Mathematics as a tool for Business and Finance February 24, 2021 postadmin Post in Uncategorized Page 1 of 7 Course Title:MATHEMATICS IN THE MODERN WORLD MODULE NO. 4Mathematics as a tool for Business and Finance In this topics the real world scenarios referring on the business and financial management aregiven much significance wherein, students are given the privilege to search and studiesliteratures that expound on how investing and borrowing impacted one’s life as to their livingstandards, and on how advantageous if anyone could manage their savings, stocks, bonds, loansand credit cards. Perhaps, it is worth enough to realize that this topics profoundly helps everyoneunderstood the importance of Mathematics in business and finance.LESSON NO.3LESSONTITLEInvesting and Borrowing (Personal Finance)SpecificLearningOutcomes:During the learning engagements, the students should be able to:1. Explain the following concepts on personal finance: savings, stocks andbonds, loans and loan repayment;2. Explain how credit works and how is it beneficial or disadvantageous topeople;3. Solve real-world problems related to personal financeTEACHING LEARNING ACTIVITIESProcessing Activities:Activity 1 – Calculating Simple Interest:Investing or Borrowing Funds.Student should define and explain the algorithms on Simple and Compounded Interest. It isadvantageous if they are going to visit these links: https://www.youtube.com/watch?v=IIzpoxjzy8g; https://www.investopedia.com/terms/c/compoundinterest.asp#what-is-compound-interestThe links display detailed information on how to solve simple interest and compounded interest.There are numerous sample on problems and answers about the topic wherein students areguided on how to apply simple and compounded interest. Simple definition and procedures ofthe terms, below are revealed:What Is Simple Interest?Simple interest is a quick and easy method of calculating the interest charge on a loan. Simpleinterest is determined by multiplying the daily interest rate by the principal by the number ofdays that elapse between payments.Simple Interest=P×I×Nwhere: P=principalI=daily interest rateN=number of days between payments Page 2 of 7 NOW, DO THE TASK: Use simple interest in finding the ending balances,*Ending Balances may be obtained when you add principal amount plus interest earned…Hint: visit this link to guide you (https://www.youtube.com/watch?v=IIzpoxjzy8g)(The link provides samples on finding the ending balance of money using simple interest.)1. CIMB Bank offers as low as 3% interest rate for loans payable in 3 years If you loan an amount of Php15, 000, how much interest will you earn within the payableduration of the loan and how much is the total amount you are going to pay in the bank?2. A commercial bank in the country offers at least 9% interest rate for investments within adecade… If you invest an amount of Php25, 800, how much interest will you earn within theduration of investment and how much is the total amount you are going to earn afterinvesting in this particular commercial bank? Page 3 of 7 Activity 2. Calculating CompoundedInterestWhat Is Compound Interest?Compound interest (or compounding interest) is interest calculated on the initial principal,which also includes all of the accumulated interest from previous periods on a deposit or loan.Thought to have originated in 17th century Italy, compound interest can be thought of as“interest on interest,” and will make a sum grow at a faster rate than simple interest, which iscalculated only on the principal amount.Calculating Compound InterestCompound interest is calculated by multiplying the initial principal amount by one plus theannual interest rate raised to the number of compound periods minus one. The total initialamount of the loan is then subtracted from the resulting value.The formula for calculating compound interest is:Compound Interest = Total amount of Principal and Interest in future (or FutureValue) less Principal amount at present (or Present Value)= [P (1 + i)n] – P= P [(1 + i)n – 1](Where P = Principal, i = nominal annual interest rate in percentage terms, and n = number ofcompounding periods.)NOW, DO THE TASK:1. Take a three-year loan of $10,000 at an interest rate of 5% that compounds annually.What would be the amount of interest?Self-study Task: Understanding Mathematics as a tool in business and finance Tracing interest rates and its exponential effect for a period of time. For more detailedinformation visit this link https://www.youtube.com/watch?v=DGwp_jsvauE; Privilege of having share of stocks and bonds, borrowing, and lending discussed in thislink: https://economictimes.indiatimes.com/definition/Stocks; andhttps://www.econlib.org/library/Topics/Details/bonds.html; Risks of using a credit card to buy investments, detailed information on this link:https://www.moneysmartmanitoba.ca/preservation-risk-management/scams-fraud/typesof-fraud/credit-card-investing/; Page 4 of 7 Activity 3Projecting Savings vs. Borrowing using Thematic approach by analyzing real life scenarioson educational cost as it goes saying that “Saving now or Borrowing later”.PERSPECTIVE (from this link: https://www.scholarshare529.com/plan/borrowing.shtml)Using both loans and savings to pay for college is a pretty common strategy today, but there aredefinitely factors you’ll want to consider when measuring the importance of college savingsagainst other competing financial priorities — including the impact of debt on the student’slifetime earning potential and how saving versus borrowing stacks up dollar for dollar. The goodnews is saving doesn’t have to be painful. There are many best practices which can make savingan easy, budget-friendly process.Work on the following: Savings Stocks and Bonds Loans Credit CardsConstruct a synthesis of your insights and understanding about each of the abovementioned 4concepts… Don’t forget to cite mathematical examples (computations) on each of the 4 concepts Page 5 of 7 FORMATION ACTIVITY:Give your responses on the following:1. Why is considering personal financial management an important aspect of living or survivingespecially in these times of global crisis?2. What is your stand on the following cases:2.1 A newly-wed couple saved money for the education of their child through an educationalplan instead of borrowing loans.2.2 A newly-wed couple took a house loan from the PAG-IBIG fund immediately after theirwedding instead of saving for a number of years and construct a house at an old age.2.3 An ordinary individual with minimum salary owning a credit card.3. Is it wise to own or hold credit card? Why or why not? Page 6 of 7 SYNTHESIS ACTIVITY:a. What are the similarities and differences of investment, loans, and bonds? Organize it into aVenn diagram, and explain the concept behind your diagram.b. Cite a personal experience or a case of a close friend or relative related to managing personalfinance. What do you observe on his/her/your personal management? Honestly, areyour/your friend’s financial management measures effective or not? Write your personalinsight about the case.Go to the following link for further understanding:https://www.cengage.com/resource_uploads/downloads/1111990905_341397.pdfRESOURCES:Chen, J. (n.d.). Learn About Simple Interest. Investopedia. Retrieved July 21,2020, from https://www.investopedia.com/terms/s/simple_interest.asp;Kagan, J. (n.d.). Compound Interest. Investopedia. Retrieved July 21, 2020,from https://www.investopedia.com/terms/c/compoundinterest.asp;OSAGIE, A. F. (2018). CRITICAL SUCCESS FACTORS FORSUSTAINABLE GREEN CLEANING SERVICES ANDORGANISATIONAL PERFORMANCE; Page 7 of 7 Kensler, L. A., & Uline, C. L. (2016). Leadership for green schools:Sustainability for our children, our communities, and our planet. Taylor& Francis; andFreed, A. B. (2008). Environmental service learning: The clean air zone servicelearning project. Science Scope, 32(4), 46;What is Stocks? Definition of Stocks, Stocks Meaning. (n.d.). The EconomicTimes. Retrieved July 23, 2020, fromhttps://economictimes.indiatimes.com/definition/Stocks;Bonds, Borrowing, and Lending. (n.d.). Econlib. Retrieved July 23, 2020, fromhttps://www.econlib.org/library/Topics/Details/bonds.html;Using credit cards to purchase financial investments. (n.d.). Money Smart.Retrieved July 23, 2020, fromhttps://www.moneysmartmanitoba.ca/preservation-riskmanagement/scams-fraud/types-of-fraud/credit-card-investing/.Nocon & Nocon (2018). Essential Mathematics for the Modern World. C & EPublishing, Inc.