GENERAL MATHEMATICS
GRADE 11
“SIMPLE & GENERAL ANNUITY”
O BJE CT IVE S
At the end of the session, 80% of the learners
should be able to;
a. illustrate simple annuity and annuity due;
b. solve the future value and present value of
simple annuity and annuity due; and
c. compute problem involving simple annuity
and annuity due.
Direction: Find the words that is related to
interest. COLUMN
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
1
2
3
4
5
6
7
8
ROWS
9
10
11
12
13
14
15
16
17
Direction: Convert the following:
1
1. 14 months= ______ year
6
2. 198 days= ______ months
6
3. 150 hours= ______ days
4. 2 years =______
27 months
5. 1 years = ______ days
420
Definition of Terms
• Annuity – a sequence of payment made at
equal (fixed) intervals or periods of time.
• Payment Interval – the time between
successive payments. According to payment
interval and interest periods.
• Simple Annuity – an annuity where the
• Ordinary Annuity or Annuity Immediate – the
payments are made at the end of each
payment interval.
• Annuity Due - the payments are made at the
beginning of each payment interval.
• Regular or Periodic Payment (R) - amount of
each payment.
• Nominal rate () - annual rate, usually in
• Frequency of conversion (m) - number of
conversion periods in one year.
• Term of an Annuity (t) – time between the
first payment interval and last payment
interval.
𝑟 𝑎𝑛𝑛𝑢𝑎𝑙𝑟𝑎𝑡𝑒 𝑜𝑓 𝑖𝑛𝑡𝑒𝑟𝑒𝑠𝑡
• Rate 𝑖=
of 𝑚 =
interest for each𝑜𝑓
𝑓𝑟𝑒𝑞𝑢𝑒𝑛𝑐𝑦 conversion period.
𝑐𝑜𝑛𝑣𝑒𝑟𝑠𝑖𝑜𝑛
𝑛=𝑚𝑡
• Amount of an Annuity (F) – sum of the future
values of all the payments to be made during
the entire term of the annuity.
( 1+𝑖 )𝑛 − 1
𝐹 =𝑅
𝑖
• Present Value of an Annuity (P) - sum of the
present values of all the payments to be made
during the entire term of the
−𝑛
annuity.
1 − ( 1+𝑖 )
𝑃= 𝑅
𝑖
EXAMPLE
1. For her to save for her high school
graduation, Marie decided to save P200 at the
end of each month. If the bank pays 0.250 %
compounded monthly, how much will her
money be at the end of 6 years?
GIVEN: ( 1+𝑖 )𝑛 − 1
FORMULA: 𝐹 = 𝑅 𝑖
R = ₱200 ( 1+0.0002083333 )72 − 1
m = 12 𝐹 =200
0.0002083333
r = 0.250% or 0.0025
t=6 𝐹 =₱ 14 ,507.00
i = = 0.0002083333
n = tm = (6)(12) = 72
EXAMPLE
2. Suppose Mr. Alvin would like to save P3000
at the end of each month. For six months in a
fund that gives 9 % compounded monthly, how
much is the amount or future value of her
savings after 6 months?
GIVEN: ( 1 +𝑖 ) 𝑛 − 1
FORMULA: 𝐹 = 𝑅
𝑖
R = ₱3000 ( 1+0.0075 )6 − 1
𝐹 = ₱ 3000
m = 12 0.0075
r = 9% or 0.09 F
t = 6 months =
i = = 0.0075
n = tm = (0.5)(12) = 6
periods
EXAMPLE
Mr. Ribaya paid P200, 000 as down payment for a
car. The remaining amount is to be settled by
paying P16, 200 at the end of each month for 5
years. If interest is 10.5 % compounded monthly,
what is the cash price of his car?
Example
Mr. Ribaya paid P200, 000 as down
payment for a car. The remaining amount
is to be settled by paying P16, 200 at the
end of each month for 5 years. If interest
is 10.5 % compounded monthly, what is
the cash price of his car?
Annuity Due
• Amount of an Annuity Due () - the
payments are made at the beginning of
each payment interval.
[
𝑆 𝑑𝑢𝑒 = 𝑅
( 1+𝑖 )1+𝑛 − 1
𝑖
−1 ]
• Present Value of Annuity Due ()
[ ]
1 −𝑛
1− ( 1+𝑖 )
𝐴 𝑑𝑢𝑒 = 𝑅 +1
𝑖
EXAMPLE
1. Nathalie deposited ₱7,500 in her
account at the beginning of each three
months at 6% compounded quarterly. How
much will be in her account on August 17,
2015 if she makes her first deposit in
August 17, 2012.
EXAMPLE
2. How much should be deposited in an
account at the beginning of each quarter in
order to have ₱95,000 after 5 years at 12.5%
compounded quarterly?
EXAMPLE
3. What is the present value of an annuity due
whose semi-annual payment is
EXAMPLE
4. Roger buys a television for ₱45,600. He
pays ₱15,000 down payment and pays the
balance is 12 equal monthly payments at the
beginning of each month. If interest is 12%
compounded monthly, how much is each
payment?
Direction: Answer the following problem by showing
your complete solutions.
1. What is the present value of a simple annuity with
24 quarterly payments of 1,250 each if the interest if
9% compounded quarterly.
2. To save for a child’s education a family invests 3,400
at the end of each three-month period in a fund
paying 10% compounded quarterly. How much
money will be in the fund at the end of 10 years?
3. What is the present value of an annuity due whose
monthly payment is 3,500 for 4 years if money is
worth 12% compounded monthly?
4. Gerry agrees to make semi-annual payments of
12,400 at the beginning of each 6 months to
discharge a debt due in 4 years. If money is worth
10% compounded semi-annually, how much does he
owe?
SEE YOU ON NEXT PRESENTATION
THANK YOU
Q U IZ
Direction: Solve the present value P, and amount F of the following
ordinary annuities.
1. Quarterly payments of P2000 for 5 years with interest rate of 8 %
compounded quarterly.
2. Semi-annual payments of P8000 for 12 years with interest rate of
12 % compounded semi-annually.
3. Daily payments of P50 for 30 days with interest rate of 20 %
compounded daily.
4. Find the amount of an annuity due of 4,800 payable at the
beginning of every 6 months for 3 years at 11% compounded
semi-annually.
