑃
 Example 14.2
At what rate compounded semi-annually will ₱50,000 amount to ₱78,000 at
the end of 5 years?
Solution:
F = ₱78,000
P = ₱50,000
t = 5 years
n = mt = (2)(5) = 10
1 1
𝐹 𝑛 78,000 5
j= m[( ) − 1] = 2[( ) − 1] = 9.09%
𝑃 50,000
Thus, the rate of interest is 9.09%.


1. Divide 78,000⁄50,000 .
3. Click exponent sign ^, open parenthesis “(”, type 1, click “a b/c” function,
type 60, and close parenthesis “)”.
5. Click minus sign “–”, then type 1 and click the equal sign =.
6. Multiply by clicking “x” and click 2.
7. Multiply by 100% the answer. And get the answer of 9.09%.
 Example 14.3
The bank granted a ₱350,000 loan to Rico Allen for him to start a small
business. He agreed to repay it ₱420,000 after 2 years and 9 months. At what rate
compounded quarterly is he paying the interest?
Solution:
F = ₱420,000
P = ₱350,000
n = mt = (4)(2.75) = 11
1 1
𝐹 𝑛 420,000 11
j= m[( ) − 1] = 4[( ) − 1] = 6.69%
𝑃 350,000
1. Divide 420,000⁄350,000 .

 Example 14.4
What is the rate of interest compounded monthly ₱60,000 accumulates to
₱90,000 if investment at 5 years.
Solution:
F = ₱90,000
P = ₱60,000
t = 5 years
n = mt = (12)(5) = 60
1 1
𝐹 𝑛 90,000 60
j= m[( ) − 1] = 12[( ) − 1] = 22.17%
𝑃 60,000
1. Divide 90,000⁄60,000 .

ASSESSMENT:
1. Cindy borrows ₱300,000 from a financing company and agrees to pay ₱378,000 at the end
of 1 year and six months. At what rate compounded monthly is she paying the interest?
2. The tuition of Trece Martires Institute per semester last school year amounted to ₱17,800.
This school year it increased to ₱18,200. Find the compounded annual rate in the increase
of fees.
3. A promissory note requires Mr. Alfred Alegre to pay ₱83,500 at the end of 1 year and 3
months. The creditor allows him to pay to liquate the debt by paying ₱78,900 now. Find
the rate compounded quarterly at which the creditor discounted the obligation?

TOPIC 15:
 Finding Time or Term at Compound Interest
DURATION:
LEARNING OUTCOME:
 calculate the time or term at compound interest
CONCEPT NOTES:
 Definition 15.1
The formula of time or term at compound interest is given below:

𝐹
𝑙𝑜𝑔( )
𝑃
t = 𝑚 log(1+𝑖)
 Example 15.2
How long would it take ₱330,000 to earn ₱45,000 at an interest rate of 12%
compounded monthly?
Solution:
F = ₱330,000
P = ₱45,000
j = 12% = 0.12
𝑗 0.12
i= = = 0.01
𝑚 12
𝐹 330,00
𝑙𝑜𝑔(𝑃) 𝑙𝑜𝑔(45,000)
t= = = 1.07 years.
𝑚 log(1+𝑖 ) 12 log(1+0.01)
Thus, it takes 1.07 years to earn the amount of ₱45,000.
1. First, divide 330,000⁄45,000 .



3. Click log sign then equal sign =. Write the answer first.
4. Second, add 1 + 0.01.
6. Click log sign then equal sign = and multiply by 12.
8. Lastly, type your first answer that you calculated divided by the second
answer.
9. Click equal sign =. And you get 1.07 years.
 Example 15.3
Ms. Adela Platon had ₱850,000 on a time deposit, which earns 6.50%
compounded quarterly. She plans to put up a grocery business when the amount will
be 1 million pesos already. How long will the fund available?
Solution:
Solution:
F = ₱1,000,000
P = ₱850,000
j = 6.50% = 0.065
𝑗 0.065
i= = = 0.01625
𝑚 4
𝐹 1,000,00
𝑙𝑜𝑔( ) 𝑙𝑜𝑔( 850,000 )
𝑃
t= = = 2.52 years.
𝑚 log(1+𝑖 ) 4 log(1+0.0165)
Thus, it takes 2.52 years to get the 1 million pesos.
1. First, divide 1,000,000⁄850,000 .

4. Second, add 1 + 0.01625.
answer.

9. Click equal sign =. And you get 2.52 years.
 Example 15.4
Find the time required for ₱135,000 to amount to ₱150,000 at 11%
compounded quarterly.
Solution:
Solution:
F = ₱150,000
P = ₱135,000
j = 11% = 0.11
𝑗 0.11
i= = = 0.0275
𝑚 4
𝐹 150,000
𝑙𝑜𝑔(𝑃) 𝑙𝑜𝑔(135,000)
t= = = 0.97 year
𝑚 log(1+𝑖 ) 4 log(1+0.0275)
Thus, it takes 0.97 year to get the ₱150,000.
1. First, divide 150,000⁄135,000 .

4. Second, add 1 + 0.0275.
answer.
9. Click equal sign =. And you get 0.97 year.

ASSESSMENT:
1. Mr. Santiago receives a loan of ₱230,000 with interest at 8% compounded quarterly. He

promises to settle his obligation when ₱300,000 will be due. When does he pay?
2. Mr. Ramos borrows ₱650,000 agreeing to pay with interest at 11% converted quarterly. In
what time must he pay ₱720,000 to liquidate his debt?
3. A note amounting ₱70,000 today is discounted at 7 ½% compounded semi-annually. If the

proceeds amount to ₱64,500, what is the term of the note.

TOPIC 16:
 Annuity
DURATION:
 90 minutes
LEARNING OUTCOME:
 calculate the final amount and present value of an ordinary annuity
CONCEPT NOTES:
 Definition 16.1
Annuity can be a yearly allowance, regular payments, monthly rentals or regular

income derived from certain investment. It may be also referred to all the payments
made at the specific time and frame or payment interval.
Annuities are classified as annuity certain and contingent annuity. If the term of
the annuity has been stipulated and agreed upon between the policy holder and the
creditor, it is called annuity certain. An example is an educational plan. If the term
depends on some uncertain event, like a life insurance plan, it is a contingent
annuity.
An annuity is considered simple annuity if the payment interval coincides with the
time of interest conversion. Simple annuity is classified into ordinary annuity, whose
payments and deposits are made at the end of each payment interval.
To solve for the final amount and present value of ordinary annuity, we use the
following formulas correspondingly:
(1+𝑖)𝑛 −1 1 − (1+𝑖)−𝑛
So = R [ ] and Ao = R [ ]
𝑖 𝑖
where:
So = sum of the ordinary annuity
Ao = present value
R = regular, periodic payment
n = total number of conversion periods
i = periodic rate

 Example 16.2
Mr. Jose de los Angeles deposits ₱3,500 every end of the month at Philippine
Ordinary Bank (POB) that credits 2.4% monthly for 6 months. How much money
does he have at the end of 6 months?
Solution:
R = ₱3,500
j = 2.4% = 0.024
m = 12 (because it is compounded monthly or every month)
𝑗 0.024
i= = = 0.002
𝑚 12
n = mt = (12)(0.05) = 6
So, the missing term stated in the problem is the final amount of an ordinary
annuity So. We will use the formula, that is,
(1+𝑖)𝑛 −1
So = R [ ]
𝑖
(1+0.002)6−1
So = 3,500 [ ]
0.002
So = ₱21,105.28
Thus, he will receive the money worth ₱21,105.28 after 6 months.

1. Add 1 + 0.002.
5. Click minus sign “–”and divided by 0.002.
6. Multiply by 3,500 and you get the answer of 21,105.28.

 Example 16.3
How much is the cash equivalent of an electronic product which can be
purchased by paying ₱2,500 payable at the end of each quarter for 2 years and
9 months. The money is worth 4.5% compounded quarterly.
Solution:
R = ₱2,500
j = 4.5% = 0.045
m = 12 (because it is compounded monthly or every month)
𝑗 0.024
i= = = 0.002
𝑚 12
n = mt = (12)(0.05) = 6
So, the missing term stated in the problem is the final amount of an ordinary
annuity So. We will use the formula, that is,
(1+𝑖)𝑛 −1
So = R [ ]
𝑖
(1+0.002)6−1
So = 3,500 [ ]
0.002
So = ₱21,105.28
Thus, he will receive the money worth ₱21,105.28 after 6 months.

1. Add 1 + 0.002.
5. Click minus sign “–”and divided by 0.002.
6. Multiply by 3,500 and you get the answer of 21,105.28.

ASSESSMENT:
1. Mr. C.T. Mananaquil an OFW, saves ₱2,500 at the end of each quarter in a bank that
offers 2.5% compounded quarterly for 4 years. How much money will have at the end of
the term?
2. Find the present value of a monthly annuity of ₱1,900 which is payable every end of the
month for 6 years. Money is worth 6% compounded monthly?
3. Mr. Abner Aquino have already started depositing ₱9,000 at the end of each 6 months in a
trust fund that credits 5.5% compounded every 6 months. How much will be in his fund at
the end of 6 years?

TOPIC 17:
 Finding the Regular Payment or Periodic Payment
DURATION:
 90 minutes
LEARNING OUTCOME:
 calculate the finding the regular payment or periodic payment of an ordinary
annuity
CONCEPT NOTES:
 Definition 17.1
In finding the periodic payment in an ordinary annuity, we can use the following
formulas:
𝑆 (𝑖)
𝑜
R = (1+𝑖) 𝑛 periodic payment if the given is sum of an ordinary
−1
annuity
𝐴𝑜 (𝑖)
R= periodic payment if the given is the present value of
1− (1+𝑖)−𝑛
an ordinary annuity
 Example 17.2
How much money must Ms. Bernie Carmona pay every end of the year for
3 years and 6 months in a bank that charges 10% per annum on a commercial loan if
she wanted to avail now on a loan of ₱150,000 for an additional capital in her
retailing business?
Solution:
Ao = ₱150,000
j = 10% = 0.1
m = 1 (because it is compounded annually)
𝑗 0.1
i= = = 0.1
𝑚 1

n = mt = (1)(3.5) = 3.5
𝐴𝑜 (𝑖)
R=
1− (1+𝑖)−𝑛
250,000 (0.1)
R=
1− (1+0.1)−3.5
R = ₱52,882.18
Thus, she deposits ₱52,882.18 every 6 months to avail ₱150,000 after

6.5 years.

1. First, multiply 150,000 and 0.1
2. Click equal sign =. Write the answer first.
3. Second, add 1 + 0.1.
5. Click exponent sign “^” and type –3.5 then equal sign =.
6. Type 1 and click minus sign “–” then click Ans. Click equal sign = again.
answer.
8. Click equal sign =. And you get the final answer of 52,882.18.
 Example 17.3
Mrs. Dolly Bugtong plan to travel abroad with her family. What amount
should she save at the end of each month in a bank that credits 1.44% compounded
monthly for 3 years in order to accumulate the ₱250,000 that she needs for her plan?
Solution:
So = ₱150,000
j = 1.44% = 0.0144
t = 3 years = 3 years
𝑗 0.0144
i= = = 0.0012
𝑚 12
n = mt = (12)(3) = 36

𝑆𝑜 (𝑖)
R=
(1+𝑖)𝑛 − 1
250,000 (0.0012)
R=
(1+0.0012)23 − 1
R = ₱6,799.69
Thus, she deposits ₱6,799.69 per month to get the sum of ₱250,000 after
3 years.

1. First, multiply 250,000 and 0.0012
2. Click equal sign =. Write the answer first.
3. Second, add 1 + 0.0012.
5. Click exponent sign “^” and type 23 then equal sign =.
6. Click minus sign “–” and type 1 then click equal sign = again.
answer.
8. Click equal sign =. And you get the final answer of 6,799.69.

ASSESSMENT:
1. What amount must be deposited every end of the year in an account that credits 1.24%
compounded annually in order to accumulate ₱500,000 at the end of 5 years?
2. Ms. Barretto, a freshman business student, plans to have her open business after
graduation. How much should she save at the end of each month in an investment
company that gives 12% compounded monthly for 4 years if the initial capital of the
business is ₱100,000?
3. A businessman bought a new car that costs ₱1.2 million. Find his monthly payment if the
car company charges 9% compounded monthly for all in-housing financing transactions.

TOPIC 18:
 Amortization
DURATION:
LEARNING OUTCOME:
 calculate the periodic payment, original amount of the oan, and the interest
paid in an amortization problem
 construct the amortization schedule
CONCEPT NOTES:
 Definition 18.1
Amortization is a method of repaying the interest bearing debt by a series of equal

payments at expected time interval. These equal payments form an annuity whose
present value is the original principal of loan. Hence, we use the following annuity
formulas:
1 − (1+𝑖)−𝑛 𝐴 (𝑖)
A= R [ ] and R=
𝑖 1− (1+𝑖)−𝑛
 Example 18.2
Nolram buys a house and lot worth ₱5,500,000 to be paid on a semi-annual
instalment for 5 years with an interest rate of 16%.
a. Find the size of periodic payment.
b. Find the remaining liability just after making the 7 th payment.
c. Construct an amortization schedule.
Solution:
A = ₱5,500,000
j = 16% = 0.16
t = 5 years
m=2
𝑗 0.16
i= = = 0.08
𝑚 2
n = mt = (2)(5) = 10

a. In finding the size of periodic payment, we use the formula
𝐴 (𝑖)
R=
1− (1+𝑖)−𝑛
5,500,000 (0.08)
R=
1− (1+0.08)−10
R = ₱819,662.19
Thus, the regular payment to be paid semi-annual instalment is ₱819,662.19.
b. The remaining liability after the 7th payment is the present value of the
remaining periodic payments.
Regular
Payment
R R R R R R R R R R
Total number of 1 2 3 4 5 6 7 8 9 10
conversion (n)
Since our total number of conversion is n = 10, we find the remaining

liability after 7th payment. So, n = 10 – 7 = 3. Our new n = 3.
Time in years 1 2 3 4 5
Term: 5 years

In this problem, R = ₱819,662.19 and n = 3.

1 − (1+𝑖)−𝑛
A= R [ ]
𝑖
1 − (1+0.08)−3
A = 819,662.19 [ ]
0.08
A = ₱2,112,348.96
Thus, the remaining liability after the 7th payment is ₱2,112,348.96.
c. Construct the amortization schedule
In constructing the amortization schedule, we use this format:
Period Balance Payment Interest Paid Payment for Principal
 Period – the total conversion period n

 Balance – this is the present value per period
 Payment – this is the regular or periodic payment
 Interest Paid – this is the amount where the present value R multiply
by the periodic rate i
 Payment for Principal – this amount where we subtract the Interest
Paid from Payment
In first period, we put ₱5,500,000 as our first balance. The Regular Payment is
solved in (a) and all entries have the same value, that is, R = ₱819,662.19.
1 ₱5,500,000.00 ₱819,662.19
The interest paid is where multiplying the balance, which is R, and interest
paid i =0.08 from the given. So, ₱5,500,000 x 0.08 = ₱440,000.
1 ₱5,500,000.00 ₱819,662.19 ₱440,000.00


To calculate the Payment for Principal, we subtract the interest paid from the
regular payment. That is, ₱819,662.19 – ₱440,000.00 = ₱379,662.19.
1 ₱5,500,000.00 ₱819,662.19 ₱440,000.00 ₱379,662.19
In the second period, we use the calculated value in the first period to fill the
entry for the second period.
1 ₱5,500,000.00 ₱819,662.19 ₱440,000.00 ₱379,662.19
To calculate the balance in second period, subtract the value of payment for
principal from the balance in order to get the answer. That is,
₱5,500,000.00 – ₱379,662.19 = ₱5,120,337.81.
1 ₱5,500,000.00 ₱819,662.19 ₱440,000.00 ₱379,662.19
2 ₱5,120,337.81
The interest paid is where multiplying the balance in the second period, and
interest paid i =0.08 from the given. So,
₱5,120,337.81x 0.08 = ₱409627.02
1 ₱5,500,000.00 ₱819,662.19 ₱440,000.00 ₱379,662.19
2 ₱5,120,337.81 ₱819,662.19 ₱409627.02
Lastly, we subtract the interest paid from the regular payment both in second
period to get the Payment for Principal. That is,
₱819,662.19 – ₱409627.02= ₱410,035.17.

1 ₱5,500,000.00 ₱819,662.19 ₱440,000.00 ₱379,662.19
2 ₱5,120,337.81 ₱819,662.19 ₱409627.02 ₱410,035.17
The same routine of calculation, we get now the amortization schedule.
1 ₱5,500,000.00 ₱819,662.19 ₱440,000.00 ₱379,662.19
2 ₱5,120,337.81 ₱819,662.19 ₱409627.02 ₱410,035.17
3 ₱4, 710,302.64 ₱819,662.19 ₱376,824.21 ₱442,838.69
4 ₱4,267,464.66 ₱819,662.19 ₱341,397.17 ₱478,265.02
5 ₱3,789,199.64 ₱819,662.19 ₱303,135.97 ₱516,526.22
6 ₱3,272,673.42 ₱819,662.19 ₱261,813.87 ₱557,848.32
7 ₱2,714,825.10 ₱819,662.19 ₱217,186.01 ₱602,476.18
8 ₱2,112,348.92 ₱819,662.19 ₱168,987.91 ₱650,674.28
9 ₱1,461,673.64 ₱819,662.19 ₱116,933.91 ₱702,728.21
10 ₱758,946.42 ₱819,662.19 ₱60,715.71 ₱758,946.78
 Example 18.3
A debt of ₱50,000 with interest 12% compounded quarterly must be paid at
the end of every 3 months for 2 years.
b. Find the remaining liability just after making the 6th payment.
Solution:
A = ₱50,000
j = 12% = 0.12
t = 3 years
m=4

𝑗 0.12
i= = = 0.03
𝑚 4
n = mt = (4)(2) = 8
a. In finding the size of periodic payment, we use the formula
𝐴 (𝑖)
R=
1− (1+𝑖)−𝑛
50,000 (0.03)
R=
1− (1+0.03)−8
R = ₱7,122.82
Thus, the regular payment to be paid semi-annual instalment is ₱7,122.82.
b. The remaining liability after the 6th payment is the present value of the
remaining periodic payments.
Regular
Payment
R R R R R R R R
Total number of 1 2 3 4 5 6 7 8
conversion (n)
Since our total number of conversion is n = 8,

we find the remaining liability after 6th payment.
So, n = 8 – 6 = 2. Our new n = 2.
2 in years
Time 1 2
Term: 2 years

In this problem, ₱7,122.82 and n = 2.

1 − (1+𝑖)−𝑛
A= R [ ]
𝑖
1 − (1+0.03)−2
A = ₱7,122.82 [ ]
0.03
A = ₱13,629.30
Thus, the remaining liability after the 6th payment is ₱13,629.30.
c. Construct the amortization schedule
In constructing the amortization schedule, we use this format:

In first period, we put ₱50,000 as our first balance. The Regular Payment is
solved in (a) and all entries have the same value, that is, R = ₱7,122.82.
1 ₱50,000.00 ₱7,122.82
The interest paid is where multiplying the balance, which is R, and interest
paid i =0.03 from the given. So, ₱50,000 x 0.03 = ₱1,500
1 ₱50,000.00 ₱7,122.82 ₱1,500.00
To calculate the Payment for Principal, we subtract the interest paid from the
regular payment. That is, ₱7,122.82 – ₱1,500.00 = ₱5,622.82.
1 ₱50,000.00 ₱7,122.82 ₱1,500.00 ₱5,622.82.


In the second period, we use the calculated value in the first period to fill the
entry for the second period.
1 ₱50,000.00 ₱7,122.82 ₱1,500.00 ₱5,622.82
To calculate the balance in second period, subtract the value of payment for
principal from the balance in order to get the answer. That is,
₱50,000.00 – ₱5,622.82 = ₱44,377.18.
1 ₱50,000.00 ₱7,122.82 ₱1,500.00 ₱5,622.82
2 ₱44,377.18 ₱7,122.82
The interest paid is where multiplying the balance in the second period, and
interest paid i =0.03 from the given. So,
₱44,377.18 x 0.03 = ₱1,331.31.
1 ₱50,000.00 ₱7,122.82 ₱1,500.00 ₱5,622.82
2 ₱44,377.18 ₱7,122.82 ₱1,331.31
Lastly, we subtract the interest paid from the regular payment both in second
period to get the Payment for Principal. That is,
₱₱7,122.82 – ₱₱1,331.31 = ₱5,791.50.
1 ₱50,000.00 ₱7,122.82 ₱1,500.00 ₱5,622.82
2 ₱44,377.18 ₱7,122.82 ₱1,331.31 ₱5,791.50


The same routine of calculation, we get now the amortization schedule.
1 ₱50,000.00 ₱7,122.82 ₱1,500.00 ₱5,622.82
2 ₱44,377.18 ₱7,122.82 ₱1,331.31 ₱5,791.50
3 ₱38,585.68 ₱7,122.82 ₱1,157.57 ₱5,965.25
4 ₱32,620.43 ₱7,122.82 ₱978.61 ₱6,144.21
5 ₱26,476.22 ₱7,122.82 ₱794.29 ₱6,328.53
6 ₱20,147.69 ₱7,122.82 ₱604.43 ₱6,518.39
7 ₱13,639.30 ₱7,122.82 ₱408.88 ₱6,713.94
8 ₱6,915.36 ₱7,122.82 ₱207.43 ₱6,915.36


ASSESSMENT:
1. A loan of ₱50,000 with interest at 12% payable semi-annually is to be amortized by equal

payments at the end of each 6 months for 4 years.
2. A debt of ₱300,000 with 12% compounded quarterly will be settled at the end of each 3
months for 3 years.
3. The cash value of a motorcycle is ₱100,000. Carlos brought the item by instalment He will
settle his obligation with equal payments due at the end of every 3 months for 2 years.
Interest is compounded quarterly at 24%.

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Republic of the Philippines

CITY COLLEGE OF EL SALVADOR

CITY COLLEGE OF EL SALVADOR

COURSE LEARNING OUTCOME:

2. The computational background in investment mathematics.

4. The step by step procedure of the calculations required in solving problems.

5. The impact of investment analyses in business decision-making process.

CITY COLLEGE OF EL SALVADOR

An interest is an amount of money paid in a certain period of time. Interest that is

CITY COLLEGE OF EL SALVADOR

We will used the simple interest formula, that is,

Instructions: Read the questions carefully. Show your complete solution.

CITY COLLEGE OF EL SALVADOR

CITY COLLEGE OF EL SALVADOR

t = 9 months = 0.75 year

I = Prt = (₱20,000)(0.0525)(0.75) = ₱787.50

Moreover, we are calculating the maturity value.

Instructions: Read the questions carefully. Show your complete solution.

CITY COLLEGE OF EL SALVADOR

CITY COLLEGE OF EL SALVADOR

Instructions: Read the questions carefully. Show your complete solution.

CITY COLLEGE OF EL SALVADOR

An interest rate, denoted by r, is the rate or percent in annual (yearly) basis.

CITY COLLEGE OF EL SALVADOR

Instructions: Read the questions carefully. Show your complete solution.

CITY COLLEGE OF EL SALVADOR

CITY COLLEGE OF EL SALVADOR

Thus, it will take 3.5 years to take the ₱6,650 interest.

Instructions: Read the questions carefully. Show your complete solution.

CITY COLLEGE OF EL SALVADOR

CITY COLLEGE OF EL SALVADOR

Exact Time Approximate Time

Exact Time Approximate Time

t = 79 days for exact time and 77 days for approximate time

CITY COLLEGE OF EL SALVADOR

Instructions: Read the questions carefully. Show your complete solution.

CITY COLLEGE OF EL SALVADOR

CITY COLLEGE OF EL SALVADOR

Thus, the investor will have a discount of ₱1,890 in 6 months.

Instructions: Read the questions carefully. Show your complete solution.

CITY COLLEGE OF EL SALVADOR

CITY COLLEGE OF EL SALVADOR

D = Fdt = (₱15,000)(0.09375)(4) = ₱5,625

Instructions: Read the questions carefully. Show your complete solution.

CITY COLLEGE OF EL SALVADOR

The maturity value in simple discount formula is given below:

CITY COLLEGE OF EL SALVADOR

Thus, the original price of the sound system is ₱9,067.36.

Instructions: Read the questions carefully. Show your complete solution.

CITY COLLEGE OF EL SALVADOR

An interest rate, denoted by r, is the rate or percent in annual (yearly) basis.

CITY COLLEGE OF EL SALVADOR

Thus, the discount rate of the phone is 13.45%

Instructions: Read the questions carefully. Show your complete solution.

1. A ₱100,000 of products discounted an amount of ₱3,500 for 60 days. Find the

3. The original price of a sweater is ₱12,960 deducted to ₱916 by a shopkeeper within

CITY COLLEGE OF EL SALVADOR

Time is a term frame of discount period. The formula is given below.

CITY COLLEGE OF EL SALVADOR