GEN MATH - BUSINESS MATH Flashcards
interest that is computed on the principal and then added to it
SIMPLE INTEREST
amount paid or earned for the use of money
INTEREST
amount paid or earned for the use of money
INTEREST
3 factors to consider in interest
- rate of interest (r)
- length of time (t)
- principal (P)
is given by the bank or charged by the lender.
Rate of interest (r)
The _____________ for which money is deposited or borrowed.
length of time (t)
The __________ is the sum of money deposited.
PRINCIPAL
person (or institution) who owes the money or avails of the funds from the lender
BORROWER OR DEBTOR
date which money received by the borrower
ORIGIN OR LOAN DATE
total amount of money at the end of the transaction period
FINAL AMOUNT OR MATURITY VALUE OR FUTURE VALUE
interest on a deposit or loan is computed once for the full term of the loan
SIMPLE INTEREST
When earning is added to the principal at regular intervals and the sum becomes a new principal, the interest is said to be _______
COMPOUNDED
The present value of the money is the amount deposited in the current account in order to have a certain target amount in the future. The final amount is called the ___________
COMPOUND AMOUNT
The difference between the compound amount and the original principal is called the __________. The interest may be compounded annually, semi-annually, quarterly or monthly.
Compound interest
is a sequence of equal payments given or received at equal intervals of time
ANNUITY
is the time between successive payments
PAYMENT INTERVAL
Classifications of Annuity
- Simple Annuity
- General Annuity
In ____________, the payment interval is the same as the interest period.
SIMPLE ANNUITY
In ____________, the payment interval is the not the same as the interest period.
GENERAL ANNUITY
Kinds of Simple Annuity
1. ____________ - annuity in which the periodic payment is made at the end of each payment interval
2. ___________- an annuity in which the periodic payment is made at the beginning of each payment interval.
- ORDINARY ANNUITY
- ANNUITY DUE
the total accumulation of the payment (sum of future values of all payments) to be made during the entire term of the annuity.
FUTURE VALUE OF AN ANNUITY
is the principal (sum of present values of all payments) to be made during the entire term of the annuity.
PRESENT VALUE OF AN ANNUITY
is a term that refer to payment received (cash inflows) or payments or deposits made (cash outflows).
CASH FLOW
are visual representation of revenue and spending over a period of time.
CASH FLOW DIAGRAMS
Cash inflow - _______arrow
Cash outflow - ________ arrow
UPWARD
DOWNWARD
The sum of the compound amounts of all regular payments is what we call the __________ while the sum of the “principals” of all the regular payments is _________. The compound amount of the present value is also equal to the future value of the annuity.
FUTURE VALUE
PRESENT VALUE
is an annuity wherein the interest conversion period is unequal or not the same as the payment interval
GENERAL ANNUITY
The latest cellphone sells for Php 5,000 downpayment and Php 900 every end of each quarter for 3 years at the rate of 8% compounded semi-annually. Find the cash equivalent of the cellphone
FUTURE VALUE
The first payment is not made at the beginning nor at the end of the payment interval but at a later date.
DEFERRED ANNUITY
the length of time when these payments are made. In an annuity whose first payment is made at the end of the 7 periods, the annuity is deferred for 6 periods.
PERIOD OF DEFERMENT
Find the value of 10 semi-annual payments of Php 2,000 each if the first payment is due at the end of 3 years and money is worth 8% compounded semi-annually.
PRESENT VALUE
are shares in the ownership of the company.
STOCKS
- share in the company profit.
– earnings distributed to shareholders of a corporation.
DIVIDEND
ratio of the dividends to the number of shares.
DIVIDEND PER SHARE
a place where stocks can be
bought or sold. The stock market
in the Philippines is governed by
the Philippines Stock Exchange (PSE).
STOCK MARKET
the current price of a stock at which it can be sold.
MARKET VALUE
ratio of the annual dividend
per share and the market value per share. Also called Current stock yield
STOCK YIELD RATIO
the per share amount as stated on the company certificate. Unlike market value, it is determined by the company and remains stable over time.
PAR VALUE
can be considered as part owners of the company.
OWNERS OF STOCKS
buying or selling stocks.
TRADING
investors who buy shares of the corporation from the bank.
SHAREHOLDERS OR STOCKHOLDERS
stock issued without a stated value on the certificate.
NO-PAR STOCK
a paper issued to a shareholder which shows on its face the number of shares it represents.
STOCK CERTIFICATE
– stock sold before it is available on a stock exchange.
INITIAL PUBLIC OFFERING (IPO)
Some corporations issue stock without giving the shares any value. That is called
NO-PAR STOCK
interest-bearing security which
promises to pay:
(1) a stated amount of money on the maturity day
(2) regular interest payments called coupons.
BONDS
periodic interest payment that the bondholder receives during the time between purchase date and maturity date; usually received semi-annually
COUPON
– the rate per coupon payment period; denoted by r
COUPON RATE
the price of the bond at purchase time; denoted by P
PRICE OF A BOND
amount payable on the maturity date ; denoted by F
Par value or Face value
fixed period of time (in years) at which the bond is redeemable as stated in the bond certificate; number of years from time of purchase to maturity date.
TERM OF A BOND
present value of all cash inflows to the bondholder.
FAIR PRICE OF A BOND
STOCKS OR BONDS?
A form of equity financing or raising money by allowing investors to be part owners of the company.
STOCKS
STOCKS OR BONDS?
______ prices vary every day.
These prices are reported in various media (newspaper, TV, internet, etc).
STOCKS
STOCKS OR BONDS?
Investors can earn if the stock prices increase, but they can lose money if the stock prices decrease or worse, if the company goes bankrupt.
STOCKS
STOCKS OR BONDS?
Higher risk but with possibility of higher returns
STOCKS
STOCKS OR BONDS?
Can be appropriate if the
investment is for the long term (10 years or more). This can allow investors to wait for stock prices to increase if ever they go low.
STOCKS
STOCKS OR BONDS?
A form of debt financing, or raising money by borrowing from investors
BONDS
STOCKS OR BONDS?
Investors are guaranteed interest payments and a return of their money at the maturity date
BONDS
STOCKS OR BONDS?
Investors still need to consider the borrower’s credit rating. Bonds issued by the government pose less risk than those by companies because the government has guaranteed funding (taxes) from. which it can pay its loans.
BONDS
STOCKS OR BONDS?
Lower risk but lower yield
BONDS
STOCKS OR BONDS?
Can be appropriate for retirees (because of the guaranteed fixed income) or for those who need the money soon (because they cannot afford to take a chance at the stock market)
BONDS
is a measure of a portion of the stock market.
STOCK MARKET INDEX
go to the PSE personally or phone call to registered broker or logging on to a reputable online trading platform.
BUYING OR SELLING STOCKS
is a debt contract entered into by two parties. It is in the form of monetary fund and any tangible object of value maybe an object of loan.
LOAN
TWO TYPES OF LOAN
- SECURED LOAN
- UNSECURED LOAN
for business purpose
BUSINESS LOAN
personal or family use
CONSUMER LOAN
assets used to secure the loan
COLLATERAL
time to pay the entire loan
TIME OF THE LOAN
the process of paying a loan and its interest through series of regular equal payments. A loan to be paid using this scheme is _______
AMORTIZATION
AMORTIZATION LOAN
a loan secured by a collateral that the borrower is obliged to pay at specified terms
MORTGAGE
mortgage on a movable property
CHATTEL MORTGAGE
assets used to secure the loan. It may be a real-state or other investments
COLLATERAL
any remaining debt at a specified time
OUTSTANDING BALANCE
an individual who agrees to payback the loan if the borrower fails to pay the loan on time
GUARANTOR
a payment to an agent or sales person based on the value or quantity of goods bought and sold; broker’s or brokerage fee. It is found by finding the percentage of a sale
COMMISSION
defined as “the science of correct reasoning”
LOGIC
KINDS OF SENTENCES
Simple Sentence
Compound Sentence
Complex Sentence
Compound Complex
classification of sentences
Declaration Sentences
Imperative Sentences
Interrogative Sentences
Exclamatory Sentences
the study of arguments
MATH LOGIC
a sequence of statement of which one is intended as a conclusion and others as premises
ARGUMENT
is a declarative sentence that can be classified as true or false but not both.
PROPOSITION
“2 is an even number”
FALSE
“When will you submit your project”
NOT PROPOSITION
This article is false”
PROPOSITION
“Today is Tuesday”
FALSE
A self contradictory proposition like this is called a
PARADOX
is a declaration sentence that is either true or false but not both. A true proposition has a truth value of “true”, otherwise, its truth value is “false”
PROPOSITION
Oftentimes, a ________ is used to denote a proposition. That is the proposition.
small letter
of a proposition shows all its
possible truth values.
TRUTH TABLE
is a proposition formed from simpler propositions using logical connectors, such as not, and, or, and if-then, or some combination of logical connectors.
COMPOUND PROPOSITION
it it cannot be broken down any further into other component propositions. They connvey one thought with no connecting words
SIMPLE PROPOSITIONS
denoted by ~ is the simplest logical operator.
NEGATION
is denoted by p ꓥ q, read as p and q,
CONJUNCTION
is denoted by p V q
DISJUNCTION
denoted by p → q
CONDITIONAL
is denoted by p ↔ q
BICONDITIONAL
biconditional p ↔ q is true when
the truth values of p and q are the same
Two propositions p and q are logically equivalent, denoted by p
<–> q, if they have the same truth values for all possible truth values of their simple components.
When p is true, its negation ~p is false. On the other hand, when p is false, the negation ~p is true.
Idempotent Law (for conjunction)
The conjunction p ꓥ q is true only when both conjuncts p and q are true.
Idempotent Law (for disjunction)
The disjunction p ꓦ q is false only when both disjuncts p and q are false.
Associative Law (for conjunction)
The conditional p –> q is false only when the proposition p is true, and the conclusion q is false.
Associative Law (for disjunction)
The biconditional p ↔ q is true when the truth values of p and q are the same.
Commutative Law (for conjunction)
Given propositions p and q, the following forms of propositions can be derived from p → q
Commutative Law (for disjunction)
is a compound statement that produces truth always. It is denoted by τ.
TAUTOLOGY
is a statement that is always false. It is denoted by ϕ.
CONTRADICTION
is made up of two parts: the given statement called premises and a conclusion.
ARGUMENT
if the conclusion is true whenever the premises are assumed to be true.
VALID ARGUMENT
if there exist a case where the Whole premise is assumed to be true and result to a false-valued conclusion.
FALLACY
