Final - Ge4

GE 4
LEARNING MODULES
IN MATHEMATICS IN
THE MODERN WORLD
[GE 4]
Mary Jane E. Demitillo

Patrick Joseph N. Secillano
FINALS
GE 4
MODULE 3 : MATHEMATICS OF FINANCE
TOPIC 1 : SIMPLE INTEREST
WRITER : PATRICK JOSEPH N. SECILLANO
OPENING PRAYER – UST-LEGAZPI PRAYER
Lord, in our weakness and vulnerability, bless us with your grace to soar beyond limits. Enlighten our vision
and guide our mission that we may clearly see and fully realize our quest. Keep our passion for the truth
burning and our compassion for humanity bright that we may live truly and lovingly. Keep us in harmony with
the universe that we may be joyfully one with your creation. Yet above and before all, Lord, grant us the grace
to love you with all our mind and soul and with all our heart and strength that we may praise, bless and preach
according to your will. Make us, Legazpi Thomasians, whole as a person and as a community in Your
wondrous Name, this we ask and pray with a happy and grateful memory. Amen.
Subject Matter Specific learning Outcomes

 UST-Legazpi Prayer
 Start and end the online class with a prayer.
 Prayer for Our Country
Class Mode General Instructions
 Enroll in the Google Classroom using the official UST-L email
account.
 Attend to daily scheduled synchronous classes. (OLM only)
 Online Learning Modality  Use the learning materials uploaded in performing the activity.
 Modular Learning Modality  Submit the PDF file or scanned output/modules as directed.
 Answer the Online quizzes, seat works, and etc. (OLM only)
 Messenger Group Account is created for easy dissemination of
information.
MODULE LESSONS AND THEIR CORREPSONDING COVERAGE

LEARNING OUTCOME TIME
LESSON SUBTOPIC
“I should be able to…” ALLOTTED
 Identify and illustrate concepts of business
mathematics.
 Solve problems involving business mathematics.
 Simple
1  Solve for Simple Interest 3 hrs.
Interest
 Calculate the unknown values in simple interest
problems.
 Solve for the maturity value.
PRE-TEST
GE 4
Let’s find out how much you already know about this module. Circle or Highlight the CAPITAL letter
that you think answers the question correctly on the space provided for. Please answer all items. Take
note of the items that you were not able to correctly answer and look for the right answer as you go
through this module.
1. A dollar investment $1,200 is transacted for 5 months at 6%, what is the maturity value?
A. $30 C. $1,230.00
B. $540 D. $1,740.00
2. An amount of P1,000,000 is invested in a financial institution, how long will it take for the
amount to reach P1,001,000 at 2% simple interest rate?
A. 15 days C. 24 days
B. 18 days D. 60 days
3. An amount of P1, 000,000 is invested in a financial institution, at what interest rate will it
earn P1, 000 in 10 months?
A. 1.2% C. 0.0012%
B. 12% D. 0.12%
4. Jerry borrowed $4,000 for 5 years at 6% simple interest rate. How much interest is
that?
A. $800 C. $1,200
B. $1,000 D. $1,500
5. Jenna borrowed $5,000 for 3 years and had to pay $1,350 simple interest at the end
of that time. What rate of interest did she pay?
A. 6% C. 8%
B. 7% D. 9%
STUDY
This module covers topics in financial mathematics particularly interest earned on loans and
investments. The use of scientific calculators or Excel application will be very helpful in working
through the examples and exercises given at the end of every section.
Simple interest is a type of interest that is applied to the amount borrowed or invested for the entire
duration of the loan, without taking any other factors into account, such as past interest (paid or
charged) or any other financial considerations. Simple interest is generally applied to short-term
loans, usually one year or less, that are administered by financial companies. The same applies to
money invested for a similarly short period of time.
INTRODUCTION
Why do you need to know investments, bonds, stocks, interests? Why is there a need to invest your
hard earned money? Whether you just want to save for that phone or tablet that you wanted to buy; or
you’re saving for a gift that you wanted to give to your parent’s birthday; or you as a parent planning
on using your credit card in paying your child’s tuition fee payable in 6 months with 0% interest; all
these reasons why you plan invest or save your money, entails knowing some things about interest rates,
and ideas in investment or finance. Studying the mathematics behind finance and investment.
Having the knowledge in basic concepts in business mathematics or the mathematics of investment may
help you decide whether to use that credit card for a 5% interest compounded monthly or a simple
interest for a period of 6 months. Some topics might shed light on which banks would give
GE 4
a higher interest rate for your savings. As a young couple starting a family, one might plan for their
children’s future by understanding stocks and bonds or fund accumulations. These are but a few reasons
for investing your hard earned money. In this module, we will discuss the concepts of simple interest
and its classifications.
In financial transactions an interest is the
amount paid by a borrower to a lender for the use
of money over a period. Interest that is paid as a
percent of amount borrowed or invested is called
simple interest. Interest is a sum of money
received or paid for the use of someone else’s
money. For commercial institutions like banks,
interest is also paid for the services rendered.
Principal is the original amount borrowed, deposited

or invested. Rate of interest is the percent of the
principal paid per time or period. Time is the number
of years, months or days.” Simple Interest is the
interest earned at the end of the allotted time between
the lender and the borrower. The formula is given
above:
Interest can be viewed as a lender or

a borrower. Sometimes if we are the investor,
we consider the value of our investment after
a given period. In this case we introduce the
concept of future values or accumulated
values or maturity value.
Sometimes the term of investment is
not given in years. The term or time frame
given in certain problems maybe stated in
days or months. In cases where the time is expressed in months it is easy to express it in years. But
when the term/time is given in days we use a time factor such as the following:
1. Origin Date - Date when a loan or investment is made, not included in the counting.
2. Maturity Date - Date when the loan is paid or the investment is terminated, included in the
counting
3. Actual Time - The time of a loan or investment that is obtained by counting the *actual number
of days* between the origin date and the maturity date based on a Julian calendar
4. Approximate Time - Same manner as the actual time but on the assumption that each month
has 30 days.
5. Banker's Rule -. Interest is applied whenever a given problem does not specify the time factor
to be used. Uses 360 days.
6. Exact Simple Interest - Uses 365 days.
RESEARCH (OPTIONAL)
GE 4
Your goal in this section is to develop your understanding in the nature of simple interest,
knowing its classifications and applications.
ACTIVITY 1: LEARNING THROUGH READING

Instructions: Read the article below. Then, complete the statements that follow
Chapter 1: Mathematics of Investment: Simple Interest; pages 1-8 only.
https://francisjosephcampena.weebly.com/uploads/1/7/8/6/17869691/chapter_1_mathe
matics_of_investmen
1. Three things that I significantly learned from the text/pdf
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2. Three things that are still unclear to me
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3. I used to think that
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4. Three questions that I want to ask about the text

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APPLICATION
The simple interest rate is a ratio and is typically expressed as a percentage. It plays an
important role in determining the amount of interest on a loan or investment. The amount of
interest charged or earned depends on three important quantities that we will examine next.
ACTIVITY 2: SIMPLE INTEREST
Instructions: Read and analyze each question carefully, answer the given real-life word problem. Show
your solution based on the given below. Organize and label your work.
A. How many months will it take P15,000 to earn P56.25 at 1.5% simple interest rate?
B. How much was borrowed if a simple interest rate of 2.10% was offered payable in 4 months
with interest of P35.00?
C. What is the simple interest on a P500 loan at 2.5% interest to be paid at the end of 6 months?
D. The loan of P 1, 350 is to be repaid in 1 year at 4.5% simple interest. How much is added to
the loan?
E. How long will P60, 000 accumulate to P62, 430 if the simple interest rate agreed is 1.50%?
F. What is the maturity value of a loan of P 64,000 earning an interest of P 12, 733?
G. Mia Benson invested her summer earnings of P3,000 in a savings account which pays 2.5%
interest. How much will this amount to in 6 months?
H. Mr. Seniro invested P150,000 at 5% for 8 years and another P150,000 at 8% for 5 years.
Which investment will yield higher interest and by how much?
GE 4
ANALYSIS
Your goal in this section is to apply your learning in simple interest in real-life situations.
Instruction: Follow directions per item, the purpose of this task is to exercise your skills in solving for
simple interest in different conditions. Provide a complete solution either hand-written or encoded.
1. Determine the Actual and Approximate number of days in the given origin and maturity dates.
Origin Date Maturity Date Actual Time Approximate Time
A May 22, 1995 July 9, 1995
B January 6, 1997 November 6, 1997
C March 3, 2007 October 11, 2007
D February 4, 1990 November 5, 1992
E March 2, 2005 November 5, 2006
2. Joseph borrowed 𝑃ℎ𝑝 5,000 on November 2, 2015 from Arthemus, which is to be repaid on
May 21, 2016 at 6.2% simple interest per year. Find the amount to be repaid. How much will
the interest be at the repayment date if the following time factors are used?
a. Bankers Rule c. Approximate/360
b. Exact Simple Interest d. Approximate/365
3. How much should Mark pay to Michele if he borrowed Php 10,000 on June 25, 2015 and if the
principal and interest are to be paid on November 18, 2015 at 15% simple interest per year?
Use the following time factors.
a. Bankers Rule c. Approximate/360
b. Exact Simple Interest d. Approximate/365
4. At what simple interest rate will a sum of money double itself in 5 years?
5. If Wendy wants to invest her Php25,000, how many years will it take for her savings to
accumulate to Php 40,000 if she invested her savings to a financial institution that provides a
simple interest rate is 4.5% per year?
6. An amount of P12, 500 is invested at 3.25% simple interest for 3 years. Complete the table
below:
Time Principal Rate Interest Future Value
0
1
2
3
7. What will be the maturity value of P15, 500 if it is borrowed at 10.5% rate for 10 months?
8. How much should Mrs. Dolores invest today in a time deposit with 5.5% interest if she expects
to have P175, 000 for his son’s education at the end of 5 years?
9. Mr. Pascual, an airline owner, decided to invest P2.5 million to fund his department handling
spare parts replacement. How long will it take his investment to accumulate to P3.325 million
if the bank’s interest rate is 5.5%?
10. Use Banker’s Rule to compute the simple interest of P10, 000 investment at 10% simple interest
rate from April 14, 2004 to November 18 of the same year.
GE 4
RUBRICS
EXEMPLARY ACCOMPLISHED BEGINNING
CRITERIA SCORE
5 points 3 points 1 point
Ideas are well effectively communicates Ideas are not
Clarity and
developed and ideas but some portions communicated effectively
Organization of Ideas
explained lack clarity and are confusing
Has major drifts in the
Purpose/Focus Focus is cohesive Focus is clear throughout focus
(lack of focus)
Targeted process
Targeted process skills are
Process Skills skills are well Lack of process skills
occasionally presented.
presented.
Finished ahead of/on
Finished on time, but with Did not finish on time and
Time Management time with complete
incomplete data with incomplete data
data
TOTAL SCORE
CLOSURE: SIMPLE INTEREST
With Not Sure A Little Bit

Confidence Though Confused
LEARNING SKILLS
 Define interest
 Solve problems involving simple interest, i.e., solve for the
principal, rate, time or interest given the other 3 quantities..
 Differentiate ordinary interest and exact time and approximate
time.
 Compute the exact time and approximate time
 Find the ordinary interest and exact interest
CLOSING PRAYER – PRAYER FOR OUR COUNTRY

Almighty God, bless our nation and make it true to the ideals of freedom and justice and brotherhood for all
who make it great. Guard us from war, from fire and wind, from compromise and disease from fear and
confusion. Be close to our president and statesmen; give them vision and courage, as they ponder decisions
affecting peace and the future of the world. Make us more deeply aware of our heritage; realizing not only our
rights but also our duties and responsibilities as citizens. Make this great land and all its people know clearly
Your will, that we may fulfill the destiny ordained for us in the salvation of the nations, and the restoring of all
things in Christ. Amen.
REFERENCES:
 Capitulo, FM, Mathematics of Investment (A simplied approach)
 Cervillon, Carmelita, et al. Mathematics of Investment, a worktext
MODULE 3
GE 4
: MATHEMATICS OF FINANCE
TOPIC 2 : COMPOUND INTEREST

account.
information.

LESSON SUBTOPIC
 Define key terms.
 Calculate the unknown values in compound interest
 Compound problems.
1 3 hrs.
Interest  Solve for compound interest.
 Differentiate simple interest from compound interest.
 Solve for Maturity value
GE 4
PRE-TEST
Let’s find out how much you already know about this module. Circle or Highlight the CAPITAL letter that you
think answers the question correctly on the space provided for. Please answer all items. Take note of the items that
you were not able to correctly answer and look for the right answer as you go through this module.
1. Suppose Kaye inherits P250,000, which she invests today at a rate of return of 9 percent
compounded annually. Who much will Kaye's investment be worth in 25 years?
A. P21,175,224.06 C. P6,250,000.00
B. P2,155,770.17 D. P1,929,687.00
2. What was P1,000 worth forty years ago, if inflation averaged 3.5 percent compounded annually
over this period?
A. P213.55 C. P252.57
B. P3,959.26 D. P1,000.00
3. Hank and Gwen want to retire and buy a cottage for P225,000 in 21 years' time. How much would
they need to invest at the end of each year to achieve this goal at an annually compounded interest
of 4 percent?
A. P7,916.72 C. P7,480.13
B. P7,038.02 D. P7,199.04
4. Suppose you invest P1,000 on January 1, 2008. What will be the value of your investment after four
years and nine months, if the interest rate is 3.5 percent compounded annually?
A. P1,183.61 C. P1,177.52
B. P1,163.19 D. P1,499.02
5. Find the compound interest on a loan of P50,000 at 6% for 6 years compounded semi annually.
A. P71,288.004 C. P21,288.004
B. P96,345.23 D. P46,345.23
STUDY
Compound Interest is the interest earned on previously earned interest added to the
principal. For compound interest, present value will be used instead of principal. Aside
from present value and rate of interest, compound interest will use the following terms:
1. Frequency of conversion (n) – the number of times the interest will be added to the present
value. It may be annually or effective (1), semi – annually (2), quarterly (4), bi – monthly (6),
or monthly (12)
2. Nominal rate (r) – annual interest rate
3. Periodic rate (i) – annual interest rate per frequency of conversion or i = r/n
4. Number of conversions (m) – product of frequency of conversions and time or m = nt
Internet Source: https://www.thecalculatorsite.com/articles/finance/compound-interest-formula.P

GE 4
DIRECT INSTRUCTION: COMPOUND AMOUNT & COMPOUND INTEREST
EXAMPLE: Anthony Villadon plans to invest P100,000 in a business venture. He is offered 6%
compounded semi – annually. How much will he receive at the end of 3 years? And how much interest
is added?
SOLUTION
Step 1: Given Step 3: Solve for Compound Amount
𝑟
P=P100,,000 𝐴 = 𝑃(1 + )𝑛𝑡
𝑛
0.06
r=0.06 𝐴 = 100,000(1 + )(2)(3)
2
t=3 A = P119, 405.23
n=2 Solve for Compound Interest
A=? I=A-P
Step 2: Formula I= 119,405.23 -100,000
𝑟
𝐴 = 𝑃(1 + )𝑛𝑡 I = 19,405.23
𝑛
ANALYSIS
Compound interest, or 'interest on interest', is calculated with the compound interest
formula. The formula for compound interest is P (1 + r/n)^(nt), where P is the initial
principal balance, r is the interest rate, n is the number of times interest is
compounded per time period and t is the number of time periods.
ACTIVITY 1: COMPOUND INTEREST

your solution based on the given below. Organize and label your work on your answer sheets.
A. What is the present value of P65,000 at 11% compounded annually for 4 years?
B. A P 1, 000,000 – trust fund was set up and to be used by an 8 – year old nephew when
he goes to college. In 8 years, how much will the fund be if the investment rate is 7.5%
compounded quarterly?
C. Ryza borrows P 150,000. At what rate compounded bi – monthly will her interest be if
she agrees to pay P10,000 more at the end of 2 years?
D. Find the amount at the end of 5 years if P17,535 is invested at 2.45% compounded
quarterly.
E. If money is worth 6% compounded bi – monthly, find the present value of P 125,700
for 2 years.
F. If the rate is at 1.25% effective, how long will P5,000 become P5,500?
GE 4
CLOSURE: COMPOUND INTEREST
With Not Sure A Little Bit

LEARNING SKILLS
 Define key terms.
 Calculate the unknown values in compound interest problems.
 Solve for compound interest.
 Differentiate simple interest from compound interest.

 Solve for Compound Amount
REFERENCES:
 Aufmann, Richard. et.al. (2018) Mathematical in the modern world (Philippine ed.). RBSI, 856
Nicanor Reyes Sr. St. Sampaloc Manila
 Manululu, Esmeralda et.al. (2020), A course model for Mathematics in the Modern World, RBSI,
856 Nicanor Reyes Sr. St. Sampaloc Manila.
GE 4
MODULE 3 : MATHEMATICS OF FINANCE
TOPIC 3 : INVESTMENT & DEBT
WRITER : MARY JANE E. DEMETILLO

account.
information.

LESSON SUBTOPIC
 Define key terms used in commercial mathematics.
 Identify and illustrate concepts of commercial
1  Stocks, Bonds mathematics. 4 hrs.
 Differentiate stocks and bonds.
 Calculate prices of stocks and bonds.
STUDY - A
GE 4
Stocks indicate ownership, including claims on the assets and earnings, in a company or a
corporation. Stock price is the highest or lowest amount someone is willing to pay for the stocks.
Shares are slightly different from stocks. They are a portion of the ownership of a company or
corporation.
Dividend is the monetary portion of the corporation’s earnings decided by its Board of Directors,
which is a group of individuals elected to represent stockholders in meetings. They decide what
policies to implement for the benefit of the company.
Stockholders can be preferred stockholders or common stockholders. Preferred stockholders have
limited voting rights but receive priorities in claiming a fixed dividend while common stockholders
are the real owners of the company.
Dividend yield is the stock’s dividend as a percentage of the stock price.

𝑎𝑛𝑛𝑢𝑎𝑙 𝑑𝑖𝑣𝑖𝑑𝑒𝑛𝑑 𝑦𝑒𝑎𝑟𝑙𝑦 𝑑𝑖𝑣𝑖𝑑𝑒𝑛𝑑 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒
Dividend yield = 𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑠𝑡𝑜𝑐𝑘 𝑝𝑟𝑖𝑐𝑒 x 100% = x 100%
𝑒𝑎𝑟𝑛𝑖𝑛𝑔𝑠 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒
Dividend payout ratio measures the percentage of net income that is distributed to
shareholders in the form of dividend during the year.
𝑡𝑜𝑡𝑎𝑙 𝑑𝑖𝑣𝑖𝑑𝑒𝑛𝑑𝑠
Dividend payout ratio = x 100%
𝑛𝑒𝑡 𝑖𝑛𝑐𝑜𝑚𝑒
Examples are provided below:

1. Five hundred shares of ABC Incorporation are owned by Reiner. Each share pays P50
in annual dividends. If the current stock price is P550, what is the dividend yield?
𝑷𝒉𝒑𝟓𝟎
Dividend yield = 𝑷𝒉𝒑𝟓𝟓𝟎 = 0.09 x 100% = 9%
2. Sette Co. has a current market price per share of P250. As of last year, it paid P
250,000 in dividends with 1,000 shares outstanding. Find the yield of the dividend.
𝑷𝒉𝒑𝟐𝟓𝟎,𝟎𝟎𝟎
( )
𝟏𝟎𝟎𝟎
Dividend yield = = 100%
𝑷𝒉𝒑𝟐𝟓𝟎
3. Tully’s Bed and Breakfast has several shareholders. It is reflected on her income
statement that she has a net income of P10,000 and issued P3,000 of dividends to her
shareholders during this year. What percent of her net income is paid to her
shareholders?
𝑷𝒉𝒑𝟑,𝟎𝟎𝟎
Dividend payout ratio = 𝑷𝒉𝒑𝟏𝟎,𝟎𝟎𝟎 = 0.30 x 100% = 30%
STUDY - B
GE 4
Stock prices are dependent on the growth of the company. There are two methods to use when the
dividend growth of the company is constant or non – constant. Gordon Growth model is a model for
determining the price of a stock, based on a future a series of dividends that grow at a constant rate.
The Non – constant Growth Stock assumes that growth is expected to change over time. Formulas
are given below:
Gordon Growth Model (Constant):
𝑫𝒐 (𝟏+𝒈)
𝑷𝟎 =
𝒓−𝒈
Where:
Po = stock price at time 0
Do = current dividend
D1 = the next dividend
g = growth rate in dividends
r = the required return on the stock
r>g
Non – constant Growth Stock:
𝑻
𝑫𝒕 𝑫𝑻+𝟏
𝑷𝟎 = ∑ 𝒕
+ (𝟏 + 𝒓)−𝑻
(𝟏 + 𝒓) 𝒓 − 𝒈𝒄
𝒕=𝟏
Where
Po = stock price at time 0
Dt = the expected dividend at time t
T = the number of years of non – constant growth
gc = the long – term constant growth rate in dividends
r = the required return on the stock
gc < r
Examples are provided below:
GE 4
1. Dividends on a stock today are P 50 per share and dividends are projected to grow at
6% per year forever. What is the value of a share of stock if the required rate of return
is 8%?
𝐷𝑜 (1+𝑔) 𝑃ℎ𝑝50 (1+ 0.06)

Po = = = P2,650.00
𝑟−𝑔 0.08−0.06
2. What is the price of share of stock if dividends on a stock today is worth P20 per share?
Dividends are expected to grow at 4% per year, ad infinitum. The required rate of return
is 4.5%.
𝐷𝑜 (1+𝑔) 𝑃ℎ𝑝20 (1+ 0.04)

Po = = = P4,160.00
𝑟−𝑔 0.045−0.04
3. The current dividend on a stock per share is P50. Management is requiring a return rate
of 5%. In the next 5 years, dividends are foreseen to grow at a rate of 8%. On the sixth
year, dividends are growing at 4.5%. Find the value of the stock.
Do= P50
D1 = P50 (1 + 0.08) = P54
D2 = P54 (1 + 0.08) = P58.32
D3 = P58.32 (1 + 0.08) = P62.9856
D4 = P62.9856 (1 + 0.08) = P68.0244
D5 = P68.0244 (1 + 0.08) = P73.4664
D6 = P73.4664 (1 + 0.045) = P76.7724
Then, substituting these in the formula, 𝑔𝑐 = 0.045 and T = 5

𝑇
𝐷𝑡 𝐷𝑇+1
𝑃0 = ∑ 𝑡
+ (1 + 𝑟)−𝑇
(1 + 𝑟) 𝑟 − 𝑔𝑐
𝑡=1
𝐷 𝐷 𝐷 𝐷4 𝐷5 𝐷𝑇+1
1
Po = (1+𝑟) 2 3
1 + (1+𝑟)2 + (1+𝑟)3 + + + (1 + 𝑟)−𝑇
(1+𝑟)4 (1+𝑟)5 𝑟−𝑔𝑐
54 58.32 62.9856 68.0244 73.4664
Po = (1+0.05)1 + (1+0.05)2 + (1+0,05)3 + + +
(1+0.05)4 (1+0.05)5
76.7724
(1 + 0.05)−5
0.05−0.045
= P 12,302.8994
GE 4
4. The dividend per share today costs P20. Investors expect that the economy’s dividend
to grow 10% for the next three years and a constant rate of growth of 5% thereafter. If
the required return rate 6%, what is the stock price?
Do = P20
D1 = P20 (1 + 0.10) = P22
D2 = P22 (1 + 0.10) = P24.2
D3 = P24.2 (1 + 0.10) = P26.62
D4 = P26.62 (1 + 0.05) = P27.951
Then, substituting these in the formula,
𝑇
𝐷𝑡 𝐷𝑇+1
𝑃0 = ∑ 𝑡
+ (1 + 𝑟)−𝑇
(1 + 𝑟) 𝑟 − 𝑔𝑐
𝑡=1
22 24.2 26.62 27.951
Po = (1+0.06)1 + (1+0.06)2 + (1+0.06)3 + (1 + 0.06)−3
(0.06−0.05)
= P 2,411.4632
STUDY - C
Bonds are long term debt instruments that promise a fixed income in the form of interest.
The interest that bonds typically carry is paid semi – annually. The coupon payment is the
interest paid to the bondholder. The formula is as follows:
CP = Fr
Where:
CP – Coupon Payment
F – Face value
r – Coupon rate
The bond price is calculated by obtaining the present value of the bond’s cash flows. The
formula is shown below:
𝒓 −𝒏𝒕
𝑪𝑷 𝟏− (𝟏+ 𝒏) 𝑭
Bo = [ 𝒓 ]+ 𝒓 𝒏𝒕
𝒏 (𝟏+ )
𝒏 𝒏
Where: Bo – Bond price
CP – Coupon payment
r – Coupon rate
F – par or face value
t - Time and n – number of conversion per annum.
GE 4
Examples are shown below:
1. A semi – annual coupon bond has a face value of P25,000. It has a 8% coupon rate
and 5 years remaining until its maturity. If the required rate of return is 5%, find the:
a. Coupon payment:
CP = Fr = (P25,000) (0.08) = P2,000
b. Bond price:
𝑟 −2𝑡
𝐶𝑃 1− (1+ ) 𝐹
2
Bo = [ 𝑟 ]+ 𝑟 2𝑡
2 (1+ 2)
2
0.05 −2(5)
2,000 1− (1+ 2 ) 25,000
= [ 0.05 ]+ 0.05 2(5)
2
2 (1+ 2 )
= P28, 282.02
c. A bond has a face value of P500 at 12%. What is the coupon payment?
CP = Fr (P500) (0.12) = P60

ANALYSIS
The difference between stocks and bonds is that stocks are shares in the ownership
of a business, while bonds are a form of debt that the issuing entity promises to
repay at some point in the future.
ACTIVITY: STOCKS & BONDS

your solution based on the given below. Organize and label your work on the space provided for.
A. A company declares that next year’s dividend will be Php 1 per share. Everyone holding
100 shares will receive Php25 once per quarter. Find the dividend yield.
B. A Php 300 per share dividend was paid by a certain stock. The dividend is estimated to
grow at 4.75% per year until further notice. What is the price of the stock today if the
required return is 8.75%?
C. Referring to the previous problem, what will be the stock price 1 year from today?
D. You purchase a Php 1, 000 coupon bond. The coupon rate on the bond is 4%. What is
the coupon payment?
GE 4
REFERENCES:
CLOSURE: STOCKS, BONDS & DIVIDENDS
LEARNING SKILLS With Not Sure A Little Bit

 Define key terms used in commercial mathematics.
 Identify and illustrate concepts of commercial mathematics.
 Differentiate stocks and bonds.

 Calculate prices of stocks and bonds.
MODULE 3
GE 4
TOPIC 4 : ANNUITIES: SIMPLE ANNUITY

MODULE INTRODUCTION
You use money in everyday life. In order to buy what you need, you do transactions involving money. In the
previous lessons, you learned the methods of solving the value of money under compound and simple interest
environment. You have learned to illustrate and distinguish between simple and compound. You also learned
how to compute for the interest, present value and future value in a simple and compound interest environment.
As well as solve problems involving real life situations of simple and compound interest. In most cases where
house or cars are purchased, a series of payments is needed at certain points in time. Such Transaction is called
ANNUITY.

account.
 Modular Learning  Submit the PDF file or scanned output/modules as directed.
Modality  Answer the Online quizzes, seat works, and etc. (OLM only)
information.

LESSON SUBTOPIC
 Differentiate ordinary annuity, annuity due, deferred
 Simple annuity and perpetuity
1 3 hrs.
Annuity  Solve problems on annuities ie, find the present value
and amount using the different types of annuity.
PRE-TEST
GE 4
Let’s find out how much you already know about this module. Circle or Highlight the letter that you think answers
the question correctly. Please answer all items. Take note of the items that you were not able to correctly answer
and look for the right answer as you go through this module.
1. It is an annuity where the payment interval is the same as the interest period.
a.) Simple Annuity
b.) General Annuity
c.) Annuity Certain
d.) Contingent annuity
2. It is a sequence of payments made at equal (fixed) intervals or periods of time.
a.) Future Value of an annuity
b.) Present Value of an annuity
c.) Annuity
d.) Periodic Payment
3. The sum of future values of all the payments to be made during the entire term of annuity
a.) Annuity
b.) Present Value of an annuity
c.) Future Value of an annuity
4. The sum of all present values of all the payments to be made during the entire term of the
annuity.
a.) Periodic Payment
b.) Time of an Annuity
c.) Future Value of an annuity
d.) Present Value of an annuity
5. Find the future value of an ordinary annuity with a regular payment of P1,000 AT 5% interest
rate compounded quarterly for 3 years.
a.) P12,806.63
b.) P12,860.36
c.) P12,860.63
d.) P12,806.36
6. Find the present value of an ordinary annuity with regular quarterly payments worth P1,000 at
3% annual interest rate compounded quarterly at the end of 4 years.
a.) P15,024.31
b.) P15,204.31
c.) P15,402.31
d.) P15,420.31
7. It is a term that refers to payments received (cash inflow).
a.) General Annuity
b.) General Ordinary Annuity
c.) Cash Flow
d.) Annuity Certain
GE 4
8. It is refers to a single amount that is equivalent to the value of the payment stream that shall
date.
a.) Future Value of a general annuity
b.) Present Value of a general annuity
c.) Fair market value
9. What is the other term for fair market value?
a.) Cash flow
b.) Present Value of a general annuity
c.) Future Value of a general annuity
d.) Economic Value
10. A teacher saves P5,000 every 6 months in the bank that pays 0.25% compounded monthly.
How much will be her savings after 10 years?
a.) P101,197.06
b.) P101,179.06
c.) P101,971.06
d.) P101,791.06
11. It is an annuity that does not begin until a given time interval has passed.
a.) Period of Deferral
b.) Deferred Annuity
c.) Present value of a deferred annuity
d.) Contingent annuity
12. It is a time between the purchase of an annuity and the start of the payments for the deferred
annuity.
a.) Period of deferral
b.) General Ordinary Annuity
c.) Deferred annuity
d.) Present value of a deferred annuity
13. Melvin availed of a loan from a bank that gave him an option to pay P20,000 monthly for 2
years The first payment is due after 4 months. How much is the present value of the loan if the
interest rate is 10% converted monthly?
a.) P422,795.78
b.) P422,759.78
c.) P422,579.78
d.) P422,597.78
14. -15. Annual payments of P2,500 for 24 years that will start 12 years from now. What is the
period of deferral in the deferred annuity?
a.) 12 periods
b.) 10 periods
c.) 11 periods
d.) 13 periods
GE 4
DISCUSSION – ANNUITY
Annuities assume that you put money in the account on a regular schedule (every month, year,
quarter, etc.) and let it sit there earning interest. Compound interest assumes that you put money
in the account once and let it sit there earning interest. Annuity: Many deposits. In most cases where
house or cars are purchased, a series of payments is needed at certain points in time. Such
Transaction is called ANNUITY.
GE 4
GE 4
GE 4
GE 4
GE 4
RESEARCH (OPTIONAL)
Your goal in this section is to make an observation on how annuities are being solved,
knowing the concept of simple and compound interest in our previous sessions, try to
make a comparison on the real-life examples provided in the links below.
ACTIVITY 2A: Learning through Viewing!

Instructions: Watch and observe on the video clip below. Then, complete the statements in three to five
sentences.
 How To Calculate The Future Value of an Ordinary Annuity
 https://www.youtube.com/watch?v=bcuXY8WkjF4
1. Three things that I significantly learned from the video clip

__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
4. Three questions that I want to ask about the video clip
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
ACTIVITY 2B: Learning through Viewing!
sentences.
 Annuities : Annuity Due , Finding Future Value
 https://www.youtube.com/watch?v=joBu9TnFngQ
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
GE 4
ANALYSIS
The future value of an ordinary annuity with regular payments R at a nominal interest rate I
compounded m times a year after t years, while the present value P of an ordinary annuity with
regular payments R at a nominal interest rate I compounded m times a year after t years.
ACTIVITY 1: FUTURE AND PRESENT VALUE OF ANNUITY

1. Mr. Ribaya paid P200, 000 as downpayment for a car. The remaining amount is to be settled
by paying P16, 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?
2. In order to save for her high school graduation, Marie decided to save P200 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?
3. Paolo borrowed P100, 000. He agrees to pay the principal plus interest by paying an equal
amount of money each year for 3 years. What should be his annual payment if interest is 8%
compounded annually?
4. Find the future value of an ordinary annuity with a regular payment of P1,000 at 5%
compounded quarterly for 3 years.
5. Find the present value of an ordinary annuity with regular quarterly payments worth P1,000
at 3% annual interest rate compounded quarterly at the end of 4 years.
ACTION
Periodic payment R can also be solved using the formula for amount Future value F
or Present Value P of an annuity
ACTIVITY 2: SIMPLE ANNUITY
Instructions: Read and analyze the statement carefully, answer the given real-life word problem. Show
A. In a certain account providing an interest rate of r compounded quarterly, P2, 500 is deposited
every end of the quarter. What value of r will make the future value of the account P5, 200 in
six months?
GE 4
CLOSURE: SIMPLE/ORDINARY ANNUITY
LEARNING SKILLS With Not Sure A Little Bit

 Differentiate ordinary annuity, annuity due, deferred annuity
and perpetuity.
 Solve problems on annuities ie, find the present value and
amount using the different types of annuity.
RUBRICS FOR ASSESSMENT

CRITERIA EXCEPTIONAL(4) SATISFACTORY(3) DEVELOPING (2) BEGINNING (1) SCORE
Shows very
Shows some
Reasoning Shows complete and in- Shows nearly done limited
understanding of the
(Understanding of depth understanding of understanding of the understanding of
underlying
mathematical the underlying underlying the underlying
mathematical
concepts) mathematical concepts. mathematical concepts mathematical
concepts
concepts
Proving Presents consistent and Presents logical and Presents logical and Presents illogical
(Identification exemplary logical and valid reasoning, but a valid reasoning, with and invalid
Approach) valid reasoning. few errors. major errors reasoning.
Writing in Math Explanation is Explanation is
Explanation is Explanation is clear, but
(Clarity of ambiguous and difficult to
outstandingly-written missed simple details.
Explanation) misleading. understand
Interdisciplinary
Link to two or more
Integration Link well to at most two Link to one disciplinal Lack of using
disciplinal perspectives
(Integration with disciplinal perspectives. perspective other disciplinal
exceptionally.
other disciplines) perspectives.
TOTAL SCORE

REFERENCES:
 http://pauljorelsantos.weebly.com/uploads/9/2/9/2/92921742/genmathg11_q2_mod7_annuities_ve
rsion2.pdf
MODULE 3
GE 4
TOPIC 5 : GENERAL AND DEFERRED ANNUITIES
MODULE INTRODUCTION
A general annuity is an annuity where the payment intervals are not the same as the interest intervals, 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., while a deferred annuity 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, such as Social Security.
account.
information.

LESSON SUBTOPIC
 General and
annuity and perpetuity.
1 Deferred 4 hrs.
 Solve problems on annuities ie, find the present value
Annuities
PRE-TEST (OPTIONAL)
GE 4
Let’s find out how much you already know about this module. Circle or Highlight the letter that you think answers
the question correctly. Please answer all items. Take note of the items that you were not able to correctly answer
and look for the right answer as you go through this module.
1. Differentiate Simple Annuity and General Annuity?
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
2. What is an Ordinary Annuity?
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
3. What is the formula in finding the future value of an ordinary annuity? Identify
each variable represents.
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
4. What is the formula in finding the present value of an ordinary annuity? Identify
each variable represents.
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
5. What is the periodic payment formula of an annuity?
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
6. Differentiate Deferred Annuity and Period of Deferral.
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
7. What is a Deferred Annuity?
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
8. What is a period of deferral?
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
9. What is the formula in finding the present value of a deferred annuity? Identify
each variable represents
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
10. Draw the time diagram for a deferred annuity.
__________________________________________________________________
__________________________________________________________________
GE 4
RESEARCH (OPTIONAL)
Your goal in this section is to make an observation on how general and deferred
annuities are being solved, knowing the concept of future and present value of
annuities,, try to make a comparison on the real-life examples provided in the links
below.
ACTIVITY 2A: Learning through Viewing!
sentences.
 General Annuity - General Mathematics/Business Math
 https://www.youtube.com/watch?v=DdDZjh4q2Hc

__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
ACTIVITY 2B: Learning through Viewing!
sentences.
 PERIOD OF DEFERRAL & DEFERRED ANNUITY
https://www.youtube.com/watch?v=2-zBey-Ks3k
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
GE 4
DISCUSSION - GENERAL AND DEFERRED ANNUITY
A general annuity is an annuity where the payment intervals are not the same as the
interest intervals, 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., while a deferred annuity 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, such as Social Security.
GE 4
GE 4
GE 4
GE 4
GE 4
ANALYSIS
A deferred annuity 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, such as Social Security.
ACTIVITY 1: DEFERRED ANNUITY
your solution based on the given below. Organize and label your work on the space provided for.
1. Find the present value of a 2-year deferred annuity at 4% interest compounded quarterly
with payments of P1,000 made every quarter for 3 years.
2. 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 as P3,800 payable in 12
months. How much is the cash value of the television set of the interest rate is 12%
convertible monthly?
3. Melvin availed of a loan from a bank that gave him an option to pay P20, 000 monthly
for 2 years. The first payment is due after 4 months. How much is the present value of
the loan if the interest rate is 10% converted monthly?
4. Quarterly payments of 300 for 9 years that will start 1 year from now, What is the period
of deferral in the deferred annuity?
GE 4
ACTION
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.
ACTIVITY 2: GENERAL ANNUITY

Instructions: Read and analyze the statement carefully, answer the given real-life word problem. Show
1. Which Offer has a better Fair Market Value?

Company A offers P150, 000 at the end of 3 years plus P300, 000 at
the end of 5 years. Company B offers P25, 000 at the end of each
quarter for the next 5 years. Assume that money is worth 8%
compounded annually.
COMPANY A COMPANY B
P150,000 at the end of 3 years P25,000 at the end of each
P300,000 at the end of 5 years quarter for 5 years
2. ABC bank pays interest at the rate of 2% compounded quarterly. How

much will Ken have in the bank at the end of 5 years if he deposits
P3, 000 every month?
3. Mrs. Remoto would like to buy a television (TV) set payable for 6 months
starting at the end of the month. How much is the cost of the TV set if her
monthly payment is P3, 000 and interest is 9% compounded semi-annually?
4. Kat received two offers for investments. The first one is P150, 000 every
year for 5 years at 9% compounded annually. The other investment scheme
is P12, 000 per month for 5 years with the same interest rate. Which fair
market value between these offers is preferable?
End
REFERENCES:

GE 4
Aufmann, Richard. et.al. (2018) Mathematical in the modern world (Philippine ed.). RBSI, 856
 http://pauljorelsantos.weebly.com/uploads/9/2/9/2/92921742/genmathg11_q2_mod7_annuities_ve
rsion2.pdf
CLOSURE: GENERAL AND DEFERRED ANNUITIES
With Confidence Not Sure A Little Bit

LEARNING SKILLS Though Confused
 Illustrate general annuities

 Find the future and present values of general annuities
and compute the periodic payment of a general annuity
annuity and perpetuity.
 Solve problems on annuities ie, find the present value
RUBRICS FOR ASSESSMENT

CRITERIA EXCEPTIONAL(4) SATISFACTORY(3) DEVELOPING (2) BEGINNING (1) SCORE
Shows very
Shows some
Reasoning Shows complete and in- Shows nearly done limited
understanding of the
(Understanding of depth understanding of understanding of the understanding of
underlying
mathematical the underlying underlying the underlying
mathematical
concepts) mathematical concepts. mathematical concepts mathematical
concepts
concepts
Proving Presents consistent and Presents logical and Presents logical and Presents illogical
(Identification exemplary logical and valid reasoning, but a valid reasoning, with and invalid
Approach) valid reasoning. few errors. major errors reasoning.
Writing in Math Explanation is Explanation is
Explanation is Explanation is clear, but
(Clarity of ambiguous and difficult to
outstandingly-written missed simple details.
Explanation) misleading. understand
Interdisciplinary
Link to two or more
Integration Link well to at most two Link to one disciplinal Lack of using
disciplinal perspectives
(Integration with disciplinal perspectives. perspective other disciplinal
exceptionally.
other disciplines) perspectives.
TOTAL SCORE
GE 4
FINAL PROJECT
Instructions: Show/Express your thoughts about the relevance of “Mathematics” in the
pandemic world. You have the freedom to express it either hand-written/drawn or audio-visual.
Use the available resources that you have. Directions are given below: “Choose ONE only”
Essay: Write at least a 1,000-word essay about the topic

given. Do it hand-written or encoded, depending on the
availability of resources.
Criteria:
40% - Originality of text
40% - Structure and Organization
20% - Real-life composition
Slogan: Show your artistry / creativity by making a

slogan based on the given topic. (At most 15 words).
Do it hand-made or in any software, depending on
the availability of resources.
Criteria:
40% - Originality of text
20% - Real-life composition
Poster: Show your artistry / creativity by making a

poster based on the given topic. Do it hand-made or in
any software, depending on the availability of
resources.
Criteria:
50% - Originality of artwork
20% - Real-life connection of the topic
Vlog: Show your creativity by making a video (at

most 5 minutes) based on the given topic. (Be mindful
and responsible of the content)
Criteria:
60% - Originality of the video content
20% - Real-life connection of the topic
GE 4
Prepared by:
PATRICK JOSEPH N. SECILLANO, LPT

Faculty, CASE
Noted by:
LALAINE M. VALLADOLID, MOS

Program Chair, Teacher Education
Approved by:
ALVIN A. SARIO, Ph.D.

Dean, CASE

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GE 4

Mary Jane E. Demitillo

OPENING PRAYER – UST-LEGAZPI PRAYER

Subject Matter Specific learning Outcomes

MODULE LESSONS AND THEIR CORREPSONDING COVERAGE

Principal is the original amount borrowed, deposited

Interest can be viewed as a lender or

ACTIVITY 1: LEARNING THROUGH READING

4. Three questions that I want to ask about the text

CLOSURE: SIMPLE INTEREST

With Not Sure A Little Bit

CLOSING PRAYER – PRAYER FOR OUR COUNTRY

OPENING PRAYER – UST-LEGAZPI PRAYER

Subject Matter Specific learning Outcomes

MODULE LESSONS AND THEIR CORREPSONDING COVERAGE

Internet Source: https://www.thecalculatorsite.com/articles/finance/compound-interest-formula.P

ACTIVITY 1: COMPOUND INTEREST

With Not Sure A Little Bit

 Define key terms.

 Calculate the unknown values in compound interest problems.

 Solve for compound interest.

 Differentiate simple interest from compound interest.

CLOSING PRAYER – PRAYER FOR OUR COUNTRY

OPENING PRAYER – UST-LEGAZPI PRAYER

Subject Matter Specific learning Outcomes

MODULE LESSONS AND THEIR CORREPSONDING COVERAGE

Dividend yield is the stock’s dividend as a percentage of the stock price.

Examples are provided below:

Gordon Growth Model (Constant):

𝐷𝑜 (1+𝑔) 𝑃ℎ𝑝50 (1+ 0.06)

𝐷𝑜 (1+𝑔) 𝑃ℎ𝑝20 (1+ 0.04)

Then, substituting these in the formula, 𝑔𝑐 = 0.045 and T = 5

CP = Fr (P500) (0.12) = P60

ACTIVITY: STOCKS & BONDS

CLOSURE: STOCKS, BONDS & DIVIDENDS

LEARNING SKILLS With Not Sure A Little Bit

 Define key terms used in commercial mathematics.

 Identify and illustrate concepts of commercial mathematics.

 Differentiate stocks and bonds.

OPENING PRAYER – UST-LEGAZPI PRAYER

Subject Matter Specific learning Outcomes

MODULE LESSONS AND THEIR CORREPSONDING COVERAGE

ACTIVITY 2A: Learning through Viewing!

1. Three things that I significantly learned from the video clip

ACTIVITY 1: FUTURE AND PRESENT VALUE OF ANNUITY

LEARNING SKILLS With Not Sure A Little Bit

RUBRICS FOR ASSESSMENT

CLOSING PRAYER – PRAYER FOR OUR COUNTRY

OPENING PRAYER – UST-LEGAZPI PRAYER

MODULE LESSONS AND THEIR CORREPSONDING COVERAGE

1. Three things that I significantly learned from the video clip

ACTIVITY 2: GENERAL ANNUITY

1. Which Offer has a better Fair Market Value?

2. ABC bank pays interest at the rate of 2% compounded quarterly. How

CLOSURE: GENERAL AND DEFERRED ANNUITIES

With Confidence Not Sure A Little Bit

 Illustrate general annuities

RUBRICS FOR ASSESSMENT