Chapter 2 (Module 5)

SHS General Mathematics

Basic Business Mathematics

Basic Business Mathematics

Overview

Math of finance introduces mathematical concepts in business. These concepts are

essential to real-life activities such as investing money in banks or in an insurance policy.

The purpose of this module is to introduce you to the applications of simple and
compound interests in both personal and business management. Varied situations applying the
idea of borrowing and investing money is also presented.

Learning Outcomes

After working with the module, you will be able to:

1. Calculate simple and compound interest.

2. Define and classify different investment such as stocks and bonds.
3. Determine better investment opportunity.

SIMPLE INTEREST

Interest is the amount paid by a borrower to a lender for a credit or the amount gained on
an investment. This value of the interest depends largely on the interest rate; the borrowed or
invested amount-referred to as the principal, and the length of time the principal is invested or
borrowed.

Example of interests include interest paid for bank loans, bond yields, and return on
savings.

Simple Interest is an interest which is compute entirely at once from the moment the
money is borrowed or invested until it will be paid. It is computed by multiplying the principal,
the rate, and time in years. In symbol,

I = Prt

where I is the simple interest

P is the principal
r is the interest rate, and
t is the length of time

Algebraically, we can derive the formulas to find the principal, rate, and time. These
formulas are as follows:

𝐼 𝐼 𝐼
P = 𝑟𝑡 r = 𝑃𝑡 t = 𝑃𝑟

At the end of the term, also referred to as the due date or maturity date, the
principal will be paid together with the interest. The sum of the principal and the interest
is called maturity value denoted by M. Mathematically,

M=P+I M = P + Prt since I = Prt

M = P(1 + rt)
 Chapter 2(Module 5)
SHS General Mathematics
Basic Business Mathematics

1 1
1. Flyndon borrowed an amount of ₱ 300,000 at 2 4 % from CSB Lending Company. The loan is
payable after 2 years and 6 months. Find the simple interest and the amount to be repaid on
the due date.
2. Jan earned ₱ 15,000 for 5 years and 10 months at 6% simple interest. How much did he
invest?
3. In how many years will the amount of ₱ 10,000 accumulate to ₱ 30,000 at 4.5% simple
interest rate?

Solutions:
Example

30
1. Given: P = ₱ 300,000; r = 2.25% = 0.0225; t = 12 years

What are asked: Simple Interest I and maturity value M

For Simple Interest:

I = Prt
30
= 300,000( 0.0225) (12)
I = ₱ 16,875

For maturity value:

M=P+I
= 300,000 + 16,875
= ₱ 316,875

10
2. Given: I = ₱ 15,000, r = 6% = 0.06, t = 5 12

What is asked: principal P

𝑰
P = 𝒓𝒕
= 15,000
10
0.06(5 12 )
= ₱ 42, 881.65
3. Given: P = 10,000; M = 30,000; r = 4.5% = 0.045
What is asked:

From the formula: M = P + Prt

t=M–P
Pr
= 30,000-10,000
10,000 (0.045)

= 44.44 years or 44 years and 5.28 months

 Chapter 2(Module 5)
SHS General Mathematics
Basic Business Mathematics

Self-Assessment Questions
1. Complete the table below. Show your solution on a separate sheet.
SAQ

Principal (₱) Rate Time Interest (₱) Maturity

Value (₱)
1 2,000 3.50% 1 yr and 5
months
2 0.95% 2.50 years 1,250
3 10,000 0.005% 2,750

2. Answer the following questions. Show your solution to support your answer.

a. In 14 months, Cecille earned ₱ 5,250 from an investment that paid 1.09% interest rate per
year. How much was the principal that Cecille invested?

b. At 8.65% simple interest for 3 years and 6 months, what is the maturity value of the
borrowed money amounting to ₱ 2,500.

c. How much is the principal to earn ₱ 1,285 for 2 years at 3.5% simple interest?
 Chapter 2(Module 5)
SHS General Mathematics
Basic Business Mathematics

COMPOUND INTEREST

Compound interest is a great thing when you are earning it! Compound interest is
when a bank pays interest on both the principal (the original amount of money) and the
interest an account has already earned.

Compound interest is the amount added to the principal of an investment or a loan

so that the added interest also earns interest from that on. This addiction of interest to
the principal is called compounding.

In simple interest, the principal is constant all throughout the term while in a
compound interest, the principal increases repeatedly by adding the interest at a given
interval throughout the term of investment or loan.

1 1. Given the principal of ₱ 50,000 . Compute and compare the future values in simple and
compound interests on a loan at 3.5% rate annually after 4 years.

Solutions:
Example

1. Given: P = ₱ 50,000; r = 3.5% = 0.035; t = 4 years

What are asked: Future Value in Simple Interest and compound Interest

For Simple Interest: Future Value:

I = Prt F=P+I
= 50,000( 0.035) (4) = 50,000 + 7,000
I = ₱ 7,000 = ₱ 57,000

For Compound Interest: Future Value:

1st Year where P = ₱ 50,000 F=P+I

I = Prt = 50,000 + 1750
= 50,000(0.035) (4)(1) = ₱ 51, 750
= ₱ 1,750

2nd Year where P = ₱ 51,750 Future Value:

I = Prt F=P+I
= 51,750.035) (1) = 51,750 + 1,811.25
= ₱ 1,811.50 = ₱ 53,561.25
 Chapter 2(Module 5)
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Basic Business Mathematics

3rd Year where P = ₱ 53,561.25 Future Value:

I = Prt F=P+I
= 53,561.25(0.035) (1) = 53,561.25 + 1874.64
= ₱ 1,874.64 = 55,435.89
4th Year where P = 55,435.89 Future Value:
I = Prt F=P+I
= 55,435.89 (0.035)(1) = 55,435.89 + 1,940.26
= ₱ 1,940.26 = ₱ 57,376.15
To compute for the accumulated compound interest after 4 years, we have
I=F–P
= 57,376.15-50,000
= ₱ 7,376.15

The table shows the summary of the results of the above computations so we can make a
further comparison between simple and compound interests.

Period Simple Interest Compound Interest

Principal at Interest Future Principal Interest Future

the Value at at the Value at
(₱) (₱)
beginning of the end of beginning the end of
the period the period of the the period
(₱) period (₱)
(₱) (₱)
1st yr 50,000.00 1,750.00 51,750.00
2nd yr 51,750.00 1,811.25 53,561.25
3rd yr 50,000 7,000 57,000 53,561.25 1,874.64 55,435.89
4th yr 55,435.89 1,940.26 57,376.15
 Chapter 2(Module 5)
SHS General Mathematics
Basic Business Mathematics

FUTURE VALUE IN A COMPOUND INTEREST

The general formula in finding the future value in a compound interest is given by
F = P (1 + i )n

Where F is the future value in a compound interest;

P is the principal amount
I is the interest rate per conversion, also referred to as periodic interest rate; and
n is the number of conversion period or the total number of payments.

𝒋
To get the value of i in the formula, use i = 𝒌 where j is the nominal rate or the
quoted interest rate and f is the frequency of conversion.

The nominal rate j is the annual interest rate, unless otherwise stated. The
frequency of conversion f tells the number of times the interest is added to the principal
in one year. That is,

f if
1 Annually
2 Semi-annually
4 Quarterly
6 Every 2 months
12 Monthly
360 daily

On the other hand, to get the value of n in the formula, use n= ft where f is the
frequency of conversion and t is the term of an investment or a loan expressed in years.

Now to get the compound interest for the whole term, simply subtract the
principal at the beginning from the future value at the end of the term. That is,

I = F – P.

Conversion period or interest period is the interval between two successive

computations of interest. In practice, the interest may be compounded annually, semi-
annually, quarterly, or at some other specific intervals.

Algebraically, we can derive the formulas for other variables such as the principal
P, periodic rate i, nominal rate j, term t, and compound interest I using the formula:

F = P( 1 + i )n.
 Chapter 2(Module 5)
SHS General Mathematics
Basic Business Mathematics

1
1. If ₱ 35,000 is invested at 7.5% compounded monthly, how much is the future value
Example

and the compound interest after 2 years?

Solution:
𝑗 0.075
Given: P = 35,000, j = 7.5% = 0.075 ; t = 2; f = 12; i = 𝑓 = 12 ; n = ft = 12 (2 )= 24

What is asked? : future value F and compound Interest I

F = P (1 + i)n

= 35,000 (1 + 0.075)24
12

F = ₱ 40,645.22

I=F–P

= 40,645.22 – 35,000

= ₱ 5645.22

2. An amount is discounted to ₱ 15,000 at 5% converted semi-annually for 24 months. Find

the compound discount.

Solution:

24 24 𝑗 0.05
Given: F = ₱ 15,000; f = 2; j = 5% = 0.05; t = 12; n = ft = 2 ( 12 ) = 4; i = 𝑓 = 2

What is asked? Compound discount or compound interest I

P = F ( 1 + i)-n
P = 15,000 ( 1 + 0.05/2)-4
P = ₱ 13,589.26

Solving for compound discount,

I= F – P
= 15,000 – 13,589.26

= ₱ 1410.74
 Chapter 2(Module 5)
SHS General Mathematics
Basic Business Mathematics

Self-Assessment Questions
Solve the following problems. Show your solutions to support your answer.
SAQ

1. At what rate will ₱ 6,500 accumulate to ₱ 27,000 for 3 years and 6 months, if compounded
every 5 months?

2. Accumulate ₱ 25,000 for 2 years and 5 months at 6 ½%, compounded every two months.

3. Briefly explain the difference between a “ 7% compounded monthly for a year” and a “7%
simple interest for a year.”
 Chapter 2(Module 5)
SHS General Mathematics
Basic Business Mathematics

STOCKS, BONDS AND MUTUAL FUNDS

An investment is an asset or item acquired with the goal of generating

income or appreciation. In an economic sense, an investment is the purchase of
goods that are not consumed today but are used in the future to create wealth.
In finance, an investment is a monetary asset purchased with the idea that the
asset will provide income in the future or will later be sold at a higher price for a
profit. Many people engage in investment to earn money to improve their financial
status. People can choose from several investment options depending on their
desired conditions. These options are the following:

1. Stocks- ownership in a corporation, represent claim on a share of a

corporation’s assets and profits; and riskier and long-term investments.

2. Bonds- lending money to the issuer of the bonds for a set amount of time;
low-risk and short-term investment.

3. Real estate- a piece of land and any building or structure on it; long-term
investment; variety of investment instruments including personal home, rental
home, rental apartments, office space and land.

4. Mutual Funds- professionally managed open-ended investments; consist

of a variety of investment instruments including stocks, bonds, commodities and
money market securities; long term investment.

5. Precious metals- highly-valued metals; long term investment; investment

include gold, silver and platinum.

6. Collectibles- highly-valued rare and desirable items; long term

investment; investment instrument including antiques, coins, cars and art pieces.

All investments have different rates of return. The return of investment

(ROI) is a rate of revenues received for the amount invested in an item.

STOCKS and BONDS

Stocks represents share of ownership in a company. A share is a unit of ownership

of a corporation’s profits and assets. Ownership can be quantified by dividing the number
of shares owned by the number of shares issued.
 Chapter 2(Module 5)
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Basic Business Mathematics

1
Suppose five people formed a business with each contributing ₱2M. If this
Example

1
amount is equivalent to one share, then each one owns 5 of the business.

₱2M ₱2M ₱2M ₱2M ₱2M

2
2. Suppose four people formed a corporation with the following contributions:
Example

A B C D

₱20M ₱10M ₱10M ₱30M

2 1 3
If ₱10M is one part of the business, then A owns 7 , B and C own 7, and D owns 7.

Terminologies:

• A stockholder receives a certificate which contains details like the corporation’s

name, owner’s name, number of shares owned, certificate number, and par value.
• A dividend on a share is a payment made by the corporation to the shareholder
when the former realizes profit or has surplus. Dividend is based on par, not on
market value.
• Stocks are classified as common stock and preferred stock.

1. Common stock- type of stock where owners may vote for company directors
and attend stockholder’s meeting. During the meeting, the yearly performance and
future plans of the company are reviewed. Stockholders may present their
business ideas during the meeting.

2. Preferred stock- type of stock where owners do not usually have the voting
rights or the right to attend stockholder’s meetings. However, they have the
property when dividends are paid.
• Earnings per share is the amount of profit to which each share is entitled.
• Market cap is short for market capitalization; the amount of money one has to pay
if she/he bought every share of stock in a company; calculated by multiplying the
number of shares by the price per share.
• IPO, short for initial public offering, occurs when a company sells stock in itself for
the first time.
• Going public is a slang used when a company is planning an IPO.
 Chapter 2(Module 5)
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Basic Business Mathematics

• Underwriter is the financial institution or investment bank that is doing all of the
paperwork and orchestrating a company’s IPO.

A stockholder can make money from a stock in two ways: (1.) when earnings are paid out
in the form of dividends; (2.) when there is an increase in share per price. The total stock
return on investment (ROI) is the sum of appreciation in the price and dividends paid
divided by the original price of the stock.

1
Suppose you own shares of a company which just paid you ₱20 per share in annual
Example

dividends. If the original price per share is ₱1,000 and the current price is ₱1020, the
total ROI is:

Total stock ROI = Appreciation in price + Dividends = (1020-1000) + 20 = 4%

Initial Stock price 1000

Stock Table and Stock Quotes:

Below are a sample stock table and a few more stock terminologies that might help you
when reading stock quotes from a financial paper.

Stock quote interpretation from:

https://www.ccsdut.org/site/handlers/filedownload.ashx?moduleinstanceid=507&dat
aid=2222&FileName=reading%20a%20stock%20quote%20table.pdf

Columns 1 & 2: 52-Week Hi and Low - The highest and lowest prices at which a stock has
traded over the previous 52 weeks (one year). This typically does not include the
previous day's trading.

Column 3: Company Name & Type of Stock - The name of the company. If there are no
special symbols or letters following the name, it is common stock. Different symbols
imply different classes of stock; for example, "pf" means preferred stock.
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Column 4: Ticker Symbol - The unique alphabetic name which identifies the stock. On
financial TV, stock symbols and latest prices move along the ticker at the bottom of the
screen. If you are looking for stock quotes online, always search for a company by its
ticker symbol. If you don't know what a company's ticker symbol is, you can find it using
the SMG investor research site.

Column 5: Dividend Per Share - The annual dividend payment per share. If the space is
blank, the company does not currently pay dividends.

Column 6: Dividend Yield – The percentage return on the dividend, calculated as annual
dividend per share divided by price per share.

Column 7: Price/Earnings Ratio - Calculated by dividing the current stock price by

earnings per share from the last four quarters.

Column 8: Trading Volume - Total number of shares traded for the day, listed in hundreds.
To get the actual number traded, add "00" to the end of the number listed.
Column 9 & 10: Day High & Low - The maximum and the minimum prices people have
paid for the stock on this trading day.

Column 11: Close - The last trading price recorded when the market closed that day. If
the closing price is up or down more than 5% over the previous day's close, the listing for
the stock is bold-faced. Remember, you won’t necessarily get this price if you buy the
stock the next day because the price is constantly changing (even after the exchange is
closed for the day). The close is an indicator of past performance and, except in extreme
circumstances, is a guideline of what you should expect to pay.

1
Suppose you own 500 shares of a certain company, which pays ₱11 per share in
Example

annual dividends. If the current stock price is ₱120, the dividend yield on the
company’s stock is:

Dividend yield = Annual dividend per share = 11 = 92 %

Current stock price per share 120

Stock quotes are more convenient to get from the Internet. This method is better because
a shareholder gets more updated information to get stock quotes, the ticker symbol is
simply entered into the quote box of any major financial site.

Stock trading

Stocks are publicly bought and sold in the stock market, the main role of which is
to facilitate the process of buying and selling stocks. There are two types of stock markets:
primary and secondary. The primary market is where a company issues its shares for
the first time via an IPO. In the secondary market, commonly known as the stock market,
previously issued stocks are traded without the involvement of the companies which
 Chapter 2(Module 5)
SHS General Mathematics
Basic Business Mathematics

issued them some of the well-known stock markets include the New York Stock Exchange,
NASDAQ, London Stock Exchange, and Hongkong Stock Exchange.

Some Important tips:

• Invest in companies which you fully understand or are familiar with and whose
businesses make sense to you.
• Stay with the company for a while. Do not expect to gain a lot in your first week as
trading in stocks usually gives return in the long term.
• Do not fear fluctuations, but make informed decisions and do not panic when such
situations occur.
• It is prudent to keep a margin of safety (about 15%-20%) on the stock price. This
will hep you deal with sudden corrections the market may experience.
• Once you have plotted an investment plan for yourself-deciding on the amount to
invest, the particular stocks, and the time you pan to hold on to them-stay true or
stick to it.

BONDS

A bond is a loan. It is another way for corporations to raise funds. They issue bonds
to whoever wants to buy them. A buyer of a bond is lending money to the corporation
that issues it. The corporation, in return, promises to pay interest payments to the buyer
for the duration of the loan. The amount of interest and the schedule of payment depend
on the terms of the bond.

For the lender, a bond is a kind of investment, like a stock. The difference is that
stocks are not loans but represent partial ownership in a company, and the returns
represents a share in profits. Bonds are debt, whereas stocks are equity. For that reason,
stocks are riskier and more volatile-they closely reflect the success of a company. Bonds,
on the other hand, often have a fixed interest rate and a lower return. That is why bonds
are referred to as fixed income securities.

By purchasing equity (stocks), an investor becomes an owner in a corporation.

Ownership comes with voting rights and the right to share in any future profits. By
purchasing debt (bonds), an investor becomes a creditor to the corporation. The primary
advantage of being a creditor is that they have a higher claim on assets than shareholders
do. In case of bankruptcy, a bondholder will et paid before a shareholder. However, the
bondholder does not share in the profits if a company does well; he/she is entitled only
to the principal plus interest.

Types of Bonds

Businesses are not the only entities that can issue bonds. Governments sell them
as well.
• Government bonds are issued by governments to fund programs, meet payrolls,
and pay their bills.
 Chapter 2(Module 5)
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• Corporate bonds are issued by businesses to help them pay expenses. They have
a higher risk than government bonds but they can earn a lot more money.
• Zero-coupon bags make no coupon payments but instead are issued at a
considerable discount to par value. For example, a zero-coupon bond with a
₱ 1000 par value and 10 years to maturity is trading at ₱ 600 today for a bond that
will be worth ₱ 1000 in 10 years.

If you are interested to buy bonds, you can open an account with a bond broker.
Be warned though that most bond brokers require minimum initial deposit. If you cannot
afford the amount, look at a mutual fund that specializes in bonds. Research bonds just as
you would stocks. This involves investigating things like cash flow, debt, liquidity, and the
company’s business plan.

Think of a bond rating as the report card for a company’s credit rating. Companies
which are safe investment have a rating whereas risky companies have a low rating.

MUTUAL FUNDS

A mutual fund is an investment company that pools together money from different
investors and invest them. There are four basic types of mutual funds available in the
market categorized according to the investment objective of the fund:

• Money market fund invests purely in short-term (one year or less) debt
instruments.
• Equity fund invests primarily in shares of stock.
• Bond fund invests in a long-term debt instruments of governments or
corporations.
• Balanced fund invests both in shares of stock and debt instruments.

The mutual fund company issues share to the public that represent their holdings
in the fund. The net asset value per share (NAVPS) represents the price of one share. All
shares are bought and sold using the NAVPS, which changes every business day
depending on the market performance of the fund.

Mutual funds are, by definition, made up a lot of different investments. This avoids
the “putting all of your eggs in one basket” problem. They are managed by professional
investment managers who buy and sell securities for the most effective growth of the
fund.

A balanced fund is one that combines a stock component, a bond component, and
sometimes, a money market component, in a single portfolio. These funds generally stick
to a relatively fixed mix of stocks and bonds that reflects either moderate (higher equity
component) or conservative (higher-fixed income component) orientation. For example,
a conservative balanced fund might invest in a conservative mix of underlying investment
assets such as 40% stocks, 50% bonds, and 10% money market.

Parts of a balanced fund:

 Chapter 2(Module 5)
SHS General Mathematics
Basic Business Mathematics

• Instead of having to select a stock fund (or several stock funds) and a bond fund
(or a several bond funds), an investor can pick ne balance fund which
automatically chooses the underlying stock and bond investments for him/her.
• It is good choice when the investor does not understand investing well and is not
ready to hire a financial adviser.
Cons of a balance fund:

• The fees in a balanced fund will sometimes be a bit higher because the investor
has someone else doing the work of selecting the underlying funds.
• Within the balanced fund, the investor cannot choose the amount of investment
that is what type of stocks or in what type of bonds. Someone else is making those
choices for him/her.

Balanced fund does well when stock markets are going through a difficult phase as
they have a cushion of debt.

1
Suppose you want to invest ₱ 500,000 with the Sunrise Financial equity fund.
Example

Suppose also at the time of you made the investment, the NAVPS for this particular
equity fund is ₱ 3.1201.

The value of your money in terms of number of shares is 500,000 ÷ 3.1201 =

₱ 61,236.96.

This represents a gain of 12.25% over your original investment. On the other
hand, any loss in the NAVPS will translate to a deduction from the principal you invested

MORTGAGE

Mortgage is a long-term loan to buy property, such as a house and land.

The "security" for the loan is usually the property itself. Which means if you stop
making payments on the loan, they can sell your property to get their money back.

Let B be borrowed at an interest rate of i per month, where i is the annual rate
divided by 12, and assume the mortgage needs to be paid back in n months. Then the
monthly payment is given by

Monthly payment= B (i) (1 + i)n

(1 + i) n -1

For example, ₱100,000 on a 360-month (30-year) mortgage at a monthly rate of 0.0075

( 9% annually) would require a monthly payment of

Monthly payment = 100,000 (0.0075)( 1.0075)360 = ₱ 804.62

1.0075360 - 1
 Chapter 2(Module 5)
SHS General Mathematics
Basic Business Mathematics

Self-Assessment Questions
Stocks and Bonds:
SAQ

1. Nancy earns ₱ 750,000 annually and is able to place 1/5 of this in savings. If she uses 50% of
her savings to buy some stocks every year, how much will she be investing annually in stocks?

2. A company declared a 2 1/5% dividend on stock with a par value of ₱ 750. Joey owns 110
shares. What is the amount of his dividend?

Mutual Funds:

1. Seventy ₱ 1,000 bonds are purchased by Jim at 92.15 and sold at 110.23. If the broker’s fee is
₱ 200 per transaction, find the amount earned by Jim.

2. An amount of ₱ 500,000 was invested in a balanced fund. After 5 years, the total market
value is ₱ 624,380. Find the return of investment.
 Chapter 2(Module 5)
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PROBLEM SET No. 1

I. Show necessary solutions/explanations to support your answer.
1. How much is the interest if you loan ₱ 350,000 for one year at a simple interest
rate of 8%?

2. Which of the following is also referred as Banker’s rule? Explain your answer.

a. exact interest exact time

b. exact interest approximate time

c. ordinary interest exact time

d. ordinary interest approximate time

e. none of these

3. What is the approximate time from April 8, 1999 to October 25, 1999?

4. How many ₱500 monthly payments can be withdrawn from an account containing
₱35,000 and invested at 8% converted monthly. The first withdraw takes place in
one
Month.

5. On November 15, 2020, Jose Boliva went to BDO Bank and made a loan of ₱100,000
At 10% ordinary interest for 90 days. What is the maturity value of the loan?

II. In your own understanding, explain the following terms:

1. bonds

2. stocks

3. mutual funds

PROBLEM SET No. 1

 Chapter 2(Module 5)
SHS General Mathematics
Basic Business Mathematics

Name: ______________________________________________________________ Course & Year: _________________________

Write your answers here.
Detached this Page

SUMMARY

SIMPLE INTEREST
 Chapter 2(Module 5)
SHS General Mathematics
Basic Business Mathematics

Interest is the amount paid by a borrower to a lender for a credit or the amount gained
on an investment. This value of the interest depends largely on the interest rate; the
borrowed or invested amount-referred to as the principal, and the length of time the
principal is invested or borrowed. In symbol,

I = Prt

where I is the simple interest

P is the principal
r is the interest rate, and
t is the length of time

COMPOUND INTEREST

Compound interest is the amount added to the principal of an investment or a loan so

that the added interest also earns interest from that on. This addiction of interest to the
principal is called compounding.

FUTURE VALUE IN A COMPOUND INTEREST

The general formula in finding the future value in a compound interest is given by
F = P (1 + i )n

Where F is the future value in a compound interest;

P is the principal amount
I is the interest rate per conversion, also referred to as periodic interest rate; and
n is the number of conversion period or the total number of payments.

𝒋
To get the value of i in the formula, use i = 𝒌 where j is the nominal rate or the
quoted interest rate and f is the frequency of conversion.

STOCKS, BONDS AND MUTUAL FUNDS

The following are the several investment options where in people can
choose:

1. Stocks- ownership in a corporation, represent claim on a share of a

corporation’s assets and profits; and riskier and long-term investments.

2. Bonds- lending money to the issuer of the bonds for a set amount of time;
low-risk and short-term investment.

3. Real estate- a piece of land and any building or structure on it; long-term
investment; variety of investment instruments including personal home, rental
home, rental apartments, office space and land.
 Chapter 2(Module 5)
SHS General Mathematics
Basic Business Mathematics

4. Mutual Funds- professionally managed open-ended investments; consist

of a variety of investment instruments including stocks, bonds, commodities and
money market securities; long term investment.

5. Precious metals- highly-valued metals; long term investment; investment

include gold, silver and platinum.

6. Collectibles- highly-valued rare and desirable items; long term

investment; investment instrument including antiques, coins, cars and art pieces.

All investments have different rates of return. The return of investment

(ROI) is a rate of revenues received for the amount invested in an item.

FEEDBACK

As you go along this module, what lesson did you feel the most difficult for you?
Try to list them down and give time to consult your teacher for further discussion.

REFERENCES

Essential Mathematics in the Modern World (2018). Nocon, R & Nocon, E.

Mathematics in the Modern World (2018). Aufmann, R., Lockwood, J., Nation, R. Clegg,
D., Epp, S., Abad, E. Cengage Learning.

Worktext in General Mathematics(2016). Flores, Maricar; Gagani, Ray Ferdinand M. &

Ypanto, Quennie C. C & E Publishing Company.

https://mathworld.wolfram.com/Mortgage.html