GenMath Q2 M2

Senior High School
GENERAL MATHEMATICS
Quarter 2 Module 2
Prepared by:
Engr. Fine Dale B. Lopez
ST. IGNATIUS TECHNICAL COLLEGE, INC.
ZONE 11, NATIONAL HIGHWAY, POBLACION, TAGOLOAN, MISAMIS ORIENTAL
ST. IGNATIUS TECHNICAL COLLEGE INC.
Legal History
TESDA: Technical-Vocational
St. Ignatius Technical College, Inc. with business address at Zone 11, National
Highway, Barangay Poblacion, Tagoloan, Misamis Oriental, a family-owned technical
school for secondary graduates who intend to pursue technical studies on Computer
Technology was granted a juridical personality by the Securities and Exchange
Commission on October 29, 2003 through its Registration No. CN 200322733. The
school started its operation by offering TESDA courses namely: Two Years Diploma in
Computer Technician and Two Years Diploma in Computer Programming. SITC has run
these programs for almost three years before each respective title was changed. In 2007,
TESDA Director General issued a directive that all diploma courses will be delivered
based on the number of hours as determined and prescribed by the technical school
management. Consequently, SITC diploma courses were changed from Diploma in
Computer Technician to Computer Hardware Servicing NC II with 1,800 hours duration
of course delivery. Similarly, Diploma in Computer Programming was changed to
Programming NC IV with 1,800 duration of course delivery. SITC management has
successfully delivered the same computer courses under their new titles until 2011.
Another mandate was released by TESDA Director General in 2011, limiting the
number of hours of delivery of TESDA courses based on TESDA Training Regulations.
With such mandate, Computer Hardware Servicing NC II with 1,800 hours duration of
course delivery was limited to 292 hours only, since that year up to the present. TESDA
did not offer any more Programming NC IV because of some stringent requirements of
the program. SITC continues its operation with only one program being offered to
students.
In 2015, when the demand for Bookkeeping NC III was rising, SITC management
endeavored to apply with TESDA R10 to offer the course and luckily the Tech-Voc agency
on April 23, 2015 granted a Registration No 201510043033, WTR 2436 for Bookkeeping
ST. IGNATIUS TECHNICAL COLLEGE, INC. NOT FOR SALE i

NC III 292 hours duration of course delivery. Since May 2015 up to the present, SITC
continues teaching Bookkeeping NC III to interested students.
DepEd: Senior High School
In July 2015 when the Department of Education (DepEd) encouraged the private
school owners to participate in the delivery of the new program of the basic education
which was the senior high curriculum, SITC management endeavored to apply through
DepEd Central Office. After compliance with all the requirements asked by the education
agency submitted through DepEd regional and provincial offices, the school was granted
a Government Permit No. 230, s. 2015 on December 10, 2015 to operate one Academic
Track: Accountancy, Business and Management (ABM), and a Technical -Vocational
Track: ICT- Computer Hardware Servicing NCII effective SY 2016-2017
During SY 2016-2017, while the delivery of two senior high school tracks were
going on, many parents as well as graduating junior high students kept on requesting
SITC management to offer another academic track which was Humanities and Social
Sciences (HUMSS). Consequently, in March 2017, SITC management endeavored to
apply to offer HUMSS for the next SY 2017-2018. Luckily, on May 8, 2017 DepEd, RO-
X, Government Permit No. SHS-P 076, s. 2017, was granted to the school to operate the
aforementioned academic track effective SY 2017-2018.
Again, owing to the persistent demand of many prospective senior high students
for a Technical-Vocational Livelihood Track on Automotive Servicing, SITC management
endeavored to apply for a new permit to deliver Automotive Servicing NC I & NC II. On
July 19, 2019, a DepEd RO-X, Government Permit SHS P-155, s. 2019 was granted to
the school to operate the aforementioned Tech-Voc Track effective SY 2019-2020.
To date, SITC is delivering four tracks: two academics (ABM and HUMSS) and
two Tech-Voc (ICT and Automotive).
ST. IGNATIUS TECHNICAL COLLEGE, INC. NOT FOR SALE ii

St. Ignatius Technical College, Inc.
Vision, Mission, and Core Values

Vision Statement
St. Ignatius Technical College, Inc. will be a premier private institution in Tagoloan,
Misamis Oriental focusing on a continuing tradition of excellence in a fast-changing world.
Within a conducive and supportive school environment, we provide relevant high–quality
senior high school tracks and technical training and prepare our diverse student body for
future endeavors. As learner-focused education community, SITC maximizes student
learning potential by providing them with specialized knowledge in traditional and
emerging technical areas as well as general knowledge that fosters a life of learning.
Mission Statement
St. Ignatius Technical College, Inc. strives to prepare all students to become
lifelong learners, law-abiding and responsible citizens ready to face the challenges of the
future. In partnership with families, community, government, business, industry, and
educational systems, we will achieve our goals of creating relevant learning opportunities
for students-both inside and outside the classroom – that help them develop the
knowledge, critical thinking skills, and human behavior needed to succeed in a
technologically advanced world; thus, realizing our value proposition of “Real Learning,
Real Job, Real Life.”
Core Values
To fulfil its mission, St. Ignatius Technical College, Inc. is committed to the following
values:
• Excellence – setting high and challenging standards for teaching, learning and
professional leadership, advocate continuous improvement of programs,
processes and services, and encourage a results-oriented organization to ensure
that our students are well positioned for success in career and technical fields, and
college transfer.
ST. IGNATIUS TECHNICAL COLLEGE, INC. NOT FOR SALE iii

• Respect – embracing diversity and individual differences, respecting others’
contributions, and everyone’s right to learn free of interruption.
• Innovation – embracing enthusiastic pursuit of new ideas and responsible risk-
taking attitude.
• Sustainability – valuing the responsible use of resources to achieve balance
among social, economic and environmental practices.
ST. IGNATIUS TECHNICAL COLLEGE, INC. NOT FOR SALE iv

Table of Contents
ST. IGNATIUS TECHNICAL COLLEGE INC. Legal History ............................................... i

St. Ignatius Technical College, Inc. Vision, Mission, and Core Values ...................... iii
1. SIMPLE AND COMPOUND INTERESTS ........................................................................ 5
Quiz 1 ....................................................................................................................................... 13
Application 1 .......................................................................................................................... 14
2. SIMPLE AND GENERAL ANNUITIES ........................................................................... 15

Quiz 2 ....................................................................................................................................... 33
Application 2 .......................................................................................................................... 34
3. AMORTIZATION AND LOANS........................................................................................ 35

Quiz 3 ....................................................................................................................................... 40
Application 3 .......................................................................................................................... 41
4. STOCKS AND BONDS ..................................................................................................... 42

Quiz 4 ....................................................................................................................................... 58
Application 4 .......................................................................................................................... 59
5. PROPOSITIONS, SYMBOLS, AND TRUTH TABLES ............................................... 59

Quiz 5 ....................................................................................................................................... 78
Application 5 .......................................................................................................................... 79
6. CONDITIONAL PROPOSITIONS, TAUTOLOGIES, AND FALLACIES .................. 81

Quiz 6 ....................................................................................................................................... 98
Application 6 .......................................................................................................................... 99
References ............................................................................................................................... 100
ST. IGNATIUS TECHNICAL COLLEGE, INC. NOT FOR SALE v

INTRODUCTION
There is no doubt that the vast majority of people find mathematics dry, dull, boring,
painfully difficult and irrelevant. Unfortunately, there seem to be few people who are really
interested in convincing them otherwise. Most mathematician fail to relate the difficulties
that others have trying to learn the subject, and most schoolteachers know terribly little
about the essence of Mathematics to instill a passion for it in their students. I personally
believe that Mathematics is both aesthetically and tremendously. It has the power to
unravel the nature of the physical world and simultaneously fill you with the same sense
of awe comes from listening to great music or appreciating great art. My hope is that this
small library helps some people see these aspects of math that experts know well but
often close fail to convey to others.
It is important to remember that, in Mathematics, the process of learning something
is usually just as important as the result. Even if, because of calculators, you never
actually have to use long division, the process of understanding how it teaches abstract
thinking and gives important insights into what decimal numbers are.
This course is intended for students taking the subject General Mathematics,
particularly by senior high school learners. The subject is divided into two MODULES for
the sake of home-based delivery of learning instructions. As much as possible, the
module writer tried to refrain from using difficult and highly technical language to let
students partake of the great wealth of ideas disclosed by generations of thinkers.
It is hoped that this work becomes an aid in your journey in understanding yourself,
what it means to be a human being, or what it means to be you.
Module 2 is composed of the following lessons:
ST. IGNATIUS TECHNICAL COLLEGE, INC. NOT FOR SALE 1

• Lesson 1 – Simple and Compound Interests
• Lesson 2 – Simple and General Annuities
• Lesson 3 – Amortization and Loans
• Lesson 4 – Stocks and Bonds
• Lesson 5 – Propositions, Symbols, and Truth Tables
• Lesson 6 – Conditional Propositions, Tautologies, and Fallacies

General Instructions
You are about to start your study on Module 2 for your subject General Mathematics.
Don’t be in a hurry. To get much result from your effort, please observe the following:
1. Select a place in your home that is conducive for learning.
2. Pre-condition yourself before you start reading the lesson.
3. Ensure that you have a scientific calculator at hand always for ready reference
in case you cannot understand a word in the lesson.
4. Shut-off your smart phone and keep it in your closet.
5. Read your lesson at least three times (3X) to ensure you have understood the
concept and ideas presented in the lesson.
6. Take note of some important points as you continue your study.
7. If you think you have digested the lesson very well, you may now take your
activities and quizzes.
8. Do not attempt to copy the answer from your lesson. This is a home study
method. You will learn nothing if you cheat as you are just fooling yourself. Study
honestly.
9. Follow all the instructions stipulated in each activity and quiz.
10. You are graded based on this grading system Written Works 25%,
Performance Task 50%, and Quarterly Exam 25%.
11. Use 1 whole yellow paper for quizzes and long bond paper for activities. Use
back or blue ball pen only.
12. You are only allowed to contact the subject teacher during the subject
schedule. Only relevant topics will be entertained and treated as an official
interaction between you and the teacher. Personal matters are prohibited.
13. The hard copies of your weekly outputs should be placed in the long brown
envelope with plastic cover. Submit it to your subject teachers on the designated
dates.
14. All hard copies of activities, quizzes, including your first quarter test
questionnaire should be filed in a long white folder with plastic cover and fastener.
This will serve as your portfolio and a requirement for this subject and will be
submitted at the end of the First Quarter.

15. Submission dates for your learning outputs are as follows:
WEEK DATE & TIME WEEK DATE & TIME
1 November 14, 2022 1 November 15, 2022

8:00 am – 11:00 am 8:00 am – 11:00 am
8:00 am – 11:00 am 8:00 am – 11:00 am
8:00 am – 11:00 am AS 8:00 am – 11:00 am
ABM 4 December 5, 2022 4 December 6, 2022
8:00 am – 11:00 am 8:00 am – 11:00 am
5 December 12, 2022 5 December 13, 2022
8:00 am – 11:00 am 8:00 am – 11:00 am
6 January 4, 2023 6 January 5, 2023
8:00 am – 11:00 am 8:00 am – 11:00 am
WEEK DATE & TIME WEEK DATE & TIME

8:00 am – 11:00 am 8:00 am – 11:00 am
8:00 am – 11:00 am 8:00 am – 11:00 am
HUMSS 8:00 am – 11:00 am ICT 8:00 am – 11:00 am
8:00 am – 11:00 am 8:00 am – 11:00 am
8:00 am – 11:00 am 8:00 am – 11:00 am
6 January 4, 2023 6 January 5, 2023
8:00 am – 11:00 am 8:00 am – 11:00 am
16. Any question on any part of your lesson(s), just call or text this cell number:
09356521692 – Ma’am Jessa B. Manglay

LESSON 1
1. SIMPLE AND COMPOUND INTERESTS

Learning Competencies:
1. Illustrates simple and compound interests
2. Distinguishes between simple and compound interests
3. Computes interest, maturity value, future value, and present value in simple
interest and compound interest environment
4. Solves problems involving simple and compound interest.
Learning Objectives. At the end of this lesson, the learners are expected to:
1. Illustrate simple and compound interests
2. Distinguish between simple and compound interests
3. Compute interest, maturity value, future value, and present value in simple
interest and compound interest environment
4. Solve problems involving simple and compound interest.
General Instructions
1. Now that you are holding this Module, do the following:
2. Read and follow instructions carefully in each lesson.
3. Take note and record points for clarification.
4. Do the activities to fully understand each lesson.
5. Answer all the given tests and exercises.
6. Use 1 whole yellow paper for the quizzes and long bond paper for activities. Use
black or blue ball pen only.
7. Make sure to indicate your name, section, date of submission, complete name of
the subject teacher, title of the lesson, activity/quiz number in your answer sheets.
8. Enjoy learning!

1.1. Interest Rate and Rate of Return
Interest is the manifestation of the time value of money. Computationally, interest
is the difference between an ending amount of money and the beginning amount. If the
difference is zero or negative, there is no interest. There are always two perspectives to
an amount of interest—interest paid and interest earned. These are illustrated in Figure
1.1. Interest is paid when a person or organization borrowed money (obtained a loan) and
repays a larger amount over time. Interest is earned when a person or organization saved,
invested, or lent money and obtains a return of a larger amount over time. The numerical
values and formulas used are the same for both perspectives, but the interpretations are
different.
Interest paid on borrowed funds (a loan) is determined using the original amount,
also called the principal,
Interest = amount owed now – principal Equation 1.1
When interest paid over a specific time unit is expressed as a percentage of the principal,
the result is called the interest rate.
𝑖𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑎𝑐𝑐𝑟𝑢𝑒𝑑 𝑝𝑒𝑟 𝑡𝑖𝑚𝑒 𝑢𝑛𝑖𝑡 Equation 1.2
𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑟𝑎𝑡𝑒 (%) = × 100%
𝑝𝑟𝑖𝑛𝑐𝑖𝑝𝑎𝑙
The time unit of the rate is called the interest period. By far the most common interest
period used to state an interest rate is 1 year. Shorter time periods can be used, such as
1% per month. Thus, the interest period of the interest rate should always be included. If
only the rate is stated, for example, 8.5%, a 1-year interest period is assumed.
Figure 1.1. (a) Interest paid over time to lender. (b) Interest earned over time by investor.

EXAMPLE 1.1
An employee at St. Ignatius Technical College borrows ₱ 10,000 on May 1 and
must repay a total of ₱ 10,700 exactly 1 year later. Determine the interest amount and
the interest rate paid.
SOLUTION. The perspective here is that of the borrower since ₱10,700 repays a loan.
Apply Equation 1.1 to determine the interest paid.
Interest paid = ₱10,700 – 10,000 = ₱700
Equation 1.2 determines the interest rate paid for 1 year.
₱700
% 𝑖𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑟𝑎𝑡𝑒 = × 100% = 7% 𝑝𝑒𝑟 𝑦𝑒𝑎𝑟
₱10,000
EXAMPLE 1.2
SITC plans to borrow ₱20,000 from a bank for 1 year at 9% interest for new
photocopier. Compute the interest and the total amount due after 1 year.
SOLUTION. Compute the total interest accrued by solving Equation 1.2 for interest
accrued.
Interest = ₱20,000(0.09) = ₱1800
The total amount due is the sum of principal and interest.
Total due = ₱20,000 + 1800 = ₱21,800
The total amount due may also be computed as
Total due = principal(1 + interest rate) = ₱20,000(1.09) = ₱21,800
Later we will use this method to determine future amounts for times longer than one
interest period.
From the perspective of a saver, a lender, or an investor, interest earned (Figure 1.1b)
is the final amount minus the initial amount, or principal.
Interest earned = total amount now – principal Equation 1.3
Interest earned over a specific period is expressed as a percentage of the original amount
and is called rate of return (ROR).

𝑖𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑎𝑐𝑐𝑟𝑢𝑒𝑑 𝑝𝑒𝑟 𝑡𝑖𝑚𝑒 𝑢𝑛𝑖𝑡 Equation 1.4
𝑅𝑎𝑡𝑒 𝑜𝑓 𝑟𝑒𝑡𝑢𝑟𝑛 (%) = × 100%
𝑝𝑟𝑖𝑛𝑐𝑖𝑝𝑎𝑙
The time unit for rate of return is called the interest period, just as for the borrower’s
perspective. Again, the most common period is 1 year.
The term return on investment (ROI) is used equivalently with ROR in different
industries and settings, especially where large capital funds are committed to
engineering-oriented programs.
The numerical values in Equations 1.2 and 1.4 are the same, but the term interest
rate paid is more appropriate for the borrower’s perspective, while the rate of return
earned is better for the investor’s perspective.
EXAMPLE 1.3
(a) Calculate the amount deposited 1 year ago to have ₱1000 now at an interest rate of
5% per year.
(b) Calculate the amount of interest earned during this period.
SOLUTION
(a) The total amount accrued (₱1000) is the sum of the original deposit and the earned
interest.
If 𝑥 is the original deposit,
Total accrued = deposit + deposit(interest rate)
₱1000 = 𝑥 + 𝑥 (0.05) = 𝑥(1 + 0.05) = 1.05𝑥
The original deposit is
1000
𝑥= = ₱952.38
1.05
(b) Apply Equation 1.3 to determine the interest earned.
𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 = ₱1000 − 952.38 = ₱47.62
In Examples 1.1 to 1.3 the interest period was 1 year, and the interest amount was
calculated at the end of one period. When more than one interest period is involved, e.g.,
the amount of interest after 3 years, it is necessary to state whether the interest is accrued

on a simple or compound basis from one period to the next. This topic is covered later in
this lesson.
1.2. Simple and Compound Interest

The terms interest, interest period, and interest rate are useful in calculating equivalent
sums of money for one interest period in the past and one period in the future. However,
for more than one interest period, the terms simple interest and compound interest
become important.
Simple interest is calculated using the principal only, ignoring any interest
accrued in preceding interest periods. The total simple interest over several periods is
computed as
Simple interest = (principal)(interest rate)(number of periods) Equation 1.5
𝐼 = 𝑃𝑟𝑛
where 𝐼 is the amount of interest earned or paid and the interest rate 𝑟 is expressed in
decimal form.
EXAMPLE 1.4
Banco de Oro lent a school ₱5,000,000 to retrofit an environmentally unfriendly
building. The loan is for 3 years at 10% per year simple interest. How much money will
the school repay at the end of 3 years?
SOLUTION. The interest for each of the 3 years is

Interest per year = ₱5,000,000(0.10) = ₱500,000
Total interest for 3 years from Equation 1.5 is
Total interest = ₱5,000,000(3)(0.10) = ₱1,500,000
The amount due after 3 years is

Total due = ₱5,000,000 + 1,500,000 = ₱6,500,000
The interest accrued in the first year and in the second year does not earn interest. The
interest due each year is ₱500,000 calculated only on the ₱5,000,000 loan principal.

In most financial and economic analyses, we use compound interest
calculations. For compound interest, the interest accrued for each interest period is
calculated on the principal plus the total amount of interest accumulated in all
previous periods. Thus, compound interest means interest on top of interest.
Compound interest reflects the effect of the time value of money on the interest
also. Now the interest for one period is calculated as
Compound interest = (principal + all accrued interest)(interest rate) Equation 1.6
In mathematical terms, the interest 𝐼𝑡 for time period 𝑡 may be calculated using the
relation.
𝑗=𝑡−1 Equation 1.7
𝐼𝑡 = (𝑃 + ∑ 𝐼𝑗 ) (𝑖)
𝑗=1
EXAMPLE 1.5
Assume a school borrows ₱5,000,000 at 10% per year compound interest and will
pay the principal and all the interest after 3 years. Compute the annual interest and total
amount due after 3 years. Compare with the previous example that involved simple
interest.
SOLUTION. To include compounding of interest, the annual interest and total owed each
year are calculated by Equation 1.6.
Interest, year 1: 5,000,000(0.10) = ₱500,000
Total due, year 1: 5,000,000 + 500,000 = ₱5,500,000
Interest, year 2: 5,500,000(0.10) = ₱550,000
Total due, year 2: 5,500,000 + 550,000 = ₱6,050,000
Interest, year 3: 6,050,000(0.10) = ₱605,000
Total due, year 3: 6,050,000 + 605,000 = ₱6,655,000.

The repayment plan requires no payment until year 3 when all interest and the principal,
a total of ₱6,655,000, are due. The differences due to compounding are clear. An extra
₱6,655,000 – 6,500,000 = ₱155,000 in interest is due for the compounded interest loan.
Note that while simple interest due each year is constant, the compounded interest
due grows geometrically. Due to this geometric growth of compound interest, the
difference between simple and compound interest accumulation increases rapidly as the
time frame increases. For example, if the loan is for 10 years, not 3, the extra paid for
compounding interest may be calculated to be ₱2,968,712.
A more efficient way to calculate the total amount due after a number of years in
Example 1.5 is to utilize the fact that compound interest increases geometrically. This
allows us to skip the year-by-year computation of interest. In this case, the total amount
due at the end of each year is
Year 1: ₱5,000,000(1.10)1 = ₱5,500,000
Year 2: ₱5,000,000(1.10)2 = ₱6,050,000
Year 3: ₱5,000,000(1.10)3 = ₱6,655,000
This allows future totals owed to be calculated directly without intermediate steps. The
general form of the equation is
Total due after n years, future value = principal(1 + interest rate)n years Equation 1.8
𝐹 = 𝑃(1 + 𝑟)𝑛
where 𝑟 is expressed in decimal form. Equation 1.8 was applied above to obtain the
₱6,655,000 due after 3 years. This fundamental relation will be used many times in the
upcoming lessons.
EXAMPLE 1.6
Find the compound amount on deposit at the end of 1 year if ₱20,000.00 is
deposited at 4% compounded (a) annually and (b) semi-annually.
SOLUTION.
(a) Using Equation 1.8 where P = ₱20,000.00, r = 4% or 0.04, and t = 1, we have
𝐹 = 20,000(1 + 0.04)1 = ₱20,800.00
(b) A rate of 4% per year compounded semi-annually means a rate of 2% per half year.
The period (interval for compounding) is 6 months. There are two periods per year: the
𝑟
rate is 2 per period, and the number of periods in 𝑛 years is 2𝑛. Thus, if the interest is
compounded semi-annually for 𝑛 years, the amount 𝐹 is

𝑟 2𝑛
𝐹 = 𝑃 (1 + )
2
0.04 2(1)
𝐹 = 20,000 (1 + ) = ₱20,808.00
2
𝑖
In the same way, if interest is compounded quarterly, the rate per period is and
4
there are 4𝑛 periods in 𝑛 years. In symbols, the compound amount is
𝑟 4𝑛
𝐹 = 𝑃 (1 + )
4
In general, the pattern can be extended for compounding 𝑘 times per year to get
𝑟 𝑘𝑛 Equation 1.9
𝐹 = 𝑃 (1 + )
𝑘
𝑟
where 𝑘 is called the periodic rate.
EXAMPLE 1.7
Identify the interest rate per compounding period and the number of compounding
periods for each of the following investments.
(a) 12% compounded monthly for 4 years
(b) 10.2% compounded quarterly for 9 quarters
SOLUTION.
𝑟 0.12
(a) 𝑟 = 12% = 0.12 and 𝑘 = 12 (months per year), then 12 = 12
= 0.01. The number of
compounding periods is 12𝑡 = 12 ∙ 4 = 48.

𝑟 0.102
(b) 𝑟 = 10.2% = 0.102 and 𝑘 = 4 (quarters per year), then 4 = = 0.026. The number
4
of compounding periods is 9.

SUBMISSION DATES STRANDS
NOVEMBER 14, 2022 ABM & HUMSS
NOVEMBER 15, 2022 AS & ICT
Quiz 1
SIMPLE AND COMPOUND INTERESTS
Name___________________________________ Subject Teacher ______________

Grade Level/Section _______________ Date_______________
Multiple Choice. DO NOT COPY THE QUESTIONS AND CHOICES. JUST WRITE
THE LETTER OF THE CORRECT ANSWER IN YOUR PAPER (1 year = 365 days)
Rachele invested ₱50,000.00 at 10.5% simple interest for 120 days.
1. Find the interest at the end of the term.
A. ₱1726.03 B. ₱63,000.00 C. ₱36,000.00 D. ₱2671.30
2. Find the amount at the end of the term.
A. ₱52,671.30 B. ₱51,726.03 C. ₱113,000.00 D. ₱86,000.00
Karen invested ₱25,000.00 at 16% simple interest for 6 years.

3. How much interest will be earned?
A. ₱42,000.00 B. ₱2,400.00 C. ₱24,000.00 D. ₱240,000.00
4. What is the future value of the investment at the end of 6 years?
A. ₱67,000.00 B. ₱27,400.00 C. ₱265,000.00 D. ₱49,000.00
5. Adrian is investing an amount at 15% simple interest for 3 years. If he intends to have
₱48,200.00 at the end of the term, what must be his principal?
A. ₱48,200.00 B. ₱41,913.04 C. ₱37,076.92 D. ₱33,241.38
Find the future value of the indicated principal.

6. ₱30,000.00 at 8% compounded annually for 10 years.
A. ₱54,000.00 B. ₱32,400.00 C. ₱64,767.75 D. ₱3,221.22
7. ₱35,000.00 at 6% compounded semi-annually for 12 years.

A. ₱37,100.00 B. ₱71,147.79 C. ₱71,521.74 D. ₱70,426.88

8. ₱152,000.00 at 9% compounded daily for 10 years.
A. ₱373,818.20 B. ₱372,606.28 C. ₱371,369.41 D. ₱370,148.72
Find the present value that will generate the indicated future value
9. ₱43,000.00 at 10% compounded annually for 5 years.
A. ₱26,699.62 B. ₱40,913.02 C. ₱42,785.64 D. ₱39,090.90
10. ₱36,000.00 at 9.75% compounded monthly for 4 years.

A. ₱24,599.52 B. ₱24,412.49 C. ₱24,812.29 D. ₱24,450.58
Application 1
SIMPLE AND COMPOUND INTERESTS

Direction: Answer as directed. Show your solutions.
1. (15 points) Complete the table to find the compound amount of ₱50,000.00 invested
at 10% interest.
in 1 year In 5 years In 10 years
a. Compounded annually
b. Compounded semi-annually
c. Compounded quarterly
d. Compounded monthly
e. Compounded daily
2. (10 points) Fifteen years ago, ₱1,000.00 was deposited in a bank account, and today
it is worth ₱2370.00. The bank pays interest semi-annually. What was the interest rate
paid in this account?

LESSON 2
2. SIMPLE AND GENERAL ANNUITIES
1. Illustrates simple and general annuities.
2. Distinguishes between simple and general annuities.
3. Finds the future value and present value of both simple annuities and general
annuities.
4. Calculates the fair market value of a cash flow stream that includes an annuity.
5. Calculates the present value and period of deferral of a deferred annuity.
Learning Objectives: At the end of this lesson, the learners are expected to:
1. Illustrate simple and general annuities.
2. Distinguish between simple and general annuities.
3. Find the future value and present value of both simple annuities and general
annuities.
4. Calculate the fair market value of a cash flow stream that includes an annuity.
5. Calculate the present value and period of deferral of a deferred annuity.
General Instructions:
Now that you are holding this Module, do the following:
6. Make sure to indicate your name, section, date of submission, complete name of
the subject teacher, title of the lesson, activity/quiz number in your answer sheets.
7. Enjoy learning!

2.1. Annuity
If the payment for each period is fixed, and the compound interest rate is fixed over
a specified time, the payment is called an annuity payment. Accounts associated with
streams of annuity payments are called annuities. If the payment is made at the end of
each period, it is called an ordinary annuity. If the payment is due at the beginning of
each period, the annuity is called an annuity due. Each payment in an annuity is called
the periodic payment. The time between the successive payment dates of an annuity is
called the payment interval. The interval between the beginning of the first payment
period and the end of the last payment period is called the term of the annuity.
The following are examples of annuities: rent payment, pension, and monthly
payment of car loan or mortgage.
The flowchart below gives the different kinds of annuities.
Figure 2.1. Difference between Simple Annuity and General Annuity
Definition of Terms

Annuity – a fixed sum of money paid to someone at regular intervals, subject to a fixed
compound interest rate.
Annuity Certain – payable for a definite duration. Begins and ends on a definite or fixed
date (monthly payment of car loan).
Simple Annuity – interest conversion or compounding period is equal or the same as the
payment interval.
General Annuity – interest conversion or compounding period is unequal or not the same
as the payment interval.
Ordinary Annuity (Ao)– annuity in which the periodic payment is made at the end of each
payment interval.
Annuity Due – an annuity in which the periodic payment is made at the beginning of each
payment interval.
Deferred Annuity – the periodic payment is not made at the beginning nor at the end of
each payment interval, but some later date.
General Ordinary Annuity – first payment is made at the end of every payment interval.
General Annuity Due – first payment is made at the beginning of every payment interval.
Perpetuities – a series of periodic payments which are to run infinitely or forever.
Example of a simple annuity is a deposit of ₱5,500.00 being made at the end of

every three months to an account that earns 5.6% interest compounded quarterly. Since
the payment interval at the end of every three months (quarterly) is equal to the
compounding interval, quarterly, the situation represents a simple annuity. An example
for general annuity is a payment being made at the end of each month for a loan that
charges 1.05% interest compounded quarterly. Since the payment interval at the end of
the month is not equal to the compounding interval, quarterly, the situation represents
a general annuity.
For ordinary annuity, an example of this is someone’s monthly mortgage
payment that costs ₱35.148.05 at the end of each month. Because the payments are
made at the end of each month, the stream of monthly mortgage payments is an
ordinary annuity. For annuity due, an example for this is a rent for an apartment that

costs ₱7,000.00 and due at the beginning of each month. Since the payments come at
the beginning of each month, the stream of rental payments is an annuity due.
Since most annuities involve relatively small periodic payment and longer period
of time, they are affordable for the average person. If longer periods of time are involved,
formulas are needed to simplify computations of the future value of annuity.
2.2. Simple Ordinary Annuity

In ordinary annuity, the equal payments are made at the end of each compounding
period starting from the first compounding period.
Figure 2.2. Cash Flow Diagram of Ordinary Annuity (from

mathalino.com)
From the cash flow diagram shown above, the future amount F is the sum of
payments starting from the end of the first period to the end of the nth period. Observe
that the total number of payments is n and the total number of compounding periods is
also n. Thus, in ordinary annuity, the number of payments and the number of
compounding periods are equal.
The future value (F) of an annuity is the total accumulation of the payments and interest
earned.
(1 + 𝑖 )𝑛 − 1 Equation 2.1
𝐹 = 𝐴[ ]
𝑖
where F = Future Value or Amount

A = periodic payment
𝑟 𝑎𝑛𝑛𝑢𝑎𝑙 𝑟𝑎𝑡𝑒
i = interest rate per period when 𝑘 or 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑐𝑜𝑛𝑣𝑒𝑟𝑠𝑖𝑜𝑛 𝑝𝑒𝑟𝑖𝑜𝑑𝑠 𝑖𝑛 𝑎 𝑦𝑒𝑎𝑟

n = total number of conversion periods 𝑛 = 𝑘𝑡. 𝑡 = number of years
(1+𝑖)𝑛−1
The factor is called equal-payment-series compound-amount factor and is
𝑖
denoted by (𝐹/𝐴, 𝑖, 𝑛).

The present value (P) of an annuity is the principal that must be invested today to
provide the regular payments of an annuity.
(1 + 𝑖 )𝑛 − 1 Equation 2.2
𝑃 = 𝐴[ ]
𝑖 (1 + 𝑖 )𝑛
where P = Present Value or Amount
(1+𝑖)𝑛 −1
The factor 𝑖(1+𝑖)𝑛
is called equal-payment-series present-worth factor and is
denoted by (𝑃/𝐴, 𝑖, 𝑛).
EXAMPLE 2.1. Future Value of Simple Ordinary Annuity

If you pay ₱50.00 at the end of each month for 40 years on an account that pays
interest at 10% compounded monthly, how much money do you have after 40 years?
SOLUTION.
𝑟 10% 0.1
We are given 𝐴 = ₱50.00, 𝑖 = 𝑘 = = , and 𝑛 = 𝑘𝑡 = 12(40) = 480. To find
12 12
the future value, we use Equation 2.1.

(1 + 𝑖)𝑛 − 1
𝐹 = 𝐴[ ]
𝑖
0.1 480
(1 + ) −1
𝐹 = 50 [ 12 ] = ₱316,203.98
0.1
12
EXAMPLE 2.2. Future Value of Simple Ordinary Annuity

Marie and Maricel are twins. After graduation and being finally able to get a good
job, they plan for retirement as follows.
Starting at age 24, Marie deposits ₱10,000.00 at the end of each year for 36 years.
Starting at age 42, Maricel deposits ₱20,000.00 at the end of each year for 18
years.

Who will have the greater amount at retirement if both annuities earn 12% per year
compounded annually?
SOLUTION.
For Marie’s plan For Maricel’s plan
𝐴 = ₱10,000.00 𝐴 = ₱20,000.00
𝑟 12% 𝑟 12%
𝑖= = = 0.12 𝑖= = = 0.12
𝑘 1 𝑘 1
𝑛 = 𝑘𝑡 = 1(36) = 36 𝑛 = 𝑘𝑡 = 1(18) = 18
(1 + 𝑖)𝑛 − 1 (1 + 𝑖)𝑛 − 1
𝐹 = 𝐴[ ] 𝐹 = 𝐴[ ]
𝑖 𝑖
(1 + 0.12)36 − 1 (1 + 0.12)18 − 1
𝐹 = 10000 [ ] 𝐹 = 20000 [ ]
0.12 0.12
𝐹 = ₱4,844,631.16 𝐹 = ₱1,114,994.30
Note: The example shows the value of time and the advantage of saving early on the
amount of money.
EXAMPLE 2.3. Present Value of Simple Ordinary Annuity

Raymund works very hard because he wants to have enough money in his
retirement account when he reaches the age 60. He wants to withdraw ₱36,000.00 every
3 months for 20 years starting 3 months after he retires. How much must Raymund
deposit at retirement at 12% per year compounded quarterly for the annuity?
SOLUTION.
The principal that Raymund must deposit at retirement is the present value of the
annuity payments.
Using Equation 2.2.
Write the values of A, i, and n. 𝐴 = ₱36,000.00
𝑟 12%
𝑖= = = 0.03
𝑘 4
𝑛 = 𝑘𝑡 = 4(20) = 80
Write the working equation. (1 + 𝑖)𝑛 − 1

𝑃 = 𝐴[ ]
𝑖(1 + 𝑖)𝑛
Substitute for A, i, and n. (1 + 0.03)80 − 1

𝑃 = 36000 [ ]
0.03(1 + 0.03)80

Calculate. 𝑃 = ₱1,087,227.48
Raymund needs ₱1,087,227.48 at retirement to pay for the annuity.
EXAMPLE 2.4. Present Value of Simple Ordinary Annuity

Sienna borrows money to buy a cellphone. She will repay the loan by making
monthly payments of ₱1,500.00 per month for the next 24 months at an interest rate of
9% per year compounded monthly. How much did Sienna borrow?
SOLUTION
Using Equation 2.2.
𝑟 9%
𝑖= = = 0.0075
𝑘 12
𝑛 = 𝑘𝑡 = 24
Write the working equation. (1 + 𝑖)𝑛 − 1

𝑃 = 𝐴[ ]
𝑖(1 + 𝑖)𝑛

𝑃 = 1500 [ ]
0.0075(1 + 0.0075)80
Calculate. 𝑃 = ₱32,833.72
Sienna borrowed ₱32,833.72.

2.3. Simple Annuity Due
In annuity due, the equal payments are made at the beginning of each
compounding period starting from the first period. The diagram below shows the cash
flow in annuity due.
Figure 2.3. Cash Flow Diagram of Annuity Due (from mathalino.com)
As indicated in Figure 2.3, F1 is the sum of ordinary annuity of n payments. The

future amount F of annuity due at the end of nth period is one compounding period away
from F1. In symbol, F = F1(1 + i).
Future Value of Simple Annuity Due
(1 + 𝑖 )𝑛 − 1 Equation 2.3
𝐹 = 𝐴(1 + 𝑖) [ ]
𝑖
Present Value of Simple Annuity Due
(1 + 𝑖 )𝑛 − 1 Equation 2.4
𝑃 = 𝐴(1 + 𝑖) [ ]
𝑖 (1 + 𝑖 )𝑛
EXAMPLE 2.5. Future Value of Simple Annuity Due

Suppose Mr. and Mrs. Laurente deposited ₱20,000.00 at the beginning of each
year for 5 years in an investment that earns 10% per year compounded annually, what is
the amount or future value of the annuity?
SOLUTION.
𝑟 10%
We know that 𝐴 = ₱20,000.00, 𝑖 = = = 0.1, and 𝑛 = 𝑘𝑡 = 1(5) = 5.
𝑘 1
Using Equation 2.3,

(1 + 𝑖 )𝑛 − 1 (1 + 0.1)5 − 1
𝐹 = 𝐴( 1 + 𝑖 ) [ ] = 20000(1 + 0.1) [ ] = ₱134,312.20
𝑖 0.1
Note: An investment of ₱20,000.00 at the beginning of each year for 5 years at 10%
compounded annually would return ₱134,312.20. This is ₱12,210.20 more than when the
investment is done at the end of each year.
EXAMPLE 2.6. Present Value of Simple Annuity Due

Regine borrows money for the renovation of her house and repays by making
yearly payments of ₱50,000.00 at the beginning of each year for a period of 10 years at
an interest rate of 8% compounded annually. How much did Regine borrow?
SOLUTION
Using Equation 2.4.
𝑟 8%
𝑖= = = 0.08
𝑘 1
𝑛 = 𝑘𝑡 = 10
Write the working equation. ( 1 + 𝑖 )𝑛 − 1

𝑃 = 𝐴(1 + 𝑖) [ ]
𝑖 (1 + 𝑖 )𝑛
𝑃 = 50000(1 + 0.08) [ ]
𝑖0.08(1 + 0.08)10
Calculate. 𝑃 = ₱362,344.40
Regine borrows ₱362,344.40.
EXAMPLE 2.7. Regular Payment of a Simple Annuity

Jade borrows ₱500,000.00 to buy a car. She has two options to repay her loan.
The interest is compounded monthly.
Option 1: 24 monthly payments every beginning of the month at 12% per year.
Option 2: 60 monthly payments every end of the month at 15% per year.
Find
(a) Jade’s monthly payments under each option
(b) The interest Jade pays under each option

SOLUTION
(a) Option 1 Option 2
𝑃 = ₱500,000.00 𝑃 = ₱500,000.00
𝑟 12% 𝑟 15%
𝑖= = = 0.0.1 𝑖= = = 0.0125
𝑘 12 𝑘 12
𝑛 = 24 𝑛 = 60
𝐴 =? 𝐴 =?
(1 + 𝑖)𝑛 − 1 (1 + 𝑖)𝑛 − 1
𝑃 = 𝐴(1 + 𝑖) [ ] 𝑃 = 𝐴[ ]
𝑖(1 + 𝑖)𝑛 𝑖(1 + 𝑖)𝑛
𝑃 𝑖(1 + 𝑖)𝑛 𝑖(1 + 𝑖)𝑛
𝐴= [ ] 𝐴 = 𝑃[ ]
(1 + 𝑖) (1 + 𝑖)𝑛 − 1 (1 + 𝑖)𝑛 − 1
500000 0.01(1 + 0.01)24 0.0125(1 + 0.0125)60
𝐴= [ ] 𝐴 = 500000 [ ]
(1 + 0.01) (1 + 0.01)24 − 1 (1 + 0.0125)60 − 1
𝐴 = ₱23,303.70 𝐴 = ₱11,894.97
(b) The interest paid is the difference between the total amount paid and the principal
borrowed.
Option 1 Option 2
24 payments of ₱23,303.70 60 payments of ₱11,894.97

𝑃1 = 24 × 23,303.7 = ₱559,288.80 𝑃1 = 60 × 11,894.97 = ₱713,698.20
Total interest paid: 𝐼 = 𝑃1 − 𝑃 Total interest paid: 𝐼 = 𝑃1 − 𝑃

𝐼 = ₱559,288.80 − 500,000.00 𝐼 = ₱713,698.20 − 500,000.00
𝐼 = ₱59,288.80 𝐼 = ₱213,698.20
2.4. Deferred Annuity

A deferred annuity is an annuity in which the first payment is not made at the
beginning nor at the end of the payment interval but at a later date. The length of time
d d+1 d+2 d+(n-1) d+n
d periods
Figure 2.4. Cash Flow Diagram of Deferred Annuity (from mathalino.com)

(d + n) periods

when these payments are made is called the period of deferment. The first payment is
made one period after the period of deferment. Thus, annuity that is deferred for 6 periods
will have the first payment at the end of 7 periods. Likewise, in an annuity whose first
payment is made at the end of the 7 periods, the annuity is deferred for 6 periods. In the
diagram below, the first payment was made at the end of the 𝑑th period and 𝑛 number of
payments was made. The 𝑛 payments form an ordinary annuity as indicated in the figure.
Future Value of Deferred Annuity
(1 + 𝑖 )𝑛 − 1 Equation 2.5
𝐹 = 𝐴[ ]
𝑖
The future value of a deferred annuity is the same as the future value of simple ordinary
annuity (Equation 2.1).
Present Value of Deferred Annuity
𝐹 (1 + 𝑖 )𝑛 − 1 Equation 2.6
𝑃= = 𝐴 [ ]
(1 + 𝑖)𝑑+𝑛 𝑖 (1 + 𝑖 )𝑑+𝑛
EXAMPLE 2.8. Present Value of a Deferred Annuity

Find the present value of 10 semi-annual payments of ₱2,000.00 each if the first
payment is due at the end of 3 years and money is worth 8% compounded semi-annually.
SOLUTION.
8%
Given: 𝐴 = ₱2,000.00, 𝑟 = 8%, 𝑘 = 2, 𝑡 = 5, 𝑖= = 0.04, 𝑛 = 2(5) = 10
2
To visualize and find 𝑑, we have:
d = 5 (see the squares)

Required: P
(1 + 𝑖)𝑛 − 1
𝑃 = 𝐴[ ]
𝑖(1 + 𝑖)𝑑+𝑛
(1 + 0.04)10 − 1
𝑃 = 2000 [ ]
0.04(1 + 0.04)5+10
𝑃 = ₱13,333.13
Find the present value of a deferred annuity of ₱1,500.00 every 3 months for 8
years that is deferred 3 years if money is worth 6% converted or compounded quarterly.
SOLUTION.
Given:
6%
𝐴 = ₱1,500.00, 𝑟 = 6%, 𝑘 = 4, 𝑡 = 8, 𝑖 = = 0.015, 𝑛 = 4(8) = 32, 𝑑 = 3(4) = 12
4
To visualize and find 𝑑, we have:
(1 + 𝑖)𝑛 − 1
𝑃 = 𝐴[ ]
𝑖(1 + 𝑖)𝑑+𝑛
(1 + 0.015)32 − 1
𝑃 = 1500 [ ]
0.015(1 + 0.015)12+32
𝑃 = ₱31,699.68
A deferred annuity is purchased that will pay ₱5,000.00 per quarter for 10 years
after being deferred for 5 years and with interest rate of 6% compounded quarterly. What
is the present value of the annuity?
SOLUTION.
Given:
6%
𝐴 = ₱5,000.00, 𝑟 = 6%, 𝑘 = 4, 𝑡 = 10, 𝑖 = = 0.015, 𝑛 = 4(10) = 40, 𝑑 = 5(4) = 20
4
Required: P
(1 + 𝑖)𝑛 − 1
𝑃 = 𝐴[ ]
𝑖(1 + 𝑖)𝑑+𝑛
(1 + 0.015)40 − 1
𝑃 = 5000 [ ]
0.015(1 + 0.015)20+40
𝑃 = ₱111,058.15
2.5. General Annuity
A general annuity is an annuity wherein the interest conversion period is
unequal or not the same as the payment interval.
NOMINAL AND EFFECTIVE RATES
In Lesson 1, we learned that the primary difference between simple interest and
compound interest is that compound interest includes interest on the interest earned in
the previous period, while simple interest does not. Here we discuss nominal and effective
interest rates, which have the same basic relationship. The difference here is that the
concepts of nominal and effective must be used when interest is compounded more than
once each year. For example, if an interest rate is expressed as 1% per month, the terms
nominal and effective interest rates must be considered.
There are three cases for this.
Case 1: Compounding and payment periods coincide. This is what we have learned
𝑟
so far. 𝑖 = 𝑘 in this case. However, this is not always the case.
Case 2: Compounding is more frequent than payments. This makes use of the
nominal and effective rate formula which is stated in Equation 2.7.
𝑘2 Equation 2.7
𝑟 𝑘1
𝑖 = (1 + ) − 1
𝑘2
where 𝑘1 is the payment interval and 𝑘2 is the compounding interval with respect to a
year.
What Equation 2.7 does is transforming the nominal interest to effective interest
rate. An effective interest rate 𝑖 is a rate wherein the compounding of interest is taken into
account. Effective rates are commonly expressed on an annual basis as an effective
annual rate; however, any time basis may be used. This is clear in the next example.
EXAMPLE 2.10. Present Value of a General Ordinary Annuity

Find the present value of an ordinary annuity of ₱2,000.00 payable annually for 9
years if the money is worth 5% compounded quarterly.
SOLUTION.
Notice that this is a Case 2 situation wherein your compounding (every three
months) is more frequent than the payment period (once a year). The compounding and
payments do not coincide. To do this, we have to get the effective interest rate which will
transform our quarterly nominal interest to effective annual interest.
Given:
𝐴 = ₱2,000.00, 𝑟 = 5%, 𝑘1 = 1 (𝑎𝑛𝑛𝑢𝑎𝑙𝑙𝑦), 𝑘2 = 4 (𝑞𝑢𝑎𝑟𝑡𝑒𝑟𝑙𝑦) , 𝑡 = 9 𝑦𝑒𝑎𝑟𝑠, 𝑛 = 9
Required: P
𝑘2
𝑟 𝑘1
𝑖 = (1 + ) − 1
𝑘2
0.05 4
𝑖 = (1 + ) − 1 = 0.0509
4
(1 + 𝑖)𝑛 − 1
𝑃 = 𝐴[ ]
𝑖(1 + 𝑖)𝑛
(1 + 0.0509)9 − 1
𝑃 = 2000 [ ]
0.0509(1 + 0.0509)9
𝑃 = ₱14,155.99
Case 3: Compounding is less frequent that payments. This is the usual case in our
banks where we deposit more frequently than it is compounded. Banks usually compound
our money per year. So, if we deposit every 3 months and it is compounded every year,
we have a Case 3 situation happening. This is demonstrated in the next example.
EXAMPLE 2.11. Present Value of a General Ordinary Annuity with Down Payment
The latest cellphone sells for ₱5,000.00 down payment and ₱900.00 every end
of each quarter for 3 years at the rate of 8% compounded semi-annually. Find the cash
equivalent of the cellphone.
SOLUTION

Notice that this is a Case 3 situation wherein your compounding (every six months)
is more frequent than the payment period (every three months). To get the cash
equivalent (C), add the down payment (D) and the present value (P).
Given:
𝐴 = ₱900.00, 𝑟 = 8%, 𝑘1 = 4 (𝑞𝑢𝑎𝑟𝑡𝑒𝑟𝑙𝑦 ), 𝑘2 = 2 (𝑠𝑒𝑚𝑖 − 𝑎𝑛𝑛𝑢𝑎𝑙𝑙𝑦), 𝑡 =
3 𝑦𝑒𝑎𝑟𝑠, 𝑛 = 4(3) = 12
Required: P
𝑘2
𝑟 𝑘1
𝑖 = (1 + ) − 1
𝑘2
2
0.08 4
𝑖 = (1 + ) − 1 = 0.0198
2
(1 + 𝑖)𝑛 − 1
𝑃 = 𝐴[ ]
𝑖(1 + 𝑖)𝑛
(1 + 0.0198)12 − 1
𝑃 = 900 [ ]
0.0198(1 + 0.0198)12
𝑃 = ₱9,529.28
Thus, the cash equivalent (C) is
𝐶 = 𝐷 + 𝑃 = 5000 + 9529.28 = ₱14,529.28
EXAMPLE 2.12. Future Value of a General Ordinary Annuity
₱25,000.00 will be invested in an account at the end of each year at 4%
compounded semi-annually. Find the size of the fund at the beginning of the 16 th year.
SOLUTION. This is Case 2.
Given:
𝐴 = ₱25,000.00, 𝑟 = 4%, 𝑘1 = 1 , 𝑘2 = 2 , 𝑡 = 15 𝑦𝑒𝑎𝑟𝑠, 𝑛 = 15
Required: F (use Equation 2.1)
𝑘2
𝑟 𝑘1
𝑖 = (1 + ) − 1
𝑘2
2
0.04 1
𝑖 = (1 + ) − 1 = 0.0404
2
(1 + 𝑖)𝑛 − 1
𝐹 = 𝐴[ ]
𝑖

(1 + 0.0404)15 − 1
𝐹 = 25000 [ ]
0.0404
𝐹 = ₱502,080.19
EXAMPLE 2.13. Present Value of a General Annuity Due
Find the present value of an annuity due of ₱10,000.00 payable quarterly for 10
years if money is worth 6% compounded semi-annually.
SOLUTION. This is Case 3.
Given:
𝐴 = ₱10,000.00, 𝑟 = 6%, 𝑘1 = 4 , 𝑘2 = 2 , 𝑡 = 10 𝑦𝑒𝑎𝑟𝑠, 𝑛 = 4(10) = 40
Required: P (use Equation 2.4)
𝑘2
𝑟 𝑘1
𝑖 = (1 + ) − 1
𝑘2
2
0.06 4
𝑖 = (1 + ) − 1 = 0.01489
2
(1 + 𝑖)𝑛 − 1
𝑃 = 𝐴(1 + 𝑖) [ ]
𝑖(1 + 𝑖)𝑛
(1 + 0.01489)40 − 1
𝑃 = 10000(1 + 0.01489) [ ]
0.01489(1 + 0.01489)40
𝑃 = ₱304,227.87
EXAMPLE 2.14. Present Value of a General Annuity Due with Down Payment
Jeanelyn bought a brand-new car for ₱500,000.00 down payment and ₱20,000.00
every first day of each month for 3 years. If payments are based on 8% compounded
semi-annually, what is the cash price of the car?
SOLUTION.
Given:
𝐴 = ₱20,000.00, 𝑟 = 8%, 𝑘1 = 12 , 𝑘2 = 2 , 𝑡 = 3 𝑦𝑒𝑎𝑟𝑠, 𝑛 = 12(3) = 36
𝑘2
𝑟 𝑘1
𝑖 = (1 + ) − 1
𝑘2
2
0.08 12
𝑖 = (1 + ) − 1 = 0.00656
2
(1 + 𝑖)𝑛 − 1
𝑃 = 𝐴(1 + 𝑖) [ ]
𝑖(1 + 𝑖)𝑛
(1 + 0.00656)36 − 1
𝑃 = 20000(1 + 0.00656) [ ]
0.00656(1 + 0.00656)36
𝑃 = ₱643,654.45
Thus, the cash price (C) is
𝐶 = 𝐷 + 𝑃 = 500,000 + 643,654.45 = ₱1,143,654.45
EXAMPLE 2.15. Future Value of a General Annuity Due
Hazel wants to save ₱100,000 for her first year of college. She deposits ₱3,500 at
the beginning of each month in an account that earns 4% per annum compounded semi-
annually. Will Hazel have enough money saved at the end of 2 years?
SOLUTION.
Given:
𝐴 = ₱3,500, 𝑟 = 4%, 𝑘1 = 12 , 𝑘2 = 2 , 𝑡 = 2 𝑦𝑒𝑎𝑟𝑠, 𝑛 = 12(2) = 24
Required: F (use Equation 2.3)
𝑘2
𝑟 𝑘1
𝑖 = (1 + ) − 1
𝑘2
2
0.04 12
𝑖 = (1 + ) − 1 = 0.0033
2
(1 + 𝑖)𝑛 − 1
𝐹 = 𝐴(1 + 𝑖) [ ]
𝑖
(1 + 0.0033)24 − 1
𝐹 = 3500(1 + 0.0033) [ ] = ₱87,560.78
0.0033
Because ₱87,560.78 < ₱100,000.00, Hazel will not have enough money at the end of 2
years.
EXAMPLE 2.16. Regular Payment of a General Ordinary Annuity
Mr. and Mrs. Salazar will need ₱300,000.00 in 2 years to start their own business.
They plan to save money by making monthly deposits at the end of each month in an
account earning 8% per year compounded quarterly. How much must they save monthly?
SOLUTION.
Given:
𝐹 = ₱300,000, 𝑟 = 8%, 𝑘1 = 12 , 𝑘2 = 4 , 𝑡 = 2 𝑦𝑒𝑎𝑟𝑠, 𝑛 = 12(2) = 24
Required: A (use Equation 2.1)

𝑘2
𝑟 𝑘1
𝑖 = (1 + ) − 1
𝑘2
4
0.08 12
𝑖 = (1 + ) − 1 = 0.006623
4
(1 + 𝑖)𝑛 − 1
𝐹 = 𝐴[ ]
𝑖
𝑖
𝐴 = 𝐹[ ]
(1 + 𝑖)𝑛 − 1
0.006623
𝐴 = 300000 [ ] = ₱11,574.16
(1 + 0.006623)24 − 1
EXAMPLE 2.17. Regular Payment of a General Ordinary Annuity

A couple left their son with a ₱ 1,000,000.00 insurance policy. What monthly
income would the policy provide for 15 years if the insurance company pays 8%
compounded semi-annually?
SOLUTION.
Given:
𝑃 = ₱1,000,000, 𝑟 = 8%, 𝑘1 = 12 , 𝑘2 = 2 , 𝑡 = 15 𝑦𝑒𝑎𝑟𝑠, 𝑛 = 12(15) = 180
𝑘2
𝑟 𝑘1
𝑖 = (1 + ) − 1
𝑘2
2
0.08 12
𝑖 = (1 + ) − 1 = 0.00656
2
(1 + 𝑖)𝑛 − 1
𝑃 = 𝐴[ ]
𝑖(1 + 𝑖)𝑛
𝑖(1 + 𝑖)𝑛
𝐴 = 𝑃[ ]
(1 + 𝑖)𝑛 − 1
0.00656(1 + 0.00656)180
𝐴 = 1,000,000 [ ] = ₱9,481.53
(1 + 0.00656)180 − 1

Quiz 2
SIMPLE AND GENERAL ANNUITIES

THE LETTER OF THE CORRECT ANSWER IN YOUR PAPER. (2 points each)
1. You borrowed money today and promised to pay in 7 equal payments at the end of 7
quarters. If the interest is 13% compounded quarterly, how much did you initially borrow
if quarterly payment is ₱3000.00
A. ₱18,834.38 B. ₱18,382.90 C. ₱18,516.00 D. ₱18,200.56
2. What is the accumulated amount of six-year annuity paying ₱7000 at the end of each
year, with interest at 16% compounded annually?
A. ₱62,454.34 B. ₱62,114.34 C. ₱62,544.34 D. ₱62,842.34
3. Your mother bought a brand-new refrigerator costing ₱60,000.00 if paid in cash.

However, she can purchase it on installment basis to be paid within 6 years. If money is
worth 8% compounded annually, what is her yearly payment if all payments are to be
made at the beginning of each year?
A. ₱12,400.69 B. ₱12,782.69 C. ₱12,017.52 D. ₱12,827.69
4. Mr. Zobel borrows ₱200,000.00 at 10% effective annual interest. He must pay back the
loan over 20 years with uniform monthly payments due on the first day of each month.
What does Mr. Zobel pay each month?
A. ₱1,858.46 B. ₱1,839.46 C. ₱1,870.46 D. ₱1,846.46

5. You buy a piece of land for ₱50,000 down payment and 10 deferred semi-annual
payments of ₱10,000 each, starting three years from now. What is the total amount of the
investment if the rate of interest is 12% compounded semi-annually?
A. ₱104,998.85 B. ₱134,666.80 C. ₱143,999.08 D. ₱164,969.80
Application 2
SIMPLE AND GENERAL ANNUITIES

Direction: Answer each of the following problems. State the given, required, and show
your solution (like Example 2.17)
1. Joie gets a loan of ₱80,000.00 to start her small business. She will repay the loan with
equal monthly payments at the beginning of each month over 3 years at 8% per year
compounded monthly. How much is Joie’s monthly payment? What is the total amount
that Joie repays?
2. A house sells for ₱1,000,000.00 down and 10 annual payments of ₱120,000.00 each.
If the first payment is deferred for 4 years, find the cash price if money is worth 10%
compounded annually.
3. A television set was purchased at ₱5000.00 down payment and ₱1000.00 at the end
of each month for 36 months. If money is worth 10% compounded quarterly, find the cash
value of the set.
4. What is the present value of ₱4200.00 per quarter for 10 years if money is worth 9%
compounded semi-annually?
5. In order to save ₱50,000.00 at the end of 2 years, what equal investments at the end
of each month must be made if money is worth 4% compounded quarterly?

LESSON 3
3. AMORTIZATION AND LOANS
1. Illustrates business and consumer loans.
2. Distinguishes between business and consumer loans.
3. Solves problems involving business and consumer loans (amortization,
mortgage).
1. Illustrate business and consumer loans.
2. Distinguish between business and consumer loans.
3. Solve problems involving business and consumer loans.
6. Make sure to indicate your name, track, strand, section, date of submission,
complete name of the subject teacher, title of the lesson, activity/quiz number in
your answer sheets.
7. Enjoy learning!

The gradual extinction of a loan over a period of time by means of a sequence of
regular or equal payments as to principal and interest due at the end of equal intervals of
time is known as amortization. When a loan is gradually repaid, the construction of an
amortization schedule is very important for both the lender and the lendee. They will both
see how much of each payment goes to the interest and how much is applied to the
reducing principal.
EXAMPLE 3.1. Regular Payment of Simple Ordinary Annuity

Cristine obtained a loan of ₱50,000.00 for the tuition fee of her son. She has to
repay the loan by equal payments at the end of every six months for 3 years at 10%
interest compounded semi-annually. Find the periodic payment and construct an
amortization schedule.
SOLUTION.
0.1
Given: 𝑃 = ₱50,000.00, 𝑟 = 10%, 𝑘 = 2 , 𝑖 = = 0.05 𝑡 = 3 𝑦𝑒𝑎𝑟𝑠, 𝑛 = 2(3) = 6
2

(1 + 𝑖)𝑛 − 1
𝑃 = 𝐴[ ]
𝑖(1 + 𝑖)𝑛
𝑖(1 + 𝑖)𝑛
𝐴 = 𝑃[ ]
(1 + 𝑖)𝑛 − 1
0.05(1 + 0.05)6
𝐴 = 50000 [ ]
(1 + 0.05)6 − 1
𝐴 = ₱9,850.87
In this example, we can say that the loan of ₱50,000.00 that is amortized by equal periodic
or installment payments of ₱9,850.87 at equal intervals end of every six months, becomes
the present value of a simple annuity. The amortization schedule is shown in Table 3.1.
The amortization schedule can be prepared as follows (C for Column, R for Row):
1. Calculate the periodic payment. Complete Column B with this periodic payment.
2. To fill up Column C, calculate interest using the formula: 𝑖 = 𝑃𝑟𝑡.
1
𝑖 = 50000(0.10) ( ) = ₱2500 for row 1
2

Table 3.1. Amortization Schedule of Cristine's Loan.
Period Periodic Interest at 10% Amount repaid Outstanding

Payment at the due at the end to the Principal Principal at the
end of every 6 of every 6 at the end of end of every 6
months months every 6 months months
(A) (B) (C) (D) (E)
0 ₱50,000.00
1 ₱9,850.87 ₱2,500.00 ₱7,350.87 ₱42,649.13
2 ₱9,850.87 ₱2,132.46 ₱7,718.41 ₱34,930.72
3 ₱9,850.87 ₱1,746.54 ₱8,104.33 ₱26,826.39
4 ₱9,850.87 ₱1,341.31 ₱8,509.56 ₱18,316.84
5 ₱9,850.87 ₱915.84 ₱8,935.03 ₱9,831.81
6 ₱9,850.87 ₱469.09 ₱9,381.81 ₱0.00
Total ₱59,105.22 ₱9,105.24 ₱50,000.00
1
𝑖 = 42649.13(0.10) ( ) = ₱2132.46 for row 2
2
1
𝑖 = 34930.72(0.10) (2) = ₱1746.54 for row 3
1
𝑖 = 26826.39(0.10) (2) = ₱1341.31 for row 4
1
𝑖 = 18316.84(0.10) (2) = ₱915.84 for row 5
1
𝑖 = 9831.81(0.10) (2) = ₱469.09 for row 6
3. To fill up Column D, subtract Column C from Column B.

CD, R1: ₱9850.87 – 2500 = 7350.87
CD, R2: ₱9850.87 – 2132.46 = 7718.41
CD, R3: ₱9850.87 – 1746.54 = 8104.33
CD, R4: ₱9850.87 – 1341.31 = 8509.56
CD, R5: ₱9850.87 – 915.84 = 8935.03
CD, R6: ₱9850.87 – 469.09 = 9381.81
4. To fill up Column E, subtract Column D from Column E.

CD, R1: ₱9850.87 – 2500 = 7350.87
CD, R2: ₱9850.87 – 2132.46 = 7718.41
CD, R3: ₱9850.87 – 1746.54 = 8104.33
CD, R4: ₱9850.87 – 1341.31 = 8509.56
CD, R5: ₱9850.87 – 915.84 = 8935.03
CD, R6: ₱9850.87 – 469.09 = 9381.81

Note
1. The amount of the original loan is equal to the total repayments on the principal.
2. The outstanding principal is equal to 0 at the end of the term.
EXAMPLE 3.2.
Traditional Wine Technologies, Inc. is required to pay 8 annual installments of
₱2,500,000.00 each for a loan to pay for expansion at 12% compounded annually. How
much is the loan? Construct the amortization schedule.
SOLUTION.
0.12
Given: 𝐴 = ₱2,500,000.00, 𝑟 = 12%, 𝑘 = 1 , 𝑖 = = 0.12, 𝑡 = 8 𝑦𝑒𝑎𝑟𝑠, 𝑛=8
1

Solution
(1 + 𝑖)𝑛 − 1
𝑃 = 𝐴[ ]
𝑖(1 + 𝑖)𝑛
(1 + 0.12)8 − 1
𝑃 = 2,500,000 [ ]
0.12(1 + 0.12)8
𝑃 = ₱12,419,099.41
Table 3.2. Amortization Schedule for Traditional Wine Technologies, Inc.
Period Periodic Interest at 10% Amount repaid Outstanding

Payment at the due at the end to the Principal Principal at the
end of every 6 of every 6 at the end of end of every 6
months months every 6 months months
(A) (B) (C) (D) (E)
0 ₱12,419,099.42
1 ₱2,500,000.00 ₱1,490,291.93 ₱1,009,708.07 ₱11,409,391.35
2 ₱2,500,000.00 ₱1,369,126.96 ₱1,130,873.04 ₱10,278,518.31
3 ₱2,500,000.00 ₱1,233,422.20 ₱1,266,577.80 ₱9,011,940.51
4 ₱2,500,000.00 ₱1,081,432.86 ₱1,418,567.14 ₱7,593,373.37
5 ₱2,500,000.00 ₱911,204.80 ₱1,588,795.20 ₱6,004,578.17
6 ₱2,500,000.00 ₱720,549.38 ₱1,779,450.62 ₱4,225,127.55
7 ₱2,500,000.00 ₱507,015.31 ₱1,992,984.69 ₱2,232,142.86
8 ₱2,500,000.00 ₱267,857.14 ₱2,232,142.86 ₱0.00
Total ₱20,000,000.00 ₱7,580,900.58 ₱12,419,099.42

A loan given to customer like Cristine in Example 3.1 for the tuition fee of her son
is an example of a consumer loan; while the loan given to the Traditional Wine
Technologies, Inc. to pay for the business expansion is an example of a business loan.
A consumer loan is a loan given to customers for personal, family, or consumable
items such as a car and home. A business loan is debt that the company is required to
repay according to the loan’s terms and conditions.
A mortgage
Although computation for consumer loans and business loans are similar, they are
different in some aspects like collateral, guarantor, documentation, terms, and follow-up.
Table 3.3 summarizes these differences.
Business Loan Consumer Loan
1. Collateral - real estate, equipment, furniture, - real estate
fixtures, inventory, or personal
assets of the business owners
2. Guarantor - the business owners have to sign - does not require a
the loan as guarantors guarantor
3. Documentation - requires credit report, tax returns, - requires a credit report or
and the last three years of financial tax returns
statements
4. Terms - shorter and includes a higher - longer than the business
interest rate loan
5. Follow-up - annual reviews of the relationship - no further follow-up once
are often conducted the loan is released
The in-depth discussion of these terms will be left to the students majoring on
Accounting and Business Management. For General Mathematics, the discussion of
amortization and how to make one is enough for the current topic.

Quiz 3
AMORTIZATION AND LOANS
Name____________________________________ Subject Teacher ______________
THE LETTER OF THE CORRECT ANSWER IN YOUR PAPER (2 POINTS EACH)
The amortization table shows portion of payments on a mortgage.
Year Payment Interest Principal Balance
1 ₱18,277.87 ₱10,000.00 ₱8,277.87 ₱491,722.13
2 ₱18,277.87 ₱9,834.44 ₱8,443.43 ₱483,278.70
3 ₱18,277.87 ₱9,665.57 ₱8,612.30 ₱474,666.40
4 ₱18,277.87 ₱9,493.33 ₱8,784.54 ₱465,881.86
5 ₱18,277.87 ₱9,317.64 ₱8,960.23 ₱456,921.63
.
.
.
36 ₱18,277.87 ₱1,723.04 ₱16,554.83 ₱69,597.39
37 ₱18,277.87 ₱1,391.95 ₱16,885.92 ₱52,711.47
38 ₱18,277.87 ₱1,054.23 ₱17,223.64 ₱35,487.83
39 ₱18,277.87 ₱709.76 ₱17,568.11 ₱17,919.72
40 ₱18,277.87 ₱356.15 ₱17,919.48 ₱0.00
Use the table above to answer the following:
1. The principal borrowed is
A. ₱500,000.00 B. ₱491,722.13 C. ₱8,277.87 D. ₱18,277.87
2. The periodic payment is
A. ₱500,000.00 B. ₱491,722.13 C. ₱8,277.87 D. ₱18,277.87
3. The total interest paid on the mortgage is
A. ₱500,000.00 B. ₱356.15 C. ₱53,546.11 D. ₱231,114.96
4. The amount of interest in the sixth payment is
A. ₱9,138.43 B. ₱8,955.64 C. ₱8,769.20 D. ₱8,579.03
5. The amount of the outstanding balance after the sixth payment is
A. ₱447,782.17 B. ₱438,459.94 C. ₱428,951.26 D. ₱419,252.42

Application 3
AMORTIZATION AND LOANS
Direction: Make use of MS Excel to construct the amortization schedule and fill up the
table below. 50 points.
A debt of ₱250,000.00 with interest at 8.5% payable annually is to be amortized

by equal payments at the end of each year for 6 years. Find the regular payment and
construct the amortization schedule for the debt.
Year Payment Interest Principal Balance

0
1
2
3
4
5
6
Total

LESSON 4
4. STOCKS AND BONDS

1. Illustrates stocks and bonds.
2. Distinguishes between stocks and bonds.
3. Describes the different markets for stocks and bonds.
4. Analyzes the different markets for stocks and bonds.
1. Illustrate stocks and bonds.
2. Distinguish between stocks and bonds.
3. Describe the different markets for stocks and bonds.
4. Analyze the different markets for stocks and bonds.
your answer sheets.
7. Enjoy learning!

4.1. Stocks
Sometimes, companies need more money for them to grow. To expand their
business, they use their own savings and the company’s profits, or they borrow from any
lending institution, or they sell more shares of its capital stock.
Investors who buy the shares of the corporation from the bank are called
shareholders or stockholders. This is where the company gets its money to grow. A
stockholder gets a stock certificate showing the number of shares it represents. In
Figure 4.1, Mr. Peter Dan Durano owns 100 shares of the Capital Stock of the Traditional
Wine Technologies, Inc. Since the company has 40,000 shares and Mr. Durano owns
100 shares; thus, he owns
100
= 0.0025 = 0.25%
40000
of the Traditional Wine Technologies, Inc. As a part-owner of the corporation, Mr. Durano
is entitled to any profit that the corporation makes.
Figure 4.1. Example of a Stock Certificate (Note: I just made this up. I cannot find a good
example from the internet.)

When companies decide to raise money by selling stocks, they generally go to a
big investment bank. The bank handles the Initial Public Offering or IPO before it becomes
available on a stock exchange.
Each certificate is registered in the owner’s name of the corporation. Since Mr.
Durano bought a share of stock, he owns a part of the corporation (1/4% of the
corporation). The profit that the corporation gives to Mr. Durano is called dividends.
Dividends are usually paid quarterly. Dividend may also be paid semi-annually or
annually. There are times when no dividends are paid. However, shareholders took the
risk with the company since they know that they only get dividends when the company
makes profit.
Shareholder
or
Certificate Par value
Stockholder
No. and
Number of
Shares
Corporation
Issuing the
Certificate
Signatures of the Corporation (It should have but just

imagine that my signature and Daniel’s are there.)

The par value of a share of stock is the value printed in the certificate. In the
sample certificate, the par value of a share stock is ₱50.00. The par value of a share
stock may be ₱1.00, ₱10.00, ₱25.00, ₱50.00, or ₱100.00, or any other value that the
corporation may want to set. All the shares of an issue of stock have the same value.
Since Mr. Durano owns 100 shares of stock with par value of ₱50.00 each, his total
investment is ₱5,000.00 (100 times ₱50 = ₱5,000.00).
Note: If the par value of a share of a stock is ₱50.00 each, it means that the bank
got it at a lower price. This is where the bank earns.
Some corporations issue stock without giving the shares any value. This stock is
called no-par stock.
After an issue of stock has been sold the first time, the investors buy and sell the
shares at any price they agree on. Ownership is just changing hands, and nothing goes
to the company. Buying or selling stocks is called trading and takes place on a stock
exchange. The Philippine Stock Exchange Plaza in Ayala Triangle, Ayala Avenue, Makati
City and another one is in Pasig, Metro Manila. The price a stock sold is called the market
price or market value.
The two types of stocks are common stock and preferred stock. A preferred
stock is a stock where the dividend set by the corporation is indicated at the time the
stock was issued. A common stock does not have a set dividend. There is no guarantee
that dividends will be paid to either class of stock. However, dividends that are paid out
go first to shareholders of preferred stock.
Definition of Terms
Stock Certificate – a paper issued to a shareholder which shows on its face the number
of shares it represents.
Shareholder or Stockholder – one who owns shares of corporation stock.
Dividend – earnings distributed to shareholders of a corporation.
Certificate number – an accession number or placeholder to keep track of the number
of certificates.
Par value – the face value of a bond or stock.
No-par Stock – stock issued without a stated value on the certificate.

Market Price – the price at which a stock on bond is sold.
Preferred Stock – type of stock for which stockholders get first choice in distributed
profits.
Common Stock – the ordinary stock of a corporation, paying no specified rate or amount
of dividend.
Initial Public Offering (IPO) – stock sold before it is available on a stock exchange.
The market price or market value of a share of stock is usually quoted in pesos per
share. A quotation of “35½” means that the price of one share is ₱35.50.
Investors make money with stock by selling stock for more money than they paid
for it. When one buys a stock through a broker (a dealer of stocks, bonds, or real estate),
the total cost of stock is the market price of the stock and the broker’s commission.
𝑇𝑜𝑡𝑎𝑙 𝑐𝑜𝑠𝑡 𝑜𝑓 𝑠𝑡𝑜𝑐𝑘 = 𝑀𝑎𝑟𝑘𝑒𝑡 𝑝𝑟𝑖𝑐𝑒 + 𝐶𝑜𝑚𝑚𝑖𝑠𝑠𝑖𝑜𝑛 Equation 4.1
EXAMPLE 4.1.
VJ bought 100 shares of Paper Mill stock at ₱150.00 per share. The broker
charged him ₱750.00 commission. Find the total cost of the stock.
SOLUTION.
Market price: 100 × ₱150 = ₱15,000.00 (no. of shares x par value)
Broker’s Commission: ₱750.00 (market price + commission)
Total cost: ₱15,750.00
EXAMPLE 4.2.
Find the total cost of each stock purchase below.
No. of Shares Name of Stock Market Price per Commission
Share
1000 ANI ₱1.75 ₱75.00
2000 COAL ₱0.94 ₱94.00

500 FGEN ₱30.55 ₱763.50
100 FPH ₱106.00 ₱530.00
750 SMC ₱74.45 ₱2,792.00
300 URC ₱215.00 ₱3,225.00
SOLUTION.
Market Price + Broker’s Total Cost
(No. of Shares x Market Price/Share) Commission
1000 x ₱1.75 = ₱1,750.00 ₱75.00 ₱1,825.00
2000 x ₱0.94 = ₱1,880.00 ₱94.00 ₱1,974.00
500 x ₱30.55 = ₱15,275.00 ₱763.50 ₱16,038.50
100 x ₱106.00 = ₱10,600.00 ₱530.00 ₱11,130.00
750 x ₱74.45 = ₱55,837.50 ₱2,792.00 ₱58,629.50
300 x ₱215.00 = ₱64,500.00 ₱3,225.00 ₱67,725.00
Reading the Stock Table

A day’s sales on the stock exchange are shown in leading newspapers the next
day. Some quotations from the Philippine Daily Inquirer for one day are shown below.
TUESDAY, MARCH 10, 2015
Philippine Stock Exchange
(As of March 9, 2015)
52-WK- 52-WK- STOCK OPEN HIGH LOW CLOSE VOLUME
HIGH LOW
75.3 68 Asia United Bank Corp. 70 70 69.4 70 30,800
(AUB)
116 82 BDO Unibank, Inc. 114.2 114.9 113.3 114.3 5,063,820
(BDO)
101.8 84.5 Bank of the Philippine 99.8 100.5 98.45 100.5 3,090,470
Islands (BPI)
57.19 45.8 China Banking Corp. 47.5 47.5 47 47.35 45,600
(CHIB)
31.6 23.55 East West Banking Corp. 25.6 25.6 25.35 25.4 82,400
(EW)
99.15 76.95 Metropolitan Bank and 94.5 94.55 93.5 93.85 8,783,450
Trust Co. (MBT)
75 30 Philippine Bank of 32 32.95 32 32.95 5,200
Communications
(PBCOM)
24.4 18.02 Philippine Business Bank 18.2 18.6 18.38 18.4 131,600
(PBB)
94.95 76.5 Philippine National Bank 83.5 84 83.25 83.3 26,660
(PNB)
139 95 Philippine Savings Bank 95.4 95.4 95.4 95.4 1,220
(PSB)
59 45.7 Rizal Commercial 47 47 46.4 46.4 240,200
Banking Corp. (RCB)
172 105.1 Security Bank Corp. 167 172 166 169.4 2,217,110
(SECB)
78.79 66 Union Bank of the 70 70 69.5 69.5 8,480
Philippines (UBP)
The column headings indicate the meaning of the numbers across the row. We
will use these headings and the first row of the table to explain each column.
STOCK The heading STOCK gives the company name Asia United Bank with
Asia United its symbol (AUB). Usually, the heading SYM (for symbol) is a separate
Bank Corp. heading.
(AUB)
52-WK- The heading 52-WEEK HIGH gives the highest price at which AUB stock
HIGH traded during the past 52 weeks. This price is ₱75.30 per share and
75.3 means that during the past 52 weeks, an investor paid ₱75.30 for a share
of stock.
52-WK- The heading 52-WEEK LOW gives the lowest price at which AUB stock
LOW traded during the past 52 weeks. This price is ₱68.00.
68
OPEN The heading OPEN stands for the opening price at which AUB stock
traded yesterday. This number is 70. Yesterday, AUB stock trading
70 opening price was ₱70.00 per share.
HIGH The heading HIGH refers to the highest price at which AUB stock traded
yesterday. This number is 70. Yesterday, AUB stock trading
70 opening price was ₱70.00 per share.
LOW The heading LOW refers to the lowest price at which AUB stock traded
yesterday. This number is 69.4. Yesterday, AUB stock trading
69.4 opening price was ₱69.40 per share.
CLOSE The heading CLOSE refers to the price at which shares of AUB traded
when the stock exchange closed yesterday. This number is 70.
70 Yesterday, AUB’s closing price was ₱70.00 per share.
VOLUME The heading VOLUME refers to sales volume. This is the number of
shares traded yesterday. This number is 30,800. This means that
30,800 yesterday, there were 30,800 shares traded.
Other headings which are also part of a stock table are Yld%, Net Chg, and PE.

The heading Yld% refers to percent yield. A percent yield of 2% means that the
dividends alone give the investors an annual return of 2%.
The heading Net Chg refers to net change. This is the change in price from the
market close two days ago to yesterday’s market close.
EXAMPLE 4.3. Reading Stock Table

52-WK- 52-WK- STOCK OPEN HIGH LOW CLOSE VOLUME
HIGH LOW
31.6 23.55 East West Banking Corp. 25.6 25.6 25.35 25.4 82,400
(EW)
Use the stock for East West Banking Corp (EW) to answer the following questions.
a. Give the highest and lowest prices for the past 52 weeks.
b. Give the highest and lowest prices for EW shares yesterday.
c. What was the price at which the EW shares traded when the stock exchange closed
on March 9, 2015?
SOLUTION.
a. To find the highest price for the past 52 weeks, look under the heading 52-WEEK
HIGH. The price is given as 31.6 Thus, the highest price for a share of stock for the past
52 weeks was ₱31.60. To find the lowest price for the past 52 weeks, look under the
heading 52-WEEK LOW. The number given is 23.55. Thus, the lowest price for a share
of EW stock for the past 52 weeks was ₱23.55.
b. Looking at the heading HIGH and LOW, we have the numbers 25.6 and 25.35,
respectively. Thus, the highest and lowest prices for EW shares last March 9, 2015, were
₱25.60 and ₱25.35, respectively.
c. Looking under the heading CLOSE, the number given is 25.4. Thus, when the stock
exchange closed last March 9, 2015, the price of a share of EW stock was ₱25.40.
EXAMPLE 4.4.
Use the March 9, 2015 trading published by the Inquirer to answer the following.
a. During the past 52 weeks, which stock in the table sold at the highest price? At the
lowest price?
b. How many shares of PBB were traded on March 9, 2015?
c. For which stocks was the close price also the lowest and highest price for the day?
SOLUTION.
a. During the past 52 weeks, the Security Bank Corp. stock sold at the highest price,
₱172.00; and the Philippine Business Bank stock sold at the lowest price, ₱24.40.
b. By looking under the heading VOLUME, referring to sales volume, the number on the
table is 131,600. This means that a total of 131,600 shares were traded.
c. The PSB stock and the UBP stocks have close prices which are also the lowest prices.
The PBCOM, PSB, BPI, and AUB stocks have close prices which are also the highest
prices.
4.2. Stock Income

DIVIDENDS
The income the stockholder receives from his investment is the amount of dividend
he gets. The amount of dividends paid by the company depends on the profit the company
makes. The dividend may be shown either as a percent of the par value of the stock or
as an amount of money per share. For example, the Traditional Wine Technologies, Inc.
declared a dividend of 1.5% of the par value. Since the par value of the shares is ₱50.00,
the amount of dividend on each share is 1.5% of ₱50.00 or ₱0.75. The Traditional Wine
Technologies, Inc. may declare either a dividend of 1.5% or a dividend of ₱0.75 per share.
Thus, Mr. Durano who owns 100 shares of Traditional Wine Technologies, Inc. will
receive a total dividend of ₱75.00 (₱0.75 x 100 = ₱75.00)
EXAMPLE 4.5.
Ricone owns 75 shares of Netflix common stock, par value ₱400.00. If the
corporation declaration a 7.25% dividend, what is the total dividend that Ricone should
get?
SOLUTION.

Dividend per share: 0.0725 × ₱400 = ₱29 dividend on one share
Total dividend: 75 × ₱29 = ₱2,175.00
EXAMPLE 4.6.
Find the yearly income Aira will receive from an investment in 1000 shares of Apple
stock if a dividend of ₱14.80 per share is paid quarterly.
SOLUTION.
Dividend for one quarter: 1000 × ₱14.80 = ₱14,800
Yearly income: 4 × ₱14,800 = ₱59,200.00
The rate of income on a stock investment is the ratio of the annual dividends to
the total cost of stock.
𝑎𝑛𝑛𝑢𝑎𝑙 𝑑𝑖𝑣𝑖𝑑𝑒𝑛𝑑𝑠 Equation 4.2
𝑟𝑎𝑡𝑒 𝑜𝑓𝑖𝑛𝑐𝑜𝑚𝑒 =
𝑡𝑜𝑡𝑎𝑙 𝑐𝑜𝑠𝑡 𝑜𝑓 𝑠𝑡𝑜𝑐𝑘
If Joela owns a share of stock that costs ₱960 and pays quarterly dividend if
₱22.40, the rate of income is 9.33%
22.40 × 4
𝑟𝑎𝑡𝑒 𝑜𝑓𝑖𝑛𝑐𝑜𝑚𝑒 = = 0.0933 𝑜𝑟 9.33%
960
SELLING STOCKS
Another way a shareholder earns an income is to sell his stock. A broker may be
used to buy or sell stocks. The broker’s representatives take charge of the investor’s
order. However, selling a stock will either make a profit, break-even, or take a loss. A
profit, break-even, or loss depends on the total cost of the stock, the selling price of the
stock, and the expenses in selling the stock. Some expenses to be considered are
commission of the broker, small SEC (Securities and Exchange Commission) fees, and
sometimes transfer tax. After deducting all the expenses form the market price of the
stock, the money that you will receive is called the net proceeds.
EXAMPLE 4.7.
Find the net proceeds of the stocks on the table below.

Name of Stock Shares Selling Expenses Net
Held Price per (Commission, Proceeds
Share Taxes, and Fees)
Food Corporation 100 ₱1,040.00 ₱2,640.00
Property Holdings 250 ₱500.00 ₱1,720.00
Power Corporation 80 ₱1,480.00 ₱1,880.00
Transportation Corporation 300 ₱320.00 ₱2,240.00
SOLUTION
To calculate for the net proceeds, use
Net Proceeds = Market Price – Expenses
where
Market Price = No. of shares x Selling Price
Power Corporation Net Proceeds = (100 x ₱1040) - ₱2640 = ₱101,360.00

Property Holdings Net Proceeds = (250 x ₱500) - ₱1720 = ₱123,280.00
Food Corporation Net Proceeds = (80 x ₱1480) - ₱1880 = ₱161,520.00
Transportation Corporation Net Proceeds = (300 x ₱320) - ₱2240 = ₱93,760.00
EXAMPLE 4.8.
If you bought 500 shares of East West Banking Corp. stock at the 52-WEEK LOW,
₱23.55 per share, and sold at the 52-WEEK HIGH, ₱31.60 per share
a. how much money did you make on this transaction (ignoring dividends)?
b. find the broker’s commission if the broker charges 2% of the total sale price.
SOLUTION
a. Calculate the difference between low price per share and the high price per share.
₱31.60 − ₱23.55 = ₱8.05
Thus, you made ₱8.05 per share. For 500 shares you made, ₱8.05 x 500 or ₱4,025.00.
b. Because you are selling the stock at ₱31.60 x 500 or ₱15,800.00 and the broker
charges 2% of the total sale price; thus,
₱15,800 × 0.02 = ₱316
The broker received ₱316.00 as his commission.
Consider the following when you want to invest on stocks:

1. Be a smart investor. Only buy shares of stocks of companies who are earning big
money consistently. The efficient market theory and the stock index will guide you on
this aspect.
The efficient market theory states that the stock market reacts very fast to any
information and at any given period, the market contains the total views of all the investors
in the market. Thus, the proponents of the theory believe that the current price of a stock
is the accurate reflection of the investors’ knowledge about the stock.
A stock index or stock market index is the same measure of value of a section
of the stock market and is computed from the price of selected stocks. Investors and
financial managers use this to describe the market and compare the return on specific
investment. The daily result of stock indexes are the most popular numbers cited in the
investing world.
2. Decide whether you will need a full-service broker, a discount broker, or online
brokerage. In online brokerage, you are allowed to trade stocks directly without a broker.
Opening an online trading account is very similar to opening a normal savings account.
4.3. Bonds
A bond is a form of long-term investment issued by a corporation or government
where the purchaser becomes a creditor of the company. People who buy a bond are
lending money to the corporation from which they buy the bond. Hence, a bond is very
much like a loan. When a corporation is selling a bond, it is really selling an IOU, which
is a promise to payback the buyer his money, plus interest at a particular time.
There are several reasons for issuing bonds. For example, if the Traditional Wine
Technologies, Inc. (TWTI) wants to borrow ₱50,000,000.00 for 5 years for the expansion
of their business. So, it issues 50,000 5-year bonds with a face value of ₱1,000.00 each.
The entire issue is often sold to an investment banking house, the bank then sells the
bonds to investors at a slight increase in price over what it paid for them. In this case, the
banking house may buy then for TWTI at ₱995.00 each and then sell them at ₱1,000.00
each to the investors.

The bonds that are issued are the corporation’s written promise to return the price
an investor pays for the bond at the time it was purchased, called the face value, together
with interest payments at a given rate.
In Figure 4.2, Mr. Brian Salise, the bond holder, lent TWTI one thousand pesos
(₱1,000.00) with interest rate of 10% per annum. Hence, on March 1, 2026, TWTI must
pay Mr. Salise whether it made profit or not. If the loan is not repaid, the bond holders
may take the corporation’s equipment, buildings, or land. This guarantee is an agreement
between the corporation and a bank or trust company, called the trustee. The trustee is
appointed by the corporation to represent the bond holders as a group in their transactions
with the corporation.
The following should be considered when buying bonds.
1. The price of the bond
Figure 4.2. Example of a Bond Certificate (Again, I just made this up.)
2. The interest rate

3. Whether the bonds can or cannot be resold

4. The earnings record of the issuer
5. The credit history of the issuer
6. The business condition
Note: Riskier businesses offer higher rates of interest to convince investors to buy their
bonds. There are ratings for bonds which are based on a company’s past performance
and whether analysts predict the company will do well or poorly. Bonds are rated as: Aaa
or AAA for the best and safest bonds. Bbb or BBB for riskier bonds. Ccc or CCC for very
risky bonds. Bonds rated D are considered worthless.
DEFINITION OF TERMS
Bond – a form of long-term promissory note issued by a corporation or government in
exchange for a sum of money.
Bond holder – one who holds a corporation or government bond.
Bonds have two kinds of values: par value and market value. The par value of
the bond is the same as its face value. This is the amount printed on the face of the bond
which the borrower promises to pay the bond holder on the due date. In the given
corporation bond, showing the bond holder Mr. Brian Salise, the par value is ₱1,000.00.
The market value of a bond is the price at which the bond is being sold. It may be greater
than or less than the amount of the par value. If the market value is greater than the par
value, then the bond is selling at a discount.
The market price of a bond is computed by multiplying the par value by the percent
of the par value. Note that “95” means 95% of the par value of the bond. For example, if
the banking house offers TWTI bonds at 98, the price of one of the corporation’s
₱1,000.00 bonds is 98% of ₱1,000.00 or ₱980.00. However, if the quoted price of a bond
is 105, the price of a ₱1,000.00 would be 105% of ₱1,000.00 or ₱1,050.00.
EXAMPLE 4.9.
Find the market price of one ₱1,000.00 bond at each quoted price.
a. 98 b. 96 c. 102 d. 101¾ e. 99½ f. 106¼

SOLUTION
a. at 98: 0.98 × ₱1,000.00 = ₱980.00
b. at 96: 0.96 × ₱1,000.00 = ₱960.00
c. at 102: 1.02 × ₱1,000.00 = ₱1,020.00
d. at 101¾ 1.0175 × ₱1,000.00 = ₱1,017.50
e. 99½ 0.995 × ₱1,000.00 = ₱995.00
f. 106¼ 1.0625 × ₱1,000.00 = ₱1,062.50
Note: The bonds in a, b, and e are selling at discounts and the bonds in c, d, and f are
selling at premiums.
To find the total investment in bonds, you need to know the market price if one
bond and multiply the number of bonds bought.
EXAMPLE 4.10.
Ms. Haziel Hulguin bought fifty ₱1,000.00 TWTI bonds at 103. What is her total
investment in TWTI bonds?
SOLUTION.
Market Price of 1 bond: 1.03 × ₱1,000.00 = ₱1030.00
Total investment: 50 × ₱1,030.00 = ₱51,500.00
When bonds are bought and sold through a broker, the broker charges a broker’s
commission or brokerage fee. Hence, the amount of investment becomes the market
price of the bonds plus the broker’s commission.
EXAMPLE 4.11.
Kezia Garcia bought five ₱1000.00 MacQue Outback Corporation bonds at 92 plus
₱10.00 commission per bond through a broker. What is Kezia’s amount of investment?
SOLUTION.
Market Price of 1 bond: 0.92 × ₱1,000.00 = ₱920.00
Market Price of 5 bond: 5 × ₱920.00 = ₱4,600.00
Commission on 5 bonds: 5 × ₱10.00 = ₱50.00

Total investment: ₱4,600.00 × ₱50.00 = ₱4,650.00
Bond Income
The interest given by the corporation as a government unit who issued the bond
serves the income from the bond. The interest of the bond is based on the par value.
Because the par value serves as the principal, the interest formula can be calculated as:
Interest = Par value x Rate x Time
The interest for five years on a ₱1000.00 par value, 10% bond would be ̈́₱500.00.
If the interest is paid semiannually, the amount of each interest for the said bond is
500⁄(2)(5) or ₱50 semiannual interest.
EXAMPLE 4.12.
Ms. Sabio owns 45 bonds with a par value of ₱1000.00 each and pays 8½%
interest. What annual income does Ms. Sabio get from these bonds?
SOLUTION.
Par value of 45 bond: 45 × ₱1,000.00 = ₱45,000.00
Interest: ₱45,000.00 × 0.085 × 1 = ₱3,825.00
The annual income is ₱3,825.00
Before buying bonds, it is important to know what rate of income you will receive
from them. Hence, this will help you compare bonds with other types of investments.
The rate of income is the ratio of the annual income to the total investment. This is
often called yield.
EXAMPLE 4.13.
Find the yield on ₱1000.00, 9% TWTI bond priced at 94 plus ₱10 commission.
SOLUTION.
Annual income: ₱1,000.00 × 0.09 × 1 = ₱90.00
Amount invested: Market price + commission
0.94 × ₱1,000.00 + ₱10 = ₱950.00

90
Yield (rate of income) = 950 = 0.0947 = 9.47%
The yield on the investment is 9.47% or TWTI bond yields 9.47%

DECEMBER 5, 2022 ABM & HUMSS
DECEMBER 6, 2022 AS & ICT
Quiz 4
STOCKS AND BONDS
Name_____________________________________ Subject Teacher ______________
COMPLETE THE TABLES FOR THE MISSING DETAILS. SHOW YOUR

SOLUTIONS.
No. of Stock Market Broker’s Total Cost

Shares Price Commission
98 Beiter Coporation ₱93.50 ₱9,621.15
Hoyt Industries, Inc. ₱87.00 ₱1,957.50 ₱41,107.50
2000 Fivics Holdings, Corp ₱10,300.00 ₱216,300.00
60 Stark Properties, Inc. ₱99.75 ₱299.25
Front Westeros Corp. ₱78.50 ₱981.25 ₱20,606.25
Find the investment by completing the table. The brokerage fee is ₱240 for each bond if
5 bonds are purchased, ₱200 for each bond if 6 to 49 are purchased, and ₱60 for each
bond if 50 or more bonds are purchased.
Number of Market Value per Bond Brokerage Fee per Investment

Bonds Held Bond
17 ₱2,220
8 ₱1,725
85 ₱1,570
67 ₱1,995

25 ₱2,060
Application 4
STOCKS AND BONDS
Direction: Indicate the Given, Required, and show your Solutions. 10 points each.
1. Rose bought 400 shares of SBC stock at its 52-week low, ₱781.20 per share, and
sold at 52-week high, ₱1310.00 per share.
a. How much did Rose make on this transaction, dividends not included?
b. Find the broker’s commission if the broker charges 3.2% of the total sale price.
2. Mr. Quipanes bought 200 shares of stock for ₱750.00 per share.
a. Find the cost of the stock.
b. How much commission did the broker get if he charged 2% of the cost of the stock?
3. A ₱200,000.00 bond, paying interest as 8½% was bought at ₱160,000.00 plus

₱200.00 commission. What is the rate of income on the investment?
LESSON 5
5. PROPOSITIONS, SYMBOLS, AND TRUTH TABLES


1. Illustrates and symbolizes propositions.
2. Distinguishes between simple and compound propositions
3. Performs the different types of operations on propositions.
4. Determines the truth values of propositions.
1. Illustrate and symbolizes propositions.
2. Distinguish between simple and compound propositions
3. Perform the different types of operations on propositions.
4. Determine the truth values of propositions.
your answer sheets.
7. Enjoy learning!
Logic is defined as “the science of correct reasoning.” Aristotle (384 – 322 B.C.) is
one of the earliest logicians and one of the most renowned. He was the student of Plato
and the tutor of Alexander the Great. His logic was used to distinguish valid arguments
from invalid arguments. In this lesson, we will apply the key concepts of propositional
logic, syllogisms, and fallacies in real-life arguments.
5.1. Propositions
Before we dive right into the lesson, we must review our English lesson about
sentences a bit.
Kinds of Sentences

1. Simple sentence is a sentence that has one independent clause.
2. Compound sentence is a sentence that contains two or more independent clauses
joined by conjunctions (for, nor, but, or, yet, so), semicolons, or semicolon followed by a
conjunctive adverb.
3. Complex sentence is a sentence that contains one independent clause and one or
more dependent clauses.
4. Compound-complex sentence is a compound sentence with one or more
independent clauses.
According to the purpose of the speaker or writer, sentences are classified as
follows:
1. Declarative sentence is used to make statement of fact, wish, intent, or feeling.
Example: I wish my students would do well this quarter.
2. Imperative sentence is used to state a command, request, or direction.
Example: Please do not copy your poem on the Internet.
3. Interrogative sentence is used to ask a question.
Example: Did you create your own poem?
4. Exclamatory sentence is used to express strong feelings.
Example: The teacher shouted, “Don’t copy the questions and choices!”
A proposition is a declarative sentence that can be classified as true or false, but
not both
EXAMPLE 5.1.
Decide whether each of the following is a proposition or is not a proposition.
a. The number 4 is even and less than 12.
b. Cagayan de Oro is the capital of Misamis Oriental.
c. How old are you?
d. Open your eyes.
e. John’s solution is incorrect.
SOLUTION.
Sentences a and b are propositions. The truth or falsity of each can be determined
by a direct check. However, sentences c, d, and e cannot be answered as being true or
false. Sentence c is a question, sentence d is a command, and sentence e is a paradox.

There are other types of sentences where true or false values cannot be assigned.
The sentence e is one example. If we assume that it is true, then it is false; if we assume
that it is false, then it is true. Thus, the sentence cannot be classified as either true or
false, so it is not a proposition. A self-contradictory proposition like sentence e is called a
paradox.
DEFINITION OF TERMS
Simple proposition – a proposition that conveys one thought with no connecting words.
Compound proposition – contains two or more simple propositions that are put together
using connective words.
The proposition “Danica is passing in Mathematics” is a simple proposition.
However, “Danica is passing in Mathematics, but she is failing in Social Science” is a
compound proposition. It is a compound proposition because it is a combination of two
simple propositions “Danica is passing in Mathematics” and “She is failing in Social
Science.”
There are several ways in which simple propositions can be combined to form
compound propositions. Different combinations of compound propositions can be formed
by using logical connectives or simply, connectives. Words such as and, or, not, and
if…then are examples of connectives.
If the proposition is compound, then it must be one of the following: conjunction,
disjunction, conditional, biconditional, or negation.
1. Conjunction – Two simple propositions connected using the word and.
Example: “Today is Friday and tomorrow is Saturday.”
Sometimes, the word but will be used in place of and in each sentence.
2. Disjunction – Two simple propositions connected using the word or.
Example: “I will pass the General Mathematics subject, or I will be promoted.”
3. Conditional – Two simple propositions connected using the words if…then.
Example: “If you make an original poem with rhyming words at the end of each
line then you will get 100 points in your final requirement.”
The statement between the if and then is called the antecedent of the conditional.
The sentence that follows then is called the consequent.

The example can also be written as:
a. If you make an original poem with rhyming words at the end of each line, you
will get 100 points in your final requirement.
b. You will get 100 points in your final requirement if you make an original poem
with rhyming words at the end of each line.
In (a), then was omitted but it is understood to be there.
In (b), the two parts are switched around and then was also omitted.
Nonetheless, both (a) and (b) are conditionals.
4. Biconditional – Conjunction of two conditional statements where the antecedent and
consequent of the first statement have been switched in the second statement.
Example: “If two sides of a triangle are congruent, then the angle opposite them
are congruent, and if two angles of a triangle are congruent, then the sides opposite them
are congruent.”
The sentence above is usually stated as “Two sides of a triangle are congruent if
and only if two angles opposite them are congruent.” The abbreviation for if and only if is
iff.
5. Negation – The negation of a given statement is a statement that is false whenever
the given statement is true, and true whenever the given statement is false.
The negation can be obtained by inserting the word not in the given statement or
by prefixing it with phrases such as “It is not the case that…”
The negation of the statement “Sandy is good” can be written as:
“Sandy is not good.” or “It is not the case that Sandy is good.”
EXAMPLE 5.2.
Classify each proposition as simple or compound. Classify each compound proposition
as a negation, conjunction, disjunction, conditional, or biconditional.
a. My friend took his master’s degree in UP Diliman.
b. Roses are red, but violets are blue.
c. You are entitled to a 30% discount if you are a member.

d. Peter was on time, but Khaillah was late for the mass.
e. Either he watches a movie or dines with his friends.
f. If the angle is less than 90°, then it is an acute angle.
SOLUTION.
a. simple d. compound; conjunction
b. compound; conjunction e. compound; disjunction
c. compound; conditional f. compound; conditional
5.2. Symbols
Symbols are used to simplify work in logic. If x and y are the frequently used letters
in algebra, the letters p, q, or r are often used to represent propositions in logic. The table
below shows the several symbols for connectives, together with the respective types of
compound proposition.
Connective Symbol Type of Statement
and ˄ conjunction
or ˅ disjunction
not ~ negation
if…then → conditional
if and only if (iff) ↔ biconditional
EXAMPLE 5.3.
Let p represent the proposition “He has a green thumb” and
q represent the proposition “He is a senior citizen.”
Convert each compound proposition into symbols.
a. He has green thumb, and he is a senior citizen.
b. He does not have green thumb, or he is not a senior citizen.
c. It is not the case that he has green thumb, or he is a senior citizen.
d. If he has green thumb, then he is not a senior citizen.
SOLUTION.
He has green thumb. It is not the case
a. p˄q c. ~ (p ˅ q)
and He is a senior citizen.

or He is a senior citizen
He has green thumb
He does not have green thumb. If he has green thumb.
b. ~p ˅ ~q d. p → ~q
or He is not a senior citizen. then He is not a senior citizen.
EXAMPLE 5.4.
Let p represent “Naomi can swim” and let q be “Herbert plays the guitar.” Write
each symbolic statement is word.
a. p ˅ q b. p ˄ ~q c. ~ (p ˅ q) d. ~ (p ˄ q)
SOLUTION.
a. Naomi can swim, or Herbert plays the guitar.
b. Naomi can swim, and Herbert cannot play the guitar.
c. It is not the case that Naomi can swim, or Herbert can play the guitar.
d. It is not the case that Naomi can swim, and Herbert can play the guitar.
~ (p ˅ q) means the negation of the entire statement p ˅ q. In ~p ˅ q, only
statement p is negated.
Negation of the Disjunction p or q
~ (p ˅ q) means ~p ˄ ~q. Thus, another solution to part c of Example 5.4 is “Naomi
cannot swim, and Herbert cannot play the guitar.”
Negation of the Conjunction p and q
~ (p ˄ q) means ~p ˅ ~q. Thus, another solution to part d of Example 5.4 is “Naomi
cannot swim, or Herbert cannot play the guitar.”
EXAMPLE 5.5.
Write the following in symbolic form:
a. “Kaye is a working student (w) or under 25 years old (u), and lives in Tagoloan (l).”
b. “Kaye is a working student (w), or under 25 years old (u) and lives in Tagoloan (l).”
SOLUTION.
The use of commas indicates which simple statements are grouped together.

a. (w ˅ u) ˄ l b. w ˅ (u ˄ l)
EXAMPLE 5.6.
Identify each proposition as a conjunction, disjunction, negation, conditional, or
biconditional.
a. James is absent or Jimni is absent, and it is submission day.
b. Either Jay passed the test, or Lou passed the test and Jingky failed.
c. It is false that if I go on vacation, then I have received my 13th month pay.
d. If my brother pays the rental and I pay the electricity, then my father pays the tuition
fees.
SOLUTION.
a. As the comma indicates, the proposition is a conjunction.
b. The proposition is a disjunction as the comma indicates.
c. The phrase “It is false” identifies the statement as negation even though it contains
conditional. In the statement, the phrase “It is false that” negates everything that follows.
d. The proposition is a conditional statement because of the word if.
Parentheses in symbolic statements are used to tell what type of statements are
being considered. If there are no parentheses, we follow the dominance of connectives.
The list below gives the connectives in their dominant order (from the strongest to the
weakest).
Biconditional > Conditional > Disjunction, Conjunction > Negation
The conjunction and disjunction are of equal value.
EXAMPLE 5.7.
Identify each symbolic statement as a conjunction, disjunction, negation, conditional, or
biconditional.
a. P ˅ Q ↔ R c. ~ (P ˅ Q) e. ~ (P → Q ˄ R)
b. (P ˄ Q) ˅ R d. ~P ˄ Q → R ˅ S f. P ˄ (Q → R)
SOLUTION.

a. Biconditional: The double arrow is the dominant connective and there are no
parentheses.
b. Disjunction: The parentheses separate the statement at the “˅” connective.
c. Negation: The statement is inside the parentheses.
d. Condition: There are no parentheses. Thus, the conditional arrow is stronger than any
of the other connectives. The antecedent is ~P ˄ Q and the consequent is R ˅ S.
e. Negation: The negative sign is outside the parentheses and the conditional arrow is
inside the parenthesis.
f. Conjunction: The parentheses separate the statement at the “˄” connective.
Table Diagram
All No (none)
Statement Negation
All items are for sale. Some books are not for sale.
No items are for sale. Some items are for sale.
Some are Some are not

(There is at least one.)
EXAMPLE 5.8.
Write the negation of each statement.
a. All bottles have labels.
b. All students will get the second chance.
c. No student in uniform can enter the Internet café.
c. Some participants are more active than the organizers.

SOLUTION.
a. Some bottles have no labels; or Not all bottles have labels.
b. Some students will not be given the second chance; or Not all students will not be given
the second chance.
c. Some students in uniform can enter the Internet café.
c. No participants are more active than the organizers.
5.3. Truth Tables

A teacher promised his student, “If you pass the final examination and submit all
the requirements, then you may join the graduation.” The student passes only the final
exam, but the teacher allows the student to join the graduation. Has the teacher broken
his original promise? I’ll leave this here for you to return to later.
In logic, we use variables to represent propositions in the same way that we use
variables to represent numbers in algebra. While a variable in algebra can take any value,
a variable in logic has only True or False for its value. In fact, True and False are the
“numerical constants” of logic.
Conjunctions
The connective and implies the idea of “both”. For the conjunction p ˄ q to be true,
both p and q must be true. All the four possible combinations of truth values for the
conjunction p and q are summarized by a table called a truth table.
Table 5.1. Truth Table for the Conjunction P and Q (P ˄ Q)
P Q P˄Q Table 5.1 answers the question, “When is a
T T T
T F F conjunction true?” For the conjunction to be true,
F T F both P and Q must be true.
F F F
EXAMPLE 5.9.
Let p represent “7 > 5” and let q represent “12 < 0.” Find the truth value of p and q.
SOLUTION. P Q P˄Q
The statement 7 > 5 is true. Hence, p is true. T T T
T F F
The statement 12 < 0 is true. Hence, q is false. F T F
The second row of the conjunction truth table shows that p F F F
˄ q is false.

Disjunctions
If China says that she has been reading or writing, then she is telling the truth if
she has been reading and not writing. Likewise, she is telling the truth when she has been
writing and not reading. Also, she is telling the truth when she has been reading and also
writing. Table 5.2 shows the truth table for disjunction. The use of or in this case is called
the inclusive or (inclusive disjunction).
Table 5.2. Truth Table for the Inclusive Disjunction P or Q (P ˅ Q)

P Q P˅Q
T T T
T F T
F T T
F F F
EXAMPLE 5.10.
Let p be “I will clean the kitchen.” and q be “I will clean the bathroom.”
Form the inclusive disjunction of p and q and discuss its truth values.
SOLUTION.
The statement, “I will clean the kitchen, or I will clean the bathroom” is the required
disjunction. It will be false only if both components are false and will be true otherwise
(see Table 5.2).
EXAMPLE 5.11.
Let p be “I will pass the math quiz.” and q be “I will flunk the math quiz.”
Form the disjunction of p and q and discuss its truth values.
SOLUTION.
“I will pass the math quiz, or I will flunk it” is the desired disjunction. The statement will
only be true when exactly one of the two components is true. Otherwise, it will be false.

When this is the case, we shall refer to the or used as the exclusive or or the exclusive
disjunction. Its truth table is given in Table 5.3.
Table 5.3. Truth Table for the Exclusive Disjunction P or Q (P ˅ Q)
P Q P˅Q
T T F
T F T
F T T
F F F
Exclusive or
One or the other, not both. Unless otherwise meant or stated, a disjunction is
considered inclusive by default.
Negation
If P is a simple proposition, then P is either true or false but not both. That is, if P
is a true statement, then its truth value is true and if P is false, then its truth value is false.
If we negate P and P is true, then ~P must be false, and if P is false, then ~P must
be true. This type of analysis is shown in Table 5.4.
Table 5.4. Truth Table for a Simple Proposition’s Negation (~)
P ~P
T F
F T
EXAMPLE 5.12.
Construct a truth table for
a. ~ (P ˄ Q) b. ~ (P ˅ Q) c. ~ (P ˅ ~Q)
SOLUTION.
a. i. List the truth values of the variables ii. Complete the column for the connective ˄
P and Q ~ (P ˄ Q).
P Q P ˄ Q ~ (P ˄ Q) P Q P ˄ Q ~ (P ˄ Q)
T T T T T
T F T F F
F T F T F
F F F F F
iii. Complete the truth table by negating iv. Steps can be summarized as shown

the statement inside the parentheses below:
(the conjunction)
P Q P ˄ Q ~ (P ˄ Q) P Q P ˄ Q ~ (P ˄ Q)
T T T F T T T F
T F F T T F F T
F T F T F T F T
F F F T F F F T
b. i. List the truth values of the variables ii. Complete the column for the connective ˅
P and Q ~ (P ˅ Q).
P Q P ˅ Q ~ (P ˅ Q) P Q P ˅ Q ~ (P ˅ Q)
T T T T T
T F T F T
F T F T T
F F F F F
iii. Complete the truth table by negating the statement inside the parentheses (the
disjunction)
P Q P ˅ Q ~ (P ˅ Q)
T T T F
T F T F
F T T F
F F F T
c. List the truth values of the variables P and Q (  & )

Complete Column  by negating Q.
P Q ~Q P ˄ ~Q ~ (P ˄ ~Q)
Complete Column  (P ˄ ~Q). T T F F T
T F T T F
Complete Column  by negating (P ˄ ~Q)
F T F F T
(Column ). F F T F T
    
We constructed truth table for conjunction,
disjunction, and negation. The procedure given below will help you construct any truth
table containing compound statement.
Constructing Truth Tables

1. Determine if the final result is a conjunction, disjunction, or negation. Recall dominant
connectives and the use of parentheses.
2. Complete the columns under a) the simple statements (P, Q, …)

b) the connectives negations inside parentheses
c) any remaining statements and their negations
d) any remaining connectives
reaching the final column determined in Step 1.
Number the columns in the order they are completed and highlight the column containing
the final answer.
3. The truth table of compound proposition of n component statements, each represented
by a different letter, has 2n number of rows. For example,
A compound proposition with two different letters (simple statements) has 2 2 or 4 rows.
A compound proposition with three different letters (simple statements) has 23 or 8 rows.
EXAMPLE 5.13.
Construct a truth table for
a. P ˅ ~Q b. ~ (~P ˄ Q) c. Q ˄ ~ (P ˅ Q)
SOLUTION.
a. The final result is a disjunction.
• Complete the columns under the simple statements
P Q ~Q P ˅ ~Q
P and Q in Columns 1 and 2. T T F T
• Negate statement Q to get entries in Column 3, T F T T
F T F F
• Finally, combine Column 1 (P) and Column 3 (~Q) F F T T
using the connective ˅ to get the truth value for P ˅    
~Q. Write the result in Column 4.
b. The final result is a negation.

P Q ~P ~P ˄ Q ~ (~P ˄ Q)
T T F F T
T F F F T
F T T T F

• Complete the columns under the simple F F T F T
    
statements P and Q in Columns 1 and 2.
• Negate statement P to get entries in Column 3,
• Combine columns 2 and 3 using the connective ˄ to get the truth value of ~P ˄ Q.
Write the result in Column 4.
• Finally, negate the truth value in Column 4 to get ~ (~P ˄ Q) in Column 5.
c. The final result is a conjunction.

• Complete the columns under the simple statements P and Q in Columns 1 and 2.
• Combine columns 1 and 2 using the connective ˅ to get the truth value of P ˅ Q.
• Negate the truth value in Column 3
P Q P ˅ Q ~ (P ˅ Q) Q ˄ ~ (~P ˅ Q)
to get entries in Column 4, T T T F F
• Finally, combine columns 2 and 4 T F T F F
F T T F F
using the connective ˄ to get F F F T F
entries in Column 5 [Q ˄ ~ (P ˅ Q)].     
EXAMPLE 5.14.
Let P be “Arc is a senior high school student,” and let Q be “Arc is over 16 years old.”
Under which condition or conditions is the statement:
a. “Arc is a senior high school student and over 16 years old” true?
b. “Arc is a senior high school student and over 16 years old” false?
c. “Arc is a senior high school student or over 16 years old” true?
d. “Arc is a senior high school student or over 16 years old” false?
e. “Arc is neither a senior high school student nor over 16 years old” true?
SOLUTION.
a. The statement can be symbolized by P ˄ Q. From Table 5.1, we saw that P ˄ Q is true
only when both P and Q are true.

b. In symbol, we have P ˄ Q. Using Table 5.1, this can be false under the following
situations:
- P is true and Q is false. (Arc is a senior high school student and not P Q P˄Q
T T T
over 16 years old). T F F
- P is false and Q is true. (Arc is not a senior high school student and F T F
F F F
over 16 years old).
- P is false and Q is false. (Arc is neither a senior high school student nor over 16 years
old).
c. In symbol, the given statement is P ˅ Q. From Table 5.2, we saw that P ˅ Q is true
when both P and Q are not false.
d. The given statement is symbolized by P ˅ Q. From Table 5.2, we see that P ˅ Q is
false if both P and Q are false.
e. The given statement is symbolized by ~P ˅ ~Q. The P Q ~P ~Q ~P ˅ ~Q
T T F F F
truth table for ~P ˅ ~Q is shown on the right. The table T F F T F
shows that ~P ˅ ~Q is true when at least one of P and F T T F F
F F T T T
Q is false.     
Truth Tables for Conditional and Biconditional

Conditional
P → Q is false only when P is true and Q is false; otherwise, it is true.
Table 5.5. Truth Table for Conditional Statement (P→Q)
P Q P→Q
T T T
T F F
F T T
F F T
EXAMPLE 5.15.
Construct a truth table for each of the following:
a. P → ~Q b. ~P → Q c. P ˅ (Q → ~P)
SOLUTION.

a.
• The dominant connective is →
P Q ~Q P→~Q
• Complete the columns under the simple statements P
T T F F
and Q in Columns 1 and 2 T F T T
F T F T
• Negate statement Q to get entries in Column 2. F F T T
• Finally, combine Columns 1 and 3 using the connective    
→ to get the truth values for P → ~Q. Write the result in Column 4.
b.
• The dominant connective is →
P Q ~P ~P→Q
• Complete the columns under the simple statements P and
T T F T
Q in Columns 1 and 2 T F F T
F T T T
• Negate statement P to get entries in Column 3.
F F T F
• Finally, combine Columns 2 and 3 using the connective    
→ to get the truth values for ~P→Q. Write the result in Column 4.
c.
• The dominant connective is ˅.
• Complete the columns under the simple P Q ~P Q→~P P ˅ (Q→~P)
statements P and Q in Columns 1 and 2 T T F F T
T F F T T
• Negate statement P to get entries in F T T T T
Column 3. F F T T T
    
• Combine Columns 2 and 3 using the
connective →. Write the result in Column 4
• Finally, combine Columns 1 and 4 using the connective ˅ to get the truth values
for P ˅ (Q → ~P). Write the result in Column 5.
EXAMPLE 5.16.
Find the truth value of each statement.
a. If 3 + 3 = 9, then 33 = 6. c. If 5 is a whole number, then 7 is a real number
b. If 3 + 3 = 6, then 12 = 7.
SOLUTION.
a. Let P represent “3 + 3 = 9,” and Q represent “33 = 6.” Since 3 + 3 = 9 is false and
33 = 6 is false, then P→Q is true.
b. Let P represent “3 + 3 = 6,” and Q represent “12 = 7.” Since 3 + 3 = 6 is true and
12 = 7 is false, then P→Q is false.
c. Let P represent “5 is a whole number,” and Q represent “7 is a real number.” Since
“5 is a whole number” is true and “7 is a real number” is true, then P→Q is true.
EXAMPLE 5.17.
Find all the values of x that will make each sentence true.
a. If 4 + 4 = 8, then x – 4 = 7. c. If x + 4 = 10, then 5 + 4 = 9.
b. If 4 + 4 = 44, then x – 4 = 7. d. If x + 4 = 10, then 5 + 4 = 20.
SOLUTION.
a. Let P and Q represent the antecedent and consequent for each statement. The
conditional statement P→Q where P is true (4 + 4 = 8) is only true when Q is also
true. Thus, x must be 11 for the sentence to be true.
b. The conditional statement P→Q, where P is false (4 + 4 ≠ 44), is true whenever Q
is either true or false. Thus, x can be any value for P→Q to be true.
c. The conditional statement P→Q, where Q is true (5 + 4 = 9), is true whenever P is
either true or false. Thus, x can be any value for P→Q to be true.
d. The conditional statement P→Q, where Q is false (5 + 4 ≠ 20), can be true
whenever P is false. Thus, x must not be equal to 6 for P→Q to be true.
Biconditional
P↔Q is true when and only when P and Q have the same truth value.

Table 5.6. Truth Table for Biconditional Statement (P↔Q)
P Q P↔Q
T T T
T F F
F T F
F F T
EXAMPLE 5.18.
Construct the truth table for each statement:
a. (P ↔ Q) ↔ (~P → Q) b. (P ˄ Q) ↔ (P → ~Q) c. (P → Q) ↔ (~P ˅ Q)
SOLUTION.
a.
• The dominant connective is ↔.
• Complete the columns under P Q ~P P→Q ~P→Q (P↔Q)↔(~P→Q)
the single statements P and T T F T T T
T F F F T F
Q. F T T T T T
• Negate statement P to get F F T T F F
     
entries in Column 3.
• Combine Columns 1 and 2 using the connective → to get values for P → Q. Write
the result in Column 4
• Combine Columns 3 and 2 using the connective → to get values for ~P → Q. Write
the result in Column 5
• Finally, combine Columns 4 and 5 using the connective ↔ to get the truth values
for (P ↔ Q) ↔ (~P → Q). Write the result in Column 6.
b.
• Complete the columns under P Q ~Q P˄Q P→~Q (P˄Q)↔(P→~Q)
the single statements P and Q. T T F T F F
T F T F T F
• Negate statement Q to get F T F F T F
entries in Column 3. F F T F T F
     
• Combine Columns 1 and 2
using the connective ˄ to get the truth values for P˄Q. Write the result in Column
4.
• Combine Columns 1 and 3 using the connective → to get the truth values for
P→~Q. Write the result in Column 5.
for (P ˄ Q) ↔ (P → ~Q). Write the result in Column 6.
c.
• Complete the columns under P Q ~P P→Q ~P˅Q (P→Q)↔(~P˅Q)
the single statements P and Q. T T F T T T
T F F F F T
• Negate statement P to get F T T T T T
entries in Column 3. F F T T T T
     
• Combine Columns 1 and 2
using the connective → to get the truth values for P→Q. Write the result in Column
4.
• Combine Columns 3 and 2 using the connective ˅ to get the truth values for ~P˅Q.
for (P → Q) ↔ (~P ˅ Q). Write the result in Column 6.

DECEMBER 12, 2022 ABM & HUMSS
DECEMBER 13, 2022 AS & ICT
Quiz 5
PROPOSITIONS, SYMBOLS, AND TRUTH TABLES
Direction: Answer the following items as instructed. Write your answer on a yellow
paper.
Let B = Brenda is smart and M = Marites is smart and let us agree that stupid = not
smart. Write each of the following statements in symbolic form.
1. Both Brenda and Marites are smart.
2. Either Brenda or Marites is smart.
3. It is false that Brenda is stupid.
4. If Brenda is smart, then Marites is stupid.
5. Brenda is not smart, or Marites is stupid.
Let M = Mathematics is difficult, P = PE is easy, and B = Biology is interesting. Write

each statement in words.
6. M ˄ P 8. P → ~B 10. M ˄ P → B
7. P ˅ B 9. M ˄ (P ˅ B)
Copy and complete the truth table for the given statement by filling in the required
columns. (12 points)
(P ˄ ~Q) → (P ˄ ~Q)
P Q ~Q P ˄ ~Q (P ˄ ~Q) → (P ˄ ~Q)
T T
T F
F T
F F
Application 5
PROPOSITIONS, SYMBOLS, AND TRUTH TABLES
Direction: Follow the instructions carefully.

DO NOT DO ANYTHING. PUT THIS MODULE DOWN AND RELAX.
MERRY CHRISTMAS AND A HAPPY NEW YEAR!

LESSON 6
6. CONDITIONAL PROPOSITIONS, TAUTOLOGIES, AND

FALLACIES
1. Illustrates the different forms of conditional propositions.
2. Illustrates the different types of tautologies and fallacies.
3. Determines the validity of categorical syllogisms.
4. Establishes the validity and falsity of real-life arguments using logical
propositions, syllogisms, and fallacies.
1. Illustrate the different forms of conditional propositions.
2. Illustrate the different types of tautologies and fallacies.
3. Determine the validity of categorical syllogisms.
4. Establish the validity and falsity of real-life arguments using logical propositions,
syllogisms, and fallacies.
your answer sheets.
7. Enjoy learning!

6.1. Conditional Statements
A conditional statement has two parts: a hypothesis (or antecedent), denoted by
P, and a conclusion (or consequent), denoted by Q. In symbols, the statement, “If P,
then Q” is written as P→Q. Here is another example”
If it is 9:30 a.m., then it must be daytime.
P Q
A conditional statement may be true or false. To show that a conditional statement
is false, you only need to find one example (called a counter example) in which the
hypothesis is fulfilled, and the conclusion is not fulfilled.
To show that a conditional statement is true, you must construct a logical argument
using reasons.
The converse of the condition statement P→Q is Q→P.
If a conditional statement and its converse are both true, you can combine them to
form one biconditional statement or a biconditional. The parts of a biconditional
statement are connected by the phrase if and only if.
Conditional Statement: If P, then Q. P→Q
Converse: If Q, then P. Q→P
Biconditional: P if and only if Q. P↔Q
The other statements related to a conditional are its inverse and its
contrapositive.
Conditional Statement: If P, then Q. P→Q
Inverse: If not P, then not Q. ~P → ~Q
Contrapositive: If not Q, then not P. ~Q ↔ ~P
EXAMPLE 6.1.
Write the inverse, converse, and contrapositive of the statement below. Then, tell whether
each is true or false.
“If two angles form a linear pair, then they are supplementary.”
SOLUTION.
Identify the hypothesis and conclusion.
Hypothesis: Two angles form a linear pair.

Conclusion: They are supplementary.
Inverse: If two angles do not form a linear pair, then they are not supplementary. (False)
Converse: If two angles are supplementary, then they form a linear pair. (False)
Contrapositive: If two angles are not supplementary, then they do not form a linear pair.
(True)
If studying every day is sufficient for getting high grade, is getting high grade
necessary for studying every day? Think about it.
EXAMPLE 6.2.
Write in words the (a) converse, (b) inverse, and (c) contrapositive of the statement, “If n
is an even number, then n + 1 is an odd number.”
SOLUTION.
The given statement is of the form P→Q, where P is “n is an even number” and Q
is “n + 1 is and odd number.”
a. Converse: Q→P, which translates into “if n + 1 is an odd number, then n is an even
number.”
b. Inverse: ~P→~Q, which translates into “if n is not an even number, then n + 1 is not an
odd number.”
c. Contrapositive: ~Q→~P, translate into “if n + 1 is not an odd number, then n is not an
even number.”
TRY. Write the contrapositive of “If you cannot pass the final exam (f), you cannot pass
the subject (s).”
Conditional Equivalents
The following are other interpretations of P→Q.
• If P, then Q • P implies Q • P is sufficient for Q
• If P, Q • Q whenever P • Q is necessary for P
• Q if P • P only if Q • Q is implied by P

EXAMPLE 6.3.
Let P = It is a math subject and Q = It is logical. Express each statement in symbolic form.
a. If it is a math subject, then it is logical.
b. If it is not logical, then it is not a math subject.
c. It is logical if it is a math subject.
d. Being a math subject is sufficient for being logical.
e. It is not a math subject if it is not logical.
SOLUTION.
a. P → Q c. P → Q e. ~P → ~Q
b. ~Q → ~P d. P → Q
The following tables give the truth tables for statements related to conditionals.
Table 6.1. Truth Table for Converse of Table 6.2. Truth Table for Contrapositive of
P→Q:Q→P P→Q : ~Q → ~P
P Q Q→P P Q ~Q→~P
T T T T T T
T F T T F F
F T F F T T
F F T F F T
Table 6.3. Truth Table for Inverse of P→Q : ~P → ~Q
P Q ~P→~Q
T T T
T F T
F T F
F F T
The summary of the truth tables related to conditional is given in the following Table 6.4.
Table 6.4. Truth Table for Conditional "P → Q" and the related terms.
Conditional Converse Inverse Contrapositive

P Q P→Q Q→P ~P → ~Q ~Q → ~P
T T T T T T
T F F T T F
F T T F F T
F F T T T T
Notice that: Converse and Inverse are equivalent.

Conditional and Contrapositive are equivalent.
Equivalent
Two propositions P and Q that have the same truth values are said to be logically
equivalent and denoted by P ↔ Q or P ≡ Q.
EXAMPLE 6.4.
Show that the two given compound propositions are equivalent.
a. ~ (P ˅ Q) and ~P ˄ ~Q
b. ~ (P ˄ Q) and ~P ˅ ~Q
SOLUTION.
a. Prepare truth table for each statement.
For ~ (P ˅ Q):
P Q P˅Q ~ (P ˅ Q)
T T T F
T F T F
F T T F
F F F T
For ~P ˄ ~Q:
P Q ~P ~Q ~P ˄ ~Q
T T F F F
T F F T F
F T T F F
F F T T T
Because ~ (P ˅ Q) and ~P ˄ ~Q have exactly the same truth values, FFFT, then
they are equivalent.
b. Prepare truth table for each statement.

For ~ (P ˄ Q):

P Q P˄Q ~ (P ˄ Q)
T T T F
T F F T
F T F T
F F F T
For ~P ˅ ~Q:
P Q ~P ~Q ~P ˅ ~Q
T T F F F
T F F T T
F T T F T
F F T T T
Because ~ (P ˄ Q) and ~P ˅ ~Q have exactly the same truth values, FTTT, then
they are equivalent. These examples exhibit De Morgan’s Law.
De Morgan’s Law
• ~ (P ˄ Q) ≡ ~P ˅ ~Q
• ~ (P ˅ Q) ≡ ~P ˄ ~Q
EXAMPLE 6.5.
Write a statement equivalent to:
“It is not true that Louie is a mathematician or comedian.”
SOLUTION.
Let P and Q represent the following simple statements:
P: Louie is a mathematician.
Q: Louie is a comedian.
The given statement in symbols is ~ (P ˅ Q). An equivalent statement is ~P ˄ ~Q. This
can be translated as:
Louie is not a mathematician and Louie is not a comedian.
Or
Louie is neither a mathematician nor a comedian.
EXAMPLE 6.6.
Write the negation of each statement.

a. P ˅ ~Q
b. I’m going to Baguio and Bohol.
SOLUTION.
a. Using De Morgan’s Law, we can negate this disjunction by negating each component
statement and changing ˅ to ˄.
Conjunction: P ˅ ~Q
Negation: ~ (P ˅ ~Q)
~P ˄ ~ (~Q)
~P ˄ Q
b. Using De Morgan’s Law, we can write the negation in English without having to
translate into symbolic form. To negate this conjunction, negate each component
statement and change and to or.
Conjunction: I’m going to Baguio and I’m going to Bohol.
Negation: I’m not going to Baguio or I’m not going to Bohol.
EXAMPLE 6.7.
Write a statement that is equivalent to:
“If Francis fails, he will take summer class and cannot travel.”
SOLUTION.
Write the conditional statement in symbolic form.
Let P: Francis fails.
Q: Francis will take summer class.
R: Francis can travel.
If Francis fails, he will take summer class and cannot travel.
P → (Q ˄ ~R)
An equivalent statement is the contrapositive
~ (Q ˄ ~R) → ~P.
[~Q ˅ ~(~R)] → ~P De Morgan’s Law for Negation of a Conjunction.
(~Q ˅ R) → ~P Simplify.
Thus,
P → (Q ˄ ~R) ≡ (~Q ˅ R) → ~P.

The statement that is equivalent to:
“If Francis fails, he will take summer class and cannot travel.”
Is
“If Francis will not take summer class or can travel, then he will not fail.”
EXAMPLE 6.8.
Select the statement that is not equivalent to: “If it’s sunny, then I need an umbrella.”
a. It is not sunny, or I need an umbrella.
b. I need an umbrella, or it is not sunny.
c. If I need an umbrella, then it is sunny.
d. If I do not need an umbrella, then it is not sunny.
SOLUTION.
Write the given statement and the choices in symbolic form. The statement, “If it’s sunny,
then I need an umbrella,” can be represented as follows:
P: It is sunny.
Q: I need an umbrella.
The symbolic representations of the given statement and the choices are:
If it’s sunny, then I need an umbrella. P→Q
a. It is not sunny, or I need an umbrella. ~P ˅ Q
b. I need an umbrella, or it is not sunny. Q ˅ ~P
c. If I need an umbrella, then it is sunny. Q→P
d. If I do not need an umbrella, then it is not sunny. ~Q → ~P
Construct a truth table that contains the truth values for P → Q, as well as those for the
four choices.
Given (a) (b) (c) (d)
P Q P→Q ~P ~P ˅ Q Q ˅ ~P Q→P ~Q ~Q → ~P
T T T F T T T F T
T F F F F F T T F
F T T T T T F F T
F F T T T T T T T
The statement in (c) does not have the same corresponding truth values as in the
given statement P → Q. Therefore, this statement is not equivalent to the given statement.
The Negation of a Conditional Statement
The negation of P → Q is P ˄ ~Q. This can be expressed as
~ (P → Q) ≡ P ˄ ~Q
The following truth table shows that P ˄ ~Q negates P → Q.
P Q P→Q ~Q P ˄ ~Q
T T T F F
T F F T T
F T T F F
F F T T F
The shaded columns have opposite truth values; thus P ˄ ~Q negates P → Q.
Note: To form the negation of a conditional statement,
1. leave the antecedent unchanged;
2. change the if-then connective to and; and
3. negate the consequent.
EXAMPLE 6.9.
Write the negation of the following:
a. If the music is playing, then I cannot concentrate.
b. ~A → ~B
SOLUTION.
a.
Given statement: If the music is playing, then I cannot concentrate.
Negation: The music is playing and I can concentrate.
The negation of the given statement is
The music is playing, and I can concentrate.
b. Given statement: ~A → ~B
Negation: ~A ˄ B
Summary on Conditional Statement p → q

Inverse: ~P → ~Q Contrapositive: ~Q → ~P
Converse: Q→P Negation: P ˄ ~Q
Negations of Other Connectives
1. The negation of a negation: ~(~P) ≡ P
2. The negation of a conjunction: ~ (P ˄ Q) ≡ ~P ˅ ~Q
3. The negation of a disjunction: ~ (P ˅ Q) ≡ ~P ˄ ~Q
6.2. Tautology
A compound statement which is true for any combination of truth values of the
variables in the statement is called a tautology. A statement that is always false is called
a contradiction.
EXAMPLE 6.9.
Construct the truth table for each of the following and show that the compound statement
is a tautology.
a. (P → Q) ↔ (~Q → ~P) c. [P ˅ (~P)] ˄ [Q ˅ (~Q)]
b. ~ (P ˄ Q) ↔ (~P ˅ ~Q)
SOLUTION.
a.
• Complete the columns P and Q.
• Combine Columns 1 and 2 using the connective → to get entries for P → Q. Write
the result in Column 3.
• Negate statement Q to get entries in Column 5.
• Combine Columns 4 and 5 using the connective → to get entries for ~Q → ~P.
for (P → Q) ↔ (~Q → ~P). Write the result in Column 7.
P Q P→Q ~P ~Q ~Q → ~P (P→Q)↔(~Q→~P)
T T T F F T T
T F F F T F T
F T T T F T T
F F T T T T T
      
Because (P → Q) ↔ (~Q → ~P) is always true, the compound statement is a tautology.
b.
• Combine Columns 1 and 2 using the connective ˄ to get entries for P ˄ Q. Write
• Negate Column 3 to get the truth values for ~ (P ˅ Q). Write the result in Column
4.
• Combine Columns 5 and 6 using the connective ˅ to get entries for ~P ˅ ~Q. Write
for ~ (P ˄ Q) ↔ (~P ˅ ~Q). Write the result in Column 8.
P Q P˄Q ~ (P ˄ Q) ~P ~Q ~P ˅ ~Q ~(P˄Q) ↔ (~P˅~Q)
T T T F F F F T
T F F T F T T T
F T F T T F T T
F F F T T T T T
       
c.
• The dominant connective is ˄.
• Combine Columns 1 and 3 using the connective ˅ to get entries for P ˅ (~P). Write
• Combine Columns 2 and 5 using the connective ˅ to get entries in Column 6.

• Finally, combine Columns 4 and 6 using the connective ˄ to get the entries in
Column 7.
P Q ~P P ˅ (~P) ~Q Q ˅ (~Q) [P˅(~P)] ˄ [Q˅(~Q)]
T T F T F T T
T F F T T T T
F T T T F T T
F F T T T T T
      
Since the entries under the dominant connective are all true, then the statement
[P ˅ (~P)] ˄ [Q ˅ (~Q)] is a tautology.
EXAMPLE 6.10.
Construct a truth table for (P ˄ Q) → R and determine whether the statement is a
tautology.
SOLUTION.
For compound statement consisting of three simple statements, there are 2 3 or 8
different true-false combinations. The dominant connective is →.
P Q R P˄Q (P ˄ Q) → R
T T T T T
T T F T F
T F T F T
T F F F T
F T T F T
F T F F T
F F T F T
F F F F T
The truth values in the final column are not all Ts. Thus, (P ˄ Q) → R is not true
in all possible cases; hence, the statement is not a tautology.
Note:
• Another way of saying that this statement is not a tautology is that this conditional
statement is not an implication.
• The final column tells us that the statement is false when both P and Q are true
and R is false. For example, your teacher says,
If you buy the book and read it daily, then you will pass the examination.
Use the following representations:
P: You buy the book.
Q: You read it daily.
R: You will pass the examination.
The teacher’s claim can be expressed symbolically as (P ˄ Q) → R.
The student buys the book (P is true), reads it daily (Q is true), but the student fails
in the examination (R is false). This corresponds to the second row in the truth table for
(P ˄ Q) → R. The teacher’s claim is false.
6.3. Valid Argument and Fallacy
In the conditional statement (EXAMPLE 6.10),
If you buy the book and read it daily, then you will pass the examination.
The teacher’s claim is not true because (P ˄ Q) → R is not a tautology, hence, making
his argument not valid.
An argument is made up of two parts: the given statements called the premises
and a conclusion. It is valid if the conclusion is true whenever the premises are
assumed to be true. If it is not valid, it is said to be an invalid argument or a fallacy.
Here is an example of an argument:
Premise 1: If one loves Algebra, then he loves Mathematics.
Premise 2: Mike loves Algebra.
Conclusion: Therefore, Mike loves Mathematics.
Representing each simple statement with a letter:
P: One loves Algebra.
Q: One loves Mathematics.
Writing the two premises and the conclusion in symbolic form, we have:
Premise 1: P→Q If one loves Algebra, then he loves Mathematics.
Premise 2: P Mike loves Algebra.
Conclusion: ∴Q Therefore, Mike loves Mathematics.
To check whether the argument is valid or a fallacy, we rewrite it as a conditional
statement in the form
[(P → Q) ˄ P] → Q
If premise 1 and 2 then conclusion
and construct a truth table for the statement
[(P → Q) ˄ P] → Q

P Q P → Q (P → Q) ˄ P [(P → Q) ˄ P] → Q
T T T F F
T F F T T
F T T F F
F F T T F
    
Since the final column in the truth table is true in every case, then the statement is
a tautology. Since the conclusion is true whenever the premises are true (first case), then
the argument is valid.
Note: If the conditional statement in the final column is false in the first case, then the
argument is invalid or is a fallacy. And the statement is no longer a tautology. Note that it
is not a contradiction either.
EXAMPLE 6.11.
Use truth table to determine whether the symbolic form of the argument is a
tautology and whether it is valid or a fallacy.
a. P→Q c. (P ˄ Q) ˄ (Q ˄ P)
~P P
∴ ~Q ∴ P˅Q
b. ~P → Q
~P
∴ P
SOLUTION.
a. The symbolic statement is [(P → Q) ˄ ~P] → ~Q.
The truth table:
P Q P→Q ~P (P → Q) ˄ ~P ~Q [(P → Q) ˄ ~P] → ~Q
T T T F F F T
T F F F F T T
F T T T T F F
F F T T T T T
The entries in the final column of the truth table are not all true, so the argument is
not a tautology. And since the conclusion in row 3 is false while the premises are true,
then the argument is a fallacy.
b. The symbolic statement is [(~P → Q) ˄ ~Q] → P.

The truth table:
P Q ~P ~P → Q ~Q ~ (P → Q) ˄ ~Q [(~P → Q) ˄ ~Q] → P
T T F T F F T
T F F T T T T
F T T T F F T
F F T F T F T
The entries in the final column of the truth table are all true, so the argument is a
tautology and valid as well.
c. The symbolic statement is [(P ˄ Q) ˄ (Q ˄ P) ˄ P] → (P ˅ Q).

The truth table:
P Q P˄Q Q˄P (P˄Q)˄(Q˄P) [(P˄Q)˄(Q˄P)]˄P (P˅Q) {[(P˄Q)˄(Q˄P)]˄P}→(P˅Q)
T T T T T T T T
T F F F F F T T
F T F F F F T T
F F F F F F F T
The entries in the final column of the truth table are all true, so the argument is a
tautology and valid as well.
Table 6.5 gives the standard forms of commonly used valid and invalid arguments.
Hence, if after an English argument is translated into one of these forms, you can
immediately determine whether or not it is valid one without using a truth table.
Table 6.5. Standard forms of Arguments
Valid Arguments Invalid Arguments/Fallacy

1. Direct Reasoning or Modus Ponens 1. Fallacy of the Converse
P→Q P→Q
P____ Q____
∴ Q ∴ P
2. Contrapositive Reasoning or Modus Tolens 2. Fallacy of the Inverse
P→Q P→Q
~Q____ ~Q____
∴~P ∴ ~Q
3. Disjunctive Reasoning or Disjunctive Syllogism 3. Misuse of Disjunctive
P˅Q P˅Q Reasoning
~P____ ~Q____ P˅Q P˅Q
∴ Q ∴ P P____ Q____
∴ ~Q ∴ ~P
4. Transitive Reasoning or Hypothetical Syllogism 4. Misuse of Transitive Reasoning

P→Q P→Q
Q→R Q→R
∴P → R ∴R→P
~R → ~P ~P → ~R
EXAMPLE 6.12.
Translate each argument into symbolic form. Then use Table 6.5 (if possible) to determine
whether each argument is valid or a fallacy.
a. If I am relaxed, I am productive. b. If it is cold and rainy, I stay home.
If I am productive, I am happy It is not cold or it is not rainy.
∴ If I am not happy, I am not relaxed ∴ I do not stay home.
SOLUTION.
a. Use letters to represent each statement in the argument.
Let P: I am relaxed.
Q: I am productive.
R: I am happy.
Express the premises and conclusions symbolically

P→Q
Q→R
∴ ~R → ~P
The argument is valid because of transitive reasoning.
b. Use letters to represent each statement in the argument.

Let P: It is cold.
Q: It is rainy.
R: I stay home.
Express the premises and conclusions symbolically
(P ˄ Q) → R
~P ˅ ~Q
∴ ~R
Not translated in any of the forms given in Table 6.5.
Prepare a truth table for the symbolic statement.
P Q R P˄Q (P˄Q)→R ~P ~Q {[(P˄Q)→R]˄(~P˅~Q)} ~R {[(P˄Q)→R]˄(~R˅~Q)}→~R
T T T T T F F F F T
T T F T F F F F T T
T F T F T F T T F F
T F F F T F T T T T
F T T F T T F T F F
F T F F T T F T T T
F F T F T T T T F F
F F F F T T T T T T
The argument is a fallacy.
EXAMPLE 6.13.
Draw a valid conclusion from the following premises:
If everyone tells the truth, then there is no miscommunication.
There is some miscommunication.
SOLUTION.
Let P: Everyone tells the truth.
Q: There is no miscommunication.
Symbolically, the form of the premises is
P→Q If everyone tells the truth, then there is no miscommunication.
~Q There is some miscommunication (negation of “no” is “some”).
∴ ?_
To be valid, the conclusion is ~P because of the contrapositive reasoning. The ~P
translates as
“Not everyone tells the truth.” Or
“Some people do not tell the truth.”

Note that the negation of “all” is “some … not.”

JANUARY 4, 2023 ABM & HUMSS
JANUARY 5, 2023 AS & ICT
Quiz 6
CONDITIONAL PROPOSITIONS, TAUTOLOGIES, AND FALLACIES
Direction: Answer the following items as instructed. Write your answer on a yellow paper.
WRITE THE CONVERSE, INVERSE, CONTRAPOSITIVE, AND NEGATION FOR
EACH STATEMENT. (50 POINTS)
1. If I cut classes, then I miss the quiz.
2. If I am in Tagoloan, then I am in Misamis Oriental.
3. If it is Valentine’s Day, then some people wear red.
4. If the teacher teaches well, then no students will fail the test.
5. If all hardworkers are successful, then some people are lazy.
DRAW A VALID CONCLUSION FROM THE GIVEN PREMISES. (50 POINTS)

6. If I go to Bohol, I will eat kalamay.
If I eat kalamay, I gain weight.
Therefore, ….
7. You review, or you do not feel confident.
I do not review.
Therefore, …
8. If a person is a teacher, then that person has a college degree.
Thoma does not have a college degree.
Therefore, ...

9. You were told to submit your poems or not get the 100 points.
You did not submit your poem.
Therefore, …
10. If I am confused or angry, I cannot concentrate,
I can concentrate.
Therefore, …
Application 6
CONDITIONAL PROPOSITIONS, TAUTOLOGIES, AND FALLACIES
Direction: You will be divided into 6 groups according to your family names. Family names
that start with A to D will answer number 1. E to I: number 2. J to M: number 3. N to R:
number 4. S to V: number 5. W to Z: number 6. Record yourself in a video reading your
output then send to our Messenger group chat (50 points).
DRAW A VALID CONCLUSION FROM THE GIVEN PREMISES and DEFEND YOUR
CONCLUSIONS (REFER TO EXAMPLE 6.13)
1. If the face shield policy is removed, then we need something to protect our eyes
from droplets.
Goggles can prevent the droplets.
Therefore, …
2. According to President Duterte, the vaccinated Pinoys are heroes and the
unvaccinated are ugly.
You have not been vaccinated yet.
Therefore, …
3. If 40 times 4 times 10 is 1600, then 40 times 4 is 1600.
40 times 4 is not 1600.
Therefore, …
4. You live in Misamis Oriental.
VP Leni says she is the mother of the whole country.

Therefore, …
5. If the ratings are low, Ang Probinsyano will end.
The ratings are high.
Therefore, …
6. Marites is now the name of the people who love to gossip.
Your name is Marites.
Therefore, …
References
Oronce, O. A. (2016). General Mathematics (1st ed.). Manila, Philippines: Rex Book
Store, Inc. Retrieved September 2021
Tarquin, A., & Blank, L. (2012). Engineering Economy (7th ed.). New York: McGraw-Hill.
Retrieved October 2021
Types of Annuities. (2021). Retrieved from MATHalino:
https://mathalino.com/reviewer/engineering-economy/types-annuities

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Senior High School

ST. IGNATIUS TECHNICAL COLLEGE, INC. NOT FOR SALE i

ST. IGNATIUS TECHNICAL COLLEGE, INC. NOT FOR SALE ii

Vision, Mission, and Core Values

ST. IGNATIUS TECHNICAL COLLEGE, INC. NOT FOR SALE iii

ST. IGNATIUS TECHNICAL COLLEGE, INC. NOT FOR SALE iv

ST. IGNATIUS TECHNICAL COLLEGE INC. Legal History ............................................... i

2. SIMPLE AND GENERAL ANNUITIES ........................................................................... 15

3. AMORTIZATION AND LOANS........................................................................................ 35

4. STOCKS AND BONDS ..................................................................................................... 42

5. PROPOSITIONS, SYMBOLS, AND TRUTH TABLES ............................................... 59

6. CONDITIONAL PROPOSITIONS, TAUTOLOGIES, AND FALLACIES .................. 81

References ............................................................................................................................... 100

ST. IGNATIUS TECHNICAL COLLEGE, INC. NOT FOR SALE v

often close fail to convey to others.

It is important to remember that, in Mathematics, the process of learning something

the sake of home-based delivery of learning instructions. As much as possible, the

students partake of the great wealth of ideas disclosed by generations of thinkers.

what it means to be a human being, or what it means to be you.

Module 2 is composed of the following lessons:

ST. IGNATIUS TECHNICAL COLLEGE, INC. NOT FOR SALE 1

ST. IGNATIUS TECHNICAL COLLEGE, INC. NOT FOR SALE 2

ST. IGNATIUS TECHNICAL COLLEGE, INC. NOT FOR SALE 3

1 November 14, 2022 1 November 15, 2022

1 November 14, 2022 1 November 15, 2022

ST. IGNATIUS TECHNICAL COLLEGE, INC. NOT FOR SALE 4

1. SIMPLE AND COMPOUND INTERESTS

ST. IGNATIUS TECHNICAL COLLEGE, INC. NOT FOR SALE 5

ST. IGNATIUS TECHNICAL COLLEGE, INC. NOT FOR SALE 6

ST. IGNATIUS TECHNICAL COLLEGE, INC. NOT FOR SALE 7

ST. IGNATIUS TECHNICAL COLLEGE, INC. NOT FOR SALE 8

1.2. Simple and Compound Interest

SOLUTION. The interest for each of the 3 years is

The amount due after 3 years is

ST. IGNATIUS TECHNICAL COLLEGE, INC. NOT FOR SALE 9

Compound interest = (principal + all accrued interest)(interest rate) Equation 1.6

ST. IGNATIUS TECHNICAL COLLEGE, INC. NOT FOR SALE 10

compounded semi-annually for 𝑛 years, the amount 𝐹 is

compounding periods is 12𝑡 = 12 ∙ 4 = 48.

ST. IGNATIUS TECHNICAL COLLEGE, INC. NOT FOR SALE 12

Name___________________________________ Subject Teacher ______________

Karen invested ₱25,000.00 at 16% simple interest for 6 years.

Find the future value of the indicated principal.

7. ₱35,000.00 at 6% compounded semi-annually for 12 years.

ST. IGNATIUS TECHNICAL COLLEGE, INC. NOT FOR SALE 13

10. ₱36,000.00 at 9.75% compounded monthly for 4 years.

Name___________________________________ Subject Teacher ______________

ST. IGNATIUS TECHNICAL COLLEGE, INC. NOT FOR SALE 14

2. SIMPLE AND GENERAL ANNUITIES

ST. IGNATIUS TECHNICAL COLLEGE, INC. NOT FOR SALE 15

Figure 2.1. Difference between Simple Annuity and General Annuity

ST. IGNATIUS TECHNICAL COLLEGE, INC. NOT FOR SALE 16

Example of a simple annuity is a deposit of ₱5,500.00 being made at the end of

ST. IGNATIUS TECHNICAL COLLEGE, INC. NOT FOR SALE 17

2.2. Simple Ordinary Annuity

Figure 2.2. Cash Flow Diagram of Ordinary Annuity (from

where F = Future Value or Amount

ST. IGNATIUS TECHNICAL COLLEGE, INC. NOT FOR SALE 18

denoted by (𝐹/𝐴, 𝑖, 𝑛).

Name_____________________ Subject Teacher

Name_____________________ Subject Teacher

Name_____________________ Subject Teacher

Name_____________________ Subject Teacher