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Module 10: Mathematics of Finance Lesson 1: Activity 1: FV PV (1+r)

Jianne invested PHP 50,000 at an annual interest rate of 4%. After 3 years her investment was worth PHP 56,243.20. With the interest compounded quarterly, her investment was worth PHP 56,341.25 after 3 years. JJ needs to invest PHP 680,735.19 now at an annual 8% interest rate to reach his target of PHP 1,000,000 after 5 years. JL has PHP 1,000,000 that he wants to grow to PHP 2,000,000 in 5 years. To reach his goal, he should invest at an annual interest rate of 14.87%.

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173 views6 pages

Module 10: Mathematics of Finance Lesson 1: Activity 1: FV PV (1+r)

Jianne invested PHP 50,000 at an annual interest rate of 4%. After 3 years her investment was worth PHP 56,243.20. With the interest compounded quarterly, her investment was worth PHP 56,341.25 after 3 years. JJ needs to invest PHP 680,735.19 now at an annual 8% interest rate to reach his target of PHP 1,000,000 after 5 years. JL has PHP 1,000,000 that he wants to grow to PHP 2,000,000 in 5 years. To reach his goal, he should invest at an annual interest rate of 14.87%.

Uploaded by

Pia Latoja
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Module 10: Mathematics of Finance

Lesson 1: Activity 1
Jianne invested Php 50,000 in a friend’s business with a definite annual interest rate of
4%. How much is her money’s worth after 3 years? What if the interest rate of 4% is
compounded quarterly, how much will she get after 3 years?

1. How much is her money’s worth after 3 years?


Given:
PV= P50,000
r= 4% or 0.04
t= 3 years
Formula:
FV =PV (1+r )

Solution:
FV= P50,000 (1+0.04)3
= P50,000 (1.04)3
= P50,000 (1.12)
= P56,243.20

2. What if the interest rate of 4% is compounded quarterly, how much will she get after 3
years?
Given:
PV= P50,000
r= 4% or 0.04
m= 3
t= 3 years
Formula:

FV =PV 1+ ( mt )
mt

Solution:

( 0.044 )
= 50,000 1+ 4x3

0.04
= 50,000 (1+
4 )
12

= 50,000 (1 + 0.01)12
= 50,000 (1.01)12
= 50,000 (1.13)
= 56,341.25

Activity 2
JJ wants to have P1,000,000.00 after 5 years. How much money does he need to invest
now at 8% annual interest rate to reach his target?
1. How much money does he need to invest now at 8% annual interest rate to reach his
target?
Given:
FV= P1,000,000
r= 8% or 0.08
t= 5 years

Formula:
FV
PV =
¿¿
Solution:
P 1,000,000
=
¿¿
P 1,000,000
=
(1.469)
= P680,735.19

Activity 3
JL has P1,000,000.00. He plans to invest it and wants to grow his money to
P2,000,000.00 after 5 years.
At what interest rate should he invest his money to reach his goal amount?

Given:
PV= 1,000,000
FV= 2,000,000
t= 5 years
Formula:
FV =PV (1+r )t
Solution:
2,000,000 1,000,000(1+ r )5
= =
1,000,000 1,000,000
= 2 = (1+r)5
= 25 = (1+r)
= 1.148698355 – 1 = r
r = 0.148698355 or 14.87%
LESSON2A – PAPER AND PEN – ACTIVITY 1
A very good friend borrowed money from you. You lent her P10,000 with the following
conditions on charging one-time interest on the full amount:
 1% if she returns the money after a month
 3% if she returns it after 6 months
 5% if she returns it after 1 year

How much interest can you collect if your good friend pays you
After 2 months? __________
After 2 years? _____________

I=PxRxT
Q1 - after 2 months
P= 10,000
T = 2MONTHS/12MONTHS = 0.1
R= 2% OR 0.02
=10,000 X .02X 0.1
I =P20

Q2 – after 2years (10%)


P= 10,000
T= 2YR = 24/6 = 4
R= 10% OR 0.10
I = 10,000 X .10 X 4
= P4,000
Mod 12: Lesson 1-Activity 1

Check – up activity # 1. Determine whether the given congruence is true.

    1. 29 ≡ 8 (mod 3)   

Given:

a= 29

b= 8

mod n= 3

Formula:

a ≡ b (mod n) iff n/(a-b) is an integer

Solution:

3/(29-8)

3/21

=7

Answer: 29 and 8 are congruent to mod 3 because they are both divisible

to 7.

   2.) 15 ≡19(mod 8)

Given:

a= 15

b= 19

mod n = 8
Formula:

a ≅ b (mod n) iff n (a-b) is an integer

Solution:

8(15-19)

8(-4)

= -0.5

Answer:

15 and 19 are not congruent to mod 8 because they are not divisible in
the same number.

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