🏦 I.
SIMPLE AND COMPOUND INTEREST
🔹 Key Concepts
Simple Interest (SI) is calculated only on the original principal.
Formula:
I =P ×r ×t
where
P = Principal, r = rate (in decimal), t = time (in years)
Compound Interest (CI) adds interest to the accumulated total after
each period.
Formula:
A=P¿CI =A−P
where n = number of compounding periods per year.
🔹 Key Differences
Simple
Feature Compound Interest
Interest
Interest computed Principal + accumulated
Principal only
on interest
Grows Linear Exponential
Short-term
Best for Long-term investments
loans
🔹 Reminders
Increasing the frequency of compounding (e.g., quarterly, monthly)
increases total interest.
Investors benefit more from compound interest, while borrowers pay
more over time.
🔹 Sample Problem
If ₱1,500 is invested at 8% simple interest for 5 years:
I =1500 ×0.08 × 5=₱ 600
💰 II. ANNUITIES AND PRESENT VALUE
🔹 Annuity
A series of equal payments made at regular intervals.
Type Definition
Simple Payment and compounding periods are
Annuity the same.
General
Payment and compounding periods differ.
Annuity
Deferred
Payments begin after a waiting period.
Annuity
🔹 Formulas
Future Value (FV):
FV =R ¿ ¿
Present Value (PV):
PV =R 1−¿ ¿
where R = regular payment, i = interest per period, n = total payments.
🔹 Key Ideas
Present Value (PV): current worth of future payments discounted to
today.
Future Value (FV): total amount accumulated after interest.
Use general annuity formula when compounding ≠ payment period.
📊 III. STOCKS, BONDS, AND BUSINESS LOANS
🔹 Stocks
Represent ownership in a corporation.
Earn through dividends and capital gains.
Traded on the stock market (secondary market).
🔹 Bonds
Represent debt or a loan to a company or government.
Pay fixed interest over time.
Traded in primary (new issues) and secondary (resale) markets.
🔹 Differences
Feature Stocks Bonds
Ownershi
Yes No
p
Risk Higher Lower
Dividen Fixed
Return
ds interest
Nature Equity Debt
🔹 Business Loans
Used for expansion, equipment, or cash flow management.
Evaluated based on purpose, terms, and collateral.
🔹 Example
Businesses prefer loans to avoid draining savings and to leverage growth.
🧠 IV. LOGIC AND REASONING
🔹 Propositions
A proposition is a statement that can be true or false.
Example: “The sky is blue.”
🔹 Compound Propositions
Use logical connectives:
Symb
Meaning Example
∧ P ∧ Q: Both true
ol
P ∨ Q: At least one
AND (conjunction)
∨ OR (disjunction)
true
→ IF…THEN (implication) P→Q
IF AND ONLY IF
↔ P↔Q
(biconditional)
~P: Opposite truth
~ NOT (negation)
value
🔹 Conditional Statements
“If P, then Q” → P → Q
Example: “If it rains, I will bring an umbrella.”
🔹 Truth Tables
Used to test whether an argument is valid, contradictory, or a tautology
(always true).
🔹 Types of Logical Reasoning
Type Description Example
Deducti From general to All men are mortal; Socrates is a man →
ve specific Socrates is mortal.
Inductiv From specific to Some students are late → Students are always
e general late (fallacy).
Fallacy Faulty reasoning “One student failed, so all students failed.”
🧾 V. APPLICATION & PROBLEM SOLVING
🔹 Financial Calculations
Identify what’s given (P, r, t, n, R).
Choose the correct formula (SI, CI, PV, FV).
Substitute and compute logically.
🔹 Decision-Making
Compare loan options or investment returns using formulas.
For amortization: prepare a schedule showing payments, interest, and
remaining balance.
🔹 Logical Construction
Symbolize and evaluate arguments.
Identify valid, invalid, or tautological statements.
✨ Summary of Key Formulas
Concept Formula Description
Simple Interest I =Prt Interest on principal only
Includes accumulated
Compound Interest A=P¿
interest
Present Value of
PV =R 1−¿ ¿ Current worth of payments
Annuity
Future Value of
FV =R ¿ ¿ Total amount accumulated
Annuity
Fixed monthly payment
Loan Amortization A=Pi ¿ ¿
formula