Simple Annuity

Learner's Module in General Mathematics

Quarter 2 ● Module 3

[Link]

WINNIE C. MARTES
Developer
Department of Education • Cordillera Administrative Region

NAME:________________________ GRADE AND SECTION ____________

TEACHER: ____________________ SCORE ________________________
SENIOR HIGH SCHO Republic of the Philippines
DEPARTMENT OF EDUCATION
Cordillera Administrative Region
SCHOOLS DIVISION OF BAGUIO CITY
No. 82 Military Cut-Off, Baguio City

Published by:
Learning Resource Management and Development System

COPYRIGHT NOTICE
2020

Section 9 of Presidential Decree No. 49 provides:

“No copyright shall subsist in any work of the Government of the Philippines.
However, prior approval of the government agency of office wherein the work is
created shall be necessary for exploitation of such work for profit.”

This material has been developed for the implementation of K-12 Curriculum through
the Curriculum Implementation Division (CID)—Learning Resource Management and
Development System (LRMDS). It can be reproduced for educational purposes and
the source must be acknowledged. Derivatives of the work including creating an
edited version, an enhancement or a supplementary work are permitted provided all
original work is acknowledged and the copyright is attributed. No work may be derived
from this material for commercial purposes and profit.

ii
 PREFACE

This module is a project of the Curriculum Implementation Division (CID)

particularly the Learning Resource Management and Develoment Unit, Department of
Education, Schools Division of Baguio City which is in response to the implementation
of the K to 12 Curriculum.

This Learning Material is a property of the Department of Education-CID,

Schools Division of Baguio City. It aims to improve students’ academic performance
specifically in Mathematics.

Date of Development : September 2020

Resource Location : DepEd Schools Division of Baguio City
Learning Area : Mathematics
Grade Level : 11
Learning Resource Type : Module
Language : English
Quarter/Week : Q2/W3
Learning Competency/Code : illustrates simple and general annuities
(M11GM-IIc-1)
: distinguishes between simple and general
annuities (M11GM-IIc-2)
: finds the future value and present value of both
simple annuities and general annuities
(M11GM-IIc-d-1)

iii
 ACKNOWLEDGEMENT

The developer wishes to thank the Mathematics Department of Magsaysay

National High School for their encouragement to develop this learning material.
Gratitude is also expressed to the school principal Lucia T. Casim for her unending
support in the realization of this task.

Development Team
Author: Winnie C. Martes
Illustrator: Marilyn Degay-Bugatti (Label Icons) / Cherry A. Miranda

School Learning Resources Management Committee

Lucia T. Casim School Principal
Patricia B. Atipen Master Teacher I - Mathematics
Crislyn Joy T. Capan School LR Coordinator

Quality Assurance Team

Francisco C. Copsiyan EPS – Mathematics
Rufina A. Suanding, Ed.D. PSDS – District 9

DIVISION LRMDS STAFF:

PRISCILLA A. DIS-IW CHRISTOPHER DAVID G. OLIVA

Librarian II Project Development Officer II – LRMDS

LOIDA C. MANGANGEY
EPS – LRMDS

CONSULTANTS:

JULIET C. SANNAD, EdD

Chief Education Supervisor – CID

CHRISTOPHER C. BENIGNO
OIC-Asst. Schools Division Superintendent

MARIE CAROLYN B. VERANO, CESO V

Schools Division Superintendent

iv
 TABLE OF CONTENTS

Copyright Notice ..........................................................................................................ii

Preface ....................................................................................................................... iii
Acknowledgement ......................................................................................................iv
Table of Contents ....................................................................................................... v
Title Page……………………………………………………………………………………..1
What I Need to Know………………………………………………………………………..2
What I Know………………………………………………………………………………….3
What's In ……………………………………………………………………………………..4
What’s New ………………………………………………………………………………….5
What Is It .....................................................................................................................5
What’s More .……………………………………………………………………………….12
Activity 1 ............................................................................................................ 12
Assessment 1 .................................................................................................... 12
Activity 2 ............................................................................................................ 12
Assessment 2 .................................................................................................... 12
Activity 3 ........................................................................................................... 12
Assessment 3 .................................................................................................... 12
What I Have Learned………………………………………………………………………12
What I Can Do……………………………………………………………………………...13
Assessment…………………………………………………………………………………13
Additional Activity…………………………………………………………………………..15
Answer Key…………………………………………………………………………….......16
References……………………………………………………………………………........17

v
SENIOR HIGH SCHOOL

Simple Annuity
Learner's Module in General Mathematics
Quarter 2 ● Module 3

[Link]

WINNIE C. MARTES
Developer

Department of Education – Cordillera Administrative Region

 What I Need to Know
Hello learner! This module was prepared and written with you in mind. Its scope is to
equip you with essential knowledge and skills in order for you to understand and explain
concepts on annuities and then apply them in solving real life situations.

While going through this module, you are expected to:

 illustrate simple and general annuities;
 distinguish between simple and general annuities;
 find the future value and present value of a simple annuity.
Note: Always remember to use a separate sheet of paper for you to write your answers on
the different activities presented in this learning module. DO NOT ANSWER here directly.
Now, here is an outline of the different parts of your learning module. The descriptions will
guide you on what to expect on each part of the module.

Icon Label Description

What I need to know This states the learning objectives that you need
to achieve as you study this module.

What I know This is to check what you already know about the
lesson on this module. If you answered all the
questions here correctly, then you may skip
studying this module.
What’s In This connects the current lesson with a topic or
concept necessary to your understanding.

What’s New This introduces the lesson to be tackled through

an activity.

What Is it? This contains a brief discussion of the learning

module lesson. Think of it as the lecture section
of the lesson.

What’s More These are activities to check your understanding

and to apply what you have learned from the
lesson.

What I have Learned This generalizes the essential ideas tackled from
this module.
What I Can Do This is a real life application of what you have
learned.

Post-Assessment This is an evaluation of what you have learned

from this learning material.

Additional Activity This is an activity that will strengthen and fortify

your knowledge about the lesson.

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 What I Know DAY 1

This pre-test will determine your prior knowledge of the topic. If you are able to answer
all the test items correctly, then you may skip studying this learning material and
proceed to the next learning module.
Direction: Choose the letter of the correct answer and write it in your answer sheet.
1. This is a type of annuity where the interest period is the same as the payment
period.
A. simple annuity C. general annuity
B. ordinary annuity D. deferred annuity
2. This is an annuity where the length of payment interval is not the same as the
length of the interest compounding period.
A. simple annuity C. general annuity
B. ordinary annuity D. deferred annuity
3. This is a type of annuity in which the payments are made at the end of each
payment interval.
A. simple annuity C. general annuity
B. ordinary annuity D. deferred annuity
4. This term refers to payments received or payments or deposits made.
A. periodic payment C. cash value
B. present value D. cash flow
5. This is the down payment plus the present value of the balance or installment
payments.
A. periodic payment C. cash value
B. present value D. cash flow
6. It pertains to the sum of the compounded amounts of each payment.
A. periodic payment C. cash value
B. present value D. future value/amount
7. In order to save for his high school graduation, Jose decided to save P500 at the
end of each month. If the bank pays 0.25% compounded monthly, how much will his
money be at the end of 2 years?
A. 14, 507.85.88 C. 12,001.002
B. 12, 028.79 D. 12, 000.75
8. Danny started to deposit 2,000 quarterly in a fund that pays 7.5% compounded
quarterly. How much will be in the fund after 5 years?
A. 47, 000.45 C. 154, 661.12
B. 47, 994.46 D. 154, 661.13
9. Nora wants to know the present value of 5,000-peso annuity payable every quarter
at 5% compounded quarterly. How much is its present value at the end of 6 months?
A. 9,815.58 C. 5,602.5
B. 390,184.42 D.32,000,000
10. A tablet is purchased with a down payment of P2,500 and the balance at 500 per
month for 1 year. What is its cash price if the interest rate is 6% converted monthly?
A. 30,147.91 C. 8, 309.47
B. 13,510.75 D. 4,186.39
3
11. Mr. Salazar pays P300,000 cash and 15,000 monthly for 20 years for a house and
lot. If money is at 8.5% compounded every month, how much is the cash value of the
property?
A. 300, 000 C. 2,028,513.02
B. 1,728,513.02 D. 2,038,513.02
12. A refrigerator is for sale at P16,500 in cash or in terms, P1,500 each month for the
next 12 months. Money is 8% compounded monthly. Which is lower, the cash price or
the present value of the installment terms?
A. the cash price is lower C. the present value is lower
B. the cash price is higher D. the present value is higher
13. Your mother wants to deposit a certain amount semiannually in order to have
P100,000 in 2 years. Suppose money accumulates at 7% compounded every 6
months, how much should she deposit in her account semiannually?
A. 87,143.22 C. 16,618.36
B. 23,725.11 D. 3,050.05
14. Aling Flora borrowed P50,000 payable in 2 years. To repay the loan, she must pay
an amount monthly with an interest rate of 7.5% compounded every month. How much
should she pay monthly?
A. 2,350.97 C. 2,200.97
B. 2,249.98 D. 2,149.98
15. Your father would like to save P500,000 for your college education. How much
should he deposit in a savings account every quarter for 5 years if interest is at 2.5%
compounded quarterly?
A. 3, 767,677.80 C. 3, 125.00
B. 23, 547.99 D. 2,758.88

What’s In

Application of annuities are observed in our daily life. Examples are when you
want to deposit a certain fixed amount for five years for your college education, when
your parents regularly pay for their life insurance in order to avoid financial hardship
during their retirement, or when a company deposits some amount of money

In the previous module, you learned the concepts on simple and compound
interest. Do not forget to refresh yourself of the concepts and formulas because you
will be applying the idea of a compound interest in dealing with annuities.

Now, get ready to learn the basic concepts on simple annuity.

4
 What’s New
In this lesson, you will learn how to solve a simple annuity. Can you solve this problem?

Maria decides to invest her money for future use so she deposits P1,000
monthly at their community cooperative. Her deposits will earn interest at 6%
compounded monthly for 5 years. How much will she have in her account at the end
of 5 years?

What Is It
A. ANNUITY
An annuity is a sequence of equal payments made regularly or periodically
where the interest on each one is compounded . That is why the amount of each
payment is computed using the compound interest formula . Examples are annual
insurance premiums, monthly savings for your college education, or yearly savings
for the purchase of a car 10 years from the current date. These annuities are paid
periodically to meet some future obligation.

The amount of an annuity (future value), 𝑭, is the sum of the compounded

amounts of each payment. The time between each payment is called the payment
interval while the time for the beginning of the term to the end of the last one is called
the term of the annuity, 𝒕. The amount of each payment is referred to as the periodic
payment, 𝑹.

B. TYPES OF ANNUITY

1. By correspondence with interest period

Simple annuity is an annuity for which the interest period is the same as the
payment period. For example, an annuity for which the interest rate is compounded
quarterly and the payments are also made quarterly is a simple annuity.

General annuity is an annuity where the payment interval does not coincide
with the interest conversion period. For example, a plan for which the payment is done
quarterly which earns an interest at 12% compounded monthly is a general annuity.

2. By date of payment
Ordinary annuity is an annuity where the payments are made at the end of
each payment period. An example is an installment plan for a personal electronic
gadget that requires you to pay P500 at the end of every month for 2 years for which
𝑅 = 500, 𝑚 = 12, 𝑡 = 12, 𝑛 = 24. Other examples are monthly telephone bills, monthly
electric bills, and house/ apartment rentals collectible at the end of each month.

5
 Deferred annuity is an annuity where payments are made at the end of each
payment interval, with the first payment made on a later date. Examples are the
monthly payment for a car loan where the first payment is made after 6 months, or
house and lot installments with the first payment done after 1 year.

AMOUNT AND PRESENT VALUE OF AN ORDINARY ANNUITY DAY 2

Given an ordinary annuity, we solve for the amount F, the present value P, and the
periodic payment R. The time diagram for an ordinary annuity is given below.

P F

R R R

The formula for the amount or future value ,F, of an ordinary annuity is given by

(1 + 𝑖)𝑛 − 1
𝐹 = 𝑅[ ]
𝑖

𝑗
where 𝑅 is the periodic payment, 𝑖 is the interest rate per period where 𝑖 = 𝑚 ,
𝑖𝑛 𝑤ℎ𝑖𝑐ℎ 𝑗 = 𝑟𝑎𝑡𝑒 𝑜𝑓 𝑖𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑝𝑒𝑟 𝑦𝑒𝑎𝑟, 𝑚 = 𝑓𝑟𝑒𝑞𝑢𝑒𝑛𝑐𝑦 𝑜𝑓 𝑐𝑜𝑛𝑣𝑒𝑟𝑠𝑖𝑜𝑛 , and 𝑛 is the
total number of payment periods where 𝑛 = 𝑚𝑡, 𝑖𝑛 𝑤ℎ𝑖𝑐ℎ
𝑡 = 𝑙𝑒𝑛𝑔𝑡ℎ 𝑜𝑓 𝑡𝑒𝑟𝑚 𝑖𝑛 𝑦𝑒𝑎𝑟𝑠, 𝑚 = 𝑓𝑟𝑒𝑞𝑢𝑒𝑛𝑐𝑦 𝑜𝑓 𝑐𝑜𝑛𝑣𝑒𝑟𝑠𝑖𝑜𝑛.

A cash flow is a term that refers to payments received (cash inflows) or

payments or deposits made (cash outflows). Cash inflows can be represented
by positive numbers and cash outflows can be represented by negative
numbers.

Example 1: Find the amount of a 2,000 -peso ordinary annuity payable monthly at
5% compounded monthly for 3 months.

3
Given: 𝑅 = 2, 000, 𝑚 = 12, 𝑗 = 0.05, 𝑡 = 12 = 0.25 since 𝑡 is expressed in years
𝑗 0.05
These give us 𝑖 = = = 0.0042, 𝑛 = 𝑚𝑡 = (12)(0.25) = 3.
𝑚 12

Find: amount or future value at the end of the term.

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Solution:

(1) Illustrate the cash flow in a time diagram.

2000 2000 2000

0 1 2 3

(2) Find the future value of all the payments at the end of the term.

2000 2000 2000

0 1 2 3

2000
2000(1 + 0.0042)
2000(1+0.0042)2

(3) Add all the future values obtained from the previous step.
2,000 = 2,000
2,000(1+0.0042) = 2,008.4
2,000(1+0.0042)2 = 2,016.835

6,025.235

Thus, the amount is P6, 025.235.

Alternative Method: Use the formula:

(1+𝑖)𝑛 −1
We have 𝐹 = 𝑅 [ ]
𝑖
1.00423 −1
= 2,000 [ ]
0.0042
= 6, 025.235

Example 2: In order to save for her high school graduation, Sarah decided to save
P300 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?

Given: 𝑅 = 300, 𝑚 = 12, 𝑗 = 0.0025, 𝑡 = 6

𝑗 0.0025
These give us 𝑖 = = = 0.00020833,
𝑚 12
𝑛 = 𝑚𝑡 = (12)(6) = 72 periods

Find: amount or future value at the end of the term.

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Solution:
(1+𝑖)𝑛 −1
𝐹 = 𝑅[ ]
𝑖
(1+ 0.00020833)72 −1
= 300 [ ]
0.00020833
72
(1.00020833) −1
= 300 [ 0.00020833 ]
= 21, 760.53

Hence, Sarah will be able to save 21, 760.53 for her graduation.

To compute for the present value P of an ordinary annuity, use the formula:

1 − (1 + 𝑖)−𝑛
𝑃 = 𝑅[ ]
𝑖

Example 1: You would like to know the present value of a 3,000-peso annuity payable
every month at 9% compounded monthly. How much is its present value at the end of
6 months?

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Given: 𝑅 = 3,000 , 𝑚 = 12, 𝑡 = 12 = 0.5, 𝑗 = 0.09

𝑗 0.09
Solve for 𝑖 𝑎𝑛𝑑 𝑛: 𝑖 = 𝑚 = 12 = 0.0075, 𝑛 = (12)(0.5) = 6

Solution:

(1) Illustrate the cash flow in a time diagram and find the discounted payments of
each period to the beginning of the term. That is, present value of each payment.

3000 3000 3000 3000 3000 3000

0 1 2 3 4 5 6

3000(1.0075)-1

3000(1.0075)-2

3000(1.0075)-3

3000(1.0075)-4

3000(1.0075)-5

3000(1.0075)-6

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(2) Add the discounted payments to get the present value.

3,000(1.0075)-1 = 2,977.667
3,000(1.0075)-2 = 2,955.501
3,000(1.0075)-3 = 2,933.50
3,000(1.0075)-4 = 2,911.663
3,000(1.0075)-5 = 2,889.988
3,000(1.0075)-6 = 2,868.474

17, 536.793

Thus, the present value at the end of 6 months is P17, 536.793.

Alternative Method: Use the formula:

1−(1+𝑖)−𝑛
𝑃 = 𝑅[ ]
𝑖
1−(1+0.0075)−6
= 3,000 [ ]
0.0075

−6
1−1.0075
= 3,000 [ 0.0075
]
= 17, 536.793

Example 2: Suppose Mrs. Ibarra would like to know the present value of her quarterly deposit
of P5,000 when interest is 7% compounded quarterly. How much is the present value of her
savings at the end of 2 years?

Given: 𝑅 = 5,000 , 𝑚 = 4, 𝑡 = 2, 𝑗 = 0.07

𝑗 0.07
Solve for 𝑖 𝑎𝑛𝑑 𝑛: 𝑖 = 𝑚 = = 0.0175, 𝑛 = (4)(2) = 8
4

1−(1+𝑖)−𝑛
Solution: 𝑃 = 𝑅[ ]
𝑖
1−(1+0.0175)−8
= 5,000 [ ]
0.0175
−8
1−(1.0175)
= 5,000 [ 0.0175 ]
= 37, 025.26

Thus, the present value of her savings at the end of 2 years is 37, 025.26.

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 DAY 3

The cash value or cash price equals down payment plus present value of
the balance or installment payments.

Example 1: A smartphone is purchased with a down payment of P5,000 and the

balance at 500 per month for 2 years. What is its cash price if the interest rate is 5%
converted monthly?
Solution:
Given: down payment= 5,000, 𝑅 = 500, 𝑚 = 12, 𝑡 = 2, 𝑗 = 0.05,
𝑛 = 𝑚𝑡 = (12)(2) = 24
𝑗 0.05
𝑖=𝑚= = 0.004
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The time diagram for the installment payment is:

5, 000 500 500 500 ………………. 500

0 1 2 3 ……………. 24

1−(1+𝑖)−𝑛
Using the formula: 𝑃 = 𝑅 [ ]
𝑖
1−(1+0.004)−24
= 500 [ ]
0.004
1−1.004−24
= 500 [ ]
0.004
= 11,420.25

Hence, cash price = Down payment + Present Value

= 5,000 + 11, 420.25 = P16, 420.25
The cash price of the smart phone is P16, 420.25.

Example 2: A house furniture is for sale at P15, 000 in cash or on terms, P1,400 each
month for one year. Money is at 8% compounded monthly. Which is lower, the cash
price or the present value of the installment terms?
Solution:
Cash price: 15,000 𝑅 = 1, 400, 𝑗 = 0.008,
𝑗 0.008
𝑚 = 12 , 𝑖 = 𝑚 = = 0.00066, 𝑡 = 1, 𝑛 = 𝑚𝑡 = (12)(1) = 12
12
1−(1+𝑖)−𝑛
𝑃 = 𝑅[ ]
𝑖
1−(1+0.00066)−12
= 1,400 [ ]
0.00066
1−1.00066−12
= 1,400 [ ]
0.00066
= 16, 728.15

Therefore, buying the house furniture in cash is lower than paying it in

installment term.
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PERIODIC PAYMENT 𝑹 OF AN ORDINARY ANNUITY

Periodic payment 𝑅 can also be solved using either of the two formulas below. The
formula depends on which between 𝐹 and 𝑃 is given:

𝐹𝑖 𝑃𝑖
𝑅= and 𝑅 =
(1+𝑖)𝑛 −1 1−(1+𝑖)−𝑛

Example 1. An ordinary annuity payable quarterly at 10% compounded quarterly for 6

years has a present value of P300,000. How much is the quarterly payment?

Solution: The quarterly payment is 𝑅. We know that 𝑗 = 0.10, 𝑚 = 4, 𝑡 = 6 𝑦𝑟𝑠 ,

𝑗 0.10
𝑃 = 300,000. It follows that 𝑖 = = = 0.025 𝑎𝑛𝑑 𝑛 = 𝑚𝑡 = (4)(6) = 24.
𝑚 4
𝑃𝑖
Since the present value is given, we will use the formula: 𝑅 =
1−(1+𝑖)−𝑛
(300000)(0.025)
Substituting, 𝑅 =
1−(1+0.025)−24

7,500
𝑅=
1−1.025−24

𝑅 = 16, 773.846

Example 2. Jane wants to deposit a certain amount semiannually in order to have

P4.5million in 5 years. Suppose money accumulates at 7% compounded every 6
months, how much should she deposit in her account semiannually?

Solution: This situation asks us to solve for 𝑅 given 𝐹 = 4, 500, 000, 𝑡 = 5,

0.07
𝑗 = 0.07, 𝑎𝑛𝑑 𝑚 = 2. And 𝑖 = 2 = 0.035 𝑎𝑛𝑑 𝑛 = 𝑚𝑡 = (2)(5) = 10.
𝐹𝑖
Since the future value is given, we will use the formula: 𝑅 = .
(1+𝑖)𝑛 −1
(4,500,000)(0.035)
Now, substitute: 𝑅 =
(1+0.035)10 −1
157,500
𝑅=
(1.035)10 −1
𝑅 = 383, 586.155

Thus, Jane needs to deposit P383, 586.155 in her account every 6 months.

11
 What’s More DAY 4

Activity 1: Determine what kind of annuity is described below:

1. Maria borrowed money and she will pay P3,000 at the end of every month for 6
years. The money is compounded by 5% quarterly.
a. simple annuity
b. general annuity
2. Marco will set aside P5,000 at the end of every month and put it on an investment
company where his money will by 3.5% monthly. He will do this for 3 years.
a. simple annuity
b. general annuity
3. Helen has a car loan where her first payment is made after 6 months from the date
of the loan.
a. ordinary annuity
b. deferred annuity
4. Mang Juan purchased a lot through their community cooperative. He decided to
pay 10,000 at the end of every month for 3 years.
a. ordinary annuity
b. deferred annuity

Assessment 1: Enumerate 2 examples of a real life situation of a simple annuity.

Activity 2: Your mother saves P6,000 every six months in a bank that pays 0.25%
compounded semiannually. How much will her savings be after 5 years?

Assessment 2: In your own words, create a sample problem on simple annuity and
write the steps on how to solve it. Include the cash flow as part of the step.

Activity 3
You would like to earn your first million after fifteen years. How much should you save
every month for 15 years if money accumulates at 2.5% compounded monthly?

Assessment 3: You are contemplating whether to buy a desktop computer at 15,000

in cash or on terms, 1,200 each month for 1 year. Money earns 5% compounded
monthly. To arrive at your decision, you compute which is lower, the cash price or the
present value of the installment terms?

12
 What I Have Learned
To check your understanding of the lesson, answer the following:
1. In your own words, describe simple annuity and give at least 3 examples.
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
2. Explain the concept of cash price/ cash value and its advantages and
disadvantages.
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________

What I Can Do
Let’s apply!
Make a time line and your plan of action on how you will invest or save
money for your future in order to save yourself from financial hardship.

Assessment
This assessment aims to measure how much you have learned from this module.
Read and understand each statement before choosing the correct answer.
1. This is a type of annuity where the interest period is the same as the payment
period.
A. simple annuity C. ordinary annuity
B. general annuity D. deferred annuity
2. This is an annuity where the length of payment interval is not the same as the
length of the interest compounding period.
A. simple annuity C. ordinary annuity
B. general annuity D. deferred annuity

13
3. This is a type of annuity in which the payments are made at the end of each
payment interval.
A. simple annuity C. general annuity
B. general annuity D. deferred annuity
4. This term refers to payments received or payments or deposits made.
A. periodic payment C. cash flow
B. present value D. cash value
5. This is the down payment plus the present value of the balance or installment
payments.
A. periodic payment C. cash flow
B. present value D. cash value
6. It pertains to the sum of the compounded amounts of each payment.
A. future value/amount C. cash value
B. present value D. periodic payment
7. In order to save for his high school graduation, Jose decided to save P500 at the
end of each month. If the bank pays 0.25% compounded monthly, how much will his
money be at the end of 2 years?
A. 14, 507.85.88 C. 12,001.002
B. 14, 028.79 D. 12, 028.79
8. Danny started to deposit 2,000 quarterly in a fund that pays 7.5% compounded
quarterly. How much will be in the fund after 5 years?
A. 47, 994.464 C. 154, 661.12
B. 7, 499.45 D. 154, 661.13
9. Nora wants to know the present value of 5,000-peso annuity payable quarterly at
5% compounded quarterly. How much is its present value at the end of 6 months?
A. 390,184.42 C. 9,815.58
B. 32,000,000 D. 5,602.5
10. A tablet is purchased with a down payment of P1,500 and the balance at 350 per
month for 1 year. What is its cash price if the interest rate is 6% converted monthly?
A. 695,813.62 C. 15, 310.75
B. 30,147.91 D. 13,510.75
11. Mr. Salazar pays P300,000 cash and 15,000 monthly for 20 years for a house and
lot. If money is at 8.5% compounded every month, how much is the cash value of the
property?
A. 2,038,513.02 C. 2,028,513.02
B. 2,728,513.02 D. 2, 083, 513.02
12. A refrigerator is for sale at P20,000 in cash or in terms, P1,500 each month for the
next 12 months. Money is 8% compounded monthly. Which is lower, the cash price or
the present value of the installment terms?
A. the cash price is higher C. the present value is lower
B. the cash price is lower D. the present value is higher
13. You mother wants to deposit a certain amount semiannually in order to have
P100,000 in 2 years. Suppose money accumulates at 7% compounded every 6
months, how much should she deposit in her account semiannually?
A. 23,725.11 C. 16,618.36
B. 22, 712.10 D. 3,050.05
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14. Aling Flora borrowed P50,000 payable in 2 years. To repay the loan, she must pay
an amount monthly with an interest rate of 7.5% compounded every month. How much
should she pay monthly?
A. 2,350.97 C. 2,249.98
B. 2, 349.98 D. 2,149.98
15. Your father would like to save P500,000 for your college education. How much
should he deposit in a savings account every quarter for 5 years if interest is at 2.5%
compounded quarterly?
A. 23, 547.99 C. 23, 125.00
B. 23, 457.98 D. 23, 047.99

Additional Activity

Illustrating a cash flow:

1. To help your parents save money for your college education, you decided to save a
part of your allowance and weekly wage from your part-time work. You would like to
know the present value of your money (choose any amount, ex. 2,500-peso annuity)
payable monthly at 0.75% compounded every month. How much is its present value
at the end of 2 years?
Illustrate the cash flow in a time diagram, and then add the discounted payments-DO
NOT USE THE FORMULA.

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WHAT I KNOW: WHAT I CAN DO:
1. a 11. d Answers may vary.
2. c 12. a
3. b 13. b
4. d 14. b ASSESSMENT:
5. c 15. b 1. a
6. d 2. b
7. b 3. c
8. b 4. c
9. a 5. d
10. c 6. a
7. d
WHAT’S MORE 8. a
Activity 1: 9. c
1. b 3. b 10. d
2. a 4. a 11. a
12. b
13. a
Assessment 1: 14. c
Answers may vary. 15. a
Activity 2: 60, 338.63 ADDITIONAL ACTIVITY:
Answers vary
Assessment 2: Answers may vary
Activity 3: 4, 586.01
Assessment 3: The present value of the installment term is 14, 018.07 so it is lower than the cash price.
WHAT I HAVE LEARNED:
Answers may vary.
ANSWER KEY
 REFERENCES

Books:

General Mathematics Learner’s Module. Department of Education, 168-204.

Lim, Yvette et al. Math for Engaged Learning Grade 11 General Mathematics, 19-26.

Cabral, Emmanuel and Sarmiento, Jumela. 2018. General Mathematics, 146-152. Oxford
University Press

Online sources:

[Link]
[Link]

[Link]

[Link]

[Link]

[Link]

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Department of Education - Schools Division of Baguio City
No. 82 Military Cut-off Road, Baguio City
Telefax: 442-4326 / 422-7819
Email Address: depedbaguiocity@[Link]
Social Media: [Link]/DepEdTayoBaguio City

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