GEN MATH M1-10 Flashcards
The amount of a borrower pays for using money
Interest(I)
The amount of money borrowed or deposit
Principal (P)
The interest paid on one unit (peso) of capital (principal)
Rate of Interest (r)
The amount of time allotted for repayment of the principal plus the interest. It is a term in years
Time(t)
The principal amount plus the interest. Also called FUTURE VALUE (FV) or Maturity Value
Amount(A) or Balance
It is an interest the is computed on the principal amount only.
Simple interest
It is an interest computed on the principal and also on the accumulated interest
Compound Interest
What formula is this?
Is = Prt
Simple Interest
What formula is this?
A = P + Pr = P(1+r)
Compound Interest
A = P(1 + rt)
Maturity Value of Simple Interest
A = P(1 + r)^t
Maturity Value of Compound Interest
True or False
Compound Interest is always Greater than simple Interest
True
Guven:
P= 72,500.00
r= 8%
t= 3 years
What is the simple interest and maturity value?
17,400.00 and 89,900.00
Given:
P= 540,500.00
r= 7%
t= 6 years
What is the compound Interest and Maturity Value?
270,644.76 and 811,144.76
It pertains to the interval for compounding
Compounding more than once a year period
Guven:
P=
A=
r= 12%
t= 5 years
Is= 20,000.00
What is the principal amount and the future Value?
33,333.33 and 53,333.33
P= A/(1 + r/k)^Kt
Derived Formula
Principal amount
Compound Amount - Principal =
Compound Interest
A = P(1 + r/k)^Kt
Compound Future Value
True or False
In Simple Interest we can use the triangle thing to easily remember the formula
(Yung I/PRT)
True
r/K is called the periodic rate
True or False
True
Interest based on a 360 day year
Ordinary Interest
Interest based on a 365-day year
Exact Interest
Lourdes wants to save money to
buy the school supplies for the
coming school year, so her sale
products online. Suppose she earn
₱2,500.00 and deposit it into an
account that earns simple interest of
3%. After 5 months, how much is her
money now?
Simple Interest Problem
After 5 months Lourdes has an amount of 2,531.25.00
a sequence of payments made at equal (fixed) intervals or periods of time
Annuity
the time between successive payments
Payment Interval
time between the first payment interval and last payment
interval
Term of an annuity, t
the amount of each payment
Regular or Periodic payment, R
sum of future values of all the payments to be made during the entire term of the annuity.
Amount (Future Value) of an annuity, F
sum of present values of all the payments to be made during the entire term of the annuity.
Present value of an annuity, P
an annuity where the payment interval is the same as the interest period
simple annuity
An annuity where the payment interval is not the same as the
interest period
General annuity
(or Annuity Immediate) A type of annuity in which the payments are made at
the end of each payment interval
Ordinary annuity
A type of annuity in which the payments are made at beginning of each payment interval
Annuity Due
An annuity in which payments begin and end at definite times
Annuity times
An annuity in which the payments extended over an indeterminate length of time
Contingent Annuity
Both Simple and General Annuities cannot be Ordinary or Due.
True or False
False
F = R (𝟏+𝒋)^𝒏 −𝟏
/ 𝒋
Future Value
Simple annuities
P = R 𝟏− (𝟏+𝒋)
^−𝒏/𝒋
Present Value
General annuities
F = R* (𝟏+𝒋)
^𝒏 −𝟏
/𝒋
Future Value
General annuity
P = R * 𝟏− (𝟏+𝒋)^−𝒏
/𝒋
Present Value
Mel started to deposit P1,000 monthly in a fund that pays 6% compounded quarterly. How much will be in the fund after 15 years?
Mel will have P290,076.28 in the fund after 20 years.
a cash flow (payment stream) on a particular date refers to a single amount that is equivalent to the value of the payment stream at that date.
fair market value or economic value
time between the purchase of an annuity and the start of the payments
for the deferred annuity.
Period of Deferral
annuity that does not begin until a given time interval has passed
Deferred Annuity
Stocks and bonds are called ________
Securities
people who purchase stocks and bonds are called __________
Investors
units of equity or ownership in a company
Stocks/ shares
You can be considered a STOCKHOLDER or SHAREHOLDER if
If you buy shares of stocks of a company.
As an owner, the stockholder is
eligible to receive a ________ or a share of the company’s profits
dividend
Stockholders carry a certificate of ownership called
stock certificate
The value of the stock printed in the certificate is called
Per value
Some corporations issue stock
without giving the shares any value. This stock is called
no-par stock.
There are two types of stocks that are usually issued by a company, the
_______ ______ and the ________ ______
preferred stocks and common stocks.
certificates that promise to pay a fixed rate of interest by a corporation or government at the end of certain time.
Bonds
A person who buys a bond is called
Bondholder
Bonds can also be referred to as bills, notes, debt securities or debt
obligations.
Just another info🐢
The amount of money transferred from lender to borrower when bond is first issued.
face value or principal of
the bond
the day by which the borrower must repay the bond’s principal in full
Maturity date
A term for the interest that the bond issuer will return to the purchaser as a percentage of the principal.
Coupon
Bonds have two kinds of values. These are _____ ______ and _______ ______.
par value and market value.
place where stocks are bought and sold.
Stock market
measure of a portion of the stock market.
Stock market index
a licensed financial institution that offers various types of loans and receives deposits
Bank
a sum of money that is borrowed from a lending institution with the promise to pay back with interest over pre-determined period of time.
loans
There are two types of loan namely the business loan and consumer loan.
Info🦉
Is money lent to an individual for personal or family purpose.
CONSUMER LOAN
Types of Consumer Loan
a. Home Loan - is a contract between a borrower and a lender that allows
someone to borrow money to buy a house, apartment, condo, or other livable
property. A home loan is typically paid back over a term of 10, 15 or 30 years.
b. Car Loan - A car loan (also known as an automobile loan, or auto loan) is a
sum of money a consumer borrows in order to purchase a car
c. Personal Loans – a type of loan with no specific purpose. (Ex: credit card,
educational purposes,etc.)
Info🐊 read carefully
money lent specifically for a business purpose. It may be used to start a business or to have a business expansion
BUSINESS LOAN
IDENTIFY IF IT’S CONSUMER LOAN OR BUSINESS LOAN
Mr. Cruz plans to have a bakeshop. He wants to borrow some money from the bank in order for him to buy baking equipment needed to start his bakery
business.
Business loan
IDENTIFY IF IT’S CONSUMER LOAN OR BUSINESS LOAN
For the purchase of an SUV worth P1,100,000.00, the bank requires a
minimum amount of 25% down payment.
Consumer loan
IDENTIFY IF IT’S CONSUMER LOAN OR BUSINESS LOAN
A house and lot has a cash value of P 800,000.00. The bank offers a minimum amount of 20% down payment.
CONSUMER LOAN
IDENTIFY IF IT’S CONSUMER LOAN OR BUSINESS LOAN
Ms. Guting owns a siomai house business. Since her business is doing good, she wants to put another siomai house in the city . She decided to have a loan to establish the new branch of her business.
Business loan
IDENTIFY IF IT’S CONSUMER LOAN OR BUSINESS LOAN
Mr. Santos obtained a condominium unit loan worth P2,500,000.00.
He has a monthly payment of P28,100.00 for 20 years.
Consumer loan
