Republic of the Philippines

Marikina Polytechnic College

2 Mayor Chanyungco St., Sta. Elena Marikina City

General Mathematics
A detailed lesson plan
SIMPLE ANNUITY

TEACHING
TEACHING
LEARNING CONTENT AIDS AND
OBJECTIVES STRATEGIES VALUING
DEVICES
At the end of the lesson, A. Preparation
the student should be able
Teacher's Activity Student’s Activity
to:

1. define the simple

annuity “Good afternoon class” “Good afternoon ma’am”
2. find the future value
“Let us all stand-up for
and present value of
the opening prayer”
problems involving
simple annuity “Mr. Casubha, please (Mr. Casubha, will go in
Respect
3. appreciate the lead the prayer.” front and lead the prayer)
importance of simple
annuity “Amen”
“Thank you Mr.
Casubha. Before you (the students will arrange
take your sit, please pick their chair and clean their
up the pieces of paper area)
and check the
alignment of your chair
before you take your
seat”
“ May I request the leader of ( The leader will report the
each group to report who absentee(s) of the class )
is/are the absentee(s).”

B. MOTIVATION

Teacher's Activity Student’s Activity

" For our discussion for today,

you will be having eight
groups. For each recitation
you will earn points and the Cooperation,
Cards,
group who got a highest point Appreciation
blank
will receive a reward and for
paper,
other groups you will also
scotch
receive but it’s not the same
tape,
for the group who got the
marker
highest."

"Before we start, let’s have (The students will listen)

first an activity, I have 6
jumbled-letter words to be
arranged. The words were
examples of installment-based
bills paid by our parent, etc."

“Do you understand?” “Yes Ma’am”

Life Insurance Pension NEED AN INSTALLMENT

Appliances Tuition Fee Car
Car House and Lot
Life Insurance
 NEED AN INSTALLMENT
Appliances

Tuition Fee

House and Lot

(The group who can answer

will receive a point.)

“To the person who answered

first, please stand.” (The student will stand)
Inquiry
“What is your insight about the approach
activity? Is it difficult to identify
“I think it is easy to identify the
the example where people
example where people pay
pay by installment?”
by installment.”
“Payments by installment are
done periodically, and in
equal amounts. This payment
scheme is called Annuity.”

C. PRESENTATION

Annuity it is a sequence of payments made at equal (fixed) intervals

or periods of time.

Payment interval it is the time between successive payments.

Simple annuity it is an annuity where the payment interval is the same

as the interest period.
Ordinary annuity it is a type of annuity in which the payments are
made at the end of each payment interval.

Term of an annuity or t it is the time between the first payment interval

and last payment interval.

Regular or periodic payment or R is the amount of each payment

Amount (Future Value) of an annuity F is the sum of future values of

all the payments to be made during the entire term of the annuity

Present value of an annuity or P is the sum of present values of all the

payments to be made during the entire term of the annuity.

Amount (Future Value) of an Ordinary Annuity

( 1  j )n  1
FOA R
j

where:
R is the regular payment,
j is the interest rate per period, and
n is the number of payment

Example1: Suppose Mrs. Santos would like to save ₱3,000 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?

Solution.
Given: R (periodic payment) = 3,000
t (term)= 6 months
𝒊(𝟏𝟐) (interest rate per annum) = 0.09
m (number of conversions per year) = 1
 0.09
𝒋 (interest rate per period) = = 0.0075
12
n (number of payment) = 6(1) = 6
Find: Amount (future value) at the end of the term, F
Solution:
( 1  j )n  1
FOA  R
j
( 1  0.0075 )6  1
FOA  3 , 000
0.0075
FOA  18 , 340.89
Answer: The amount of Mrs. Santos savings after 6 months is
₱18,340.89.

Example2: In order to save for her high school graduation, Marie

decided to save ₱200 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?

Solution.
Given: R = 200
m = 12
𝒊(𝟏𝟐) = 0.250% = 0.0025
0.0025
𝒋 = 12 = 0.0002083
t = 6 years
n = tm = 6(12) = 72 periods
Find: Amount (future value) at the end of the term, F
Solution:
 ( 1  j )n  1
FOA  R
j
( 1  0.0002083 )72  1
FOA  200
0.0002083
FOA  14 , 507.00

Answer: Hence, Marie will be able to save ₱14,507.00 for her

graduation.

Present Value of an Ordinary Annuity

1  ( 1  j ) n
POA  R
j

where:
R is the regular payment,
j is the interest rate per period, and
n is the number of payments

Example3: (Recall the problem in Example1) Suppose Mrs. Santos

would like to save ₱3,000 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?

Solution.
Given: R (periodic payment) = 3,000
t (term) = 6 months
𝒊(𝟏𝟐) (interest rate per annum) = 0.09
m (number of conversion per year) = 1
0.09
𝒋 (interest rate per period) = 12 = 0.0075
n (number of payment) = 6(1) = 6
 Find: Present Value, P
Solution:

1  ( 1  j ) n
POA R
j
1  ( 1  0.0075 )6
POA  3, 000
0.0075
POA  17 , 536.79

Answer: The present value of Mrs. Santos is ₱17,536.79.

NOTE!

The cash value or cash price is equal to the down payment plus
the present value of the installment payments.

Example4: Mr. Dela Cruz paid ₱200,000 as down payment for a car.
The remaining amount is to be settled by paying ₱16,200 at the end
of each month for 5 years. If interest is 10.5% compounded monthly,
what is the cash price of his car?

Solution.
Given: down payment = 200,000
R = 16,200
𝒊(𝟏𝟐) = 0.105
m = 12
0.105
𝒋 = 12 = 0.00875
t = 5 years
n = tm = 5(12) = 60 periods
Find: Cash value or cash price of the car
Solution:
 1  ( 1  j ) n
POA  R
j
1  ( 1  0.00875 )60
POA  16 , 200
0.00875
POA  753, 702.20

Cash Value = Down Payment + Present Value

 200 , 000  753, 702.20
 953, 702.20
Answer: The cash price of the car is ₱953,702.20

D. ENRICHMENT

Teacher's Activity Student’s Activity

Directions: Each group will be
given a word problem. Write (the students will participate
this on 1 whole sheet of bond actively.)
paper. The activity can be
answered only in 10 minutes.
The group who can finish first
will be given points.

1. The buyer of a lot pays

₱50,000 cash and
₱10,000 every month for
10 years. If money is 8%
compounded monthly,
how much is the cash
value of the lot?

2. Peter started to deposit

₱5,000 quarterly in a
fund that pays 1%
compounded quarterly.
How much will be in the
fund after 6 years?
 E. GENERALIZATION

Teacher's Activity Student’s Activity

“Let us have some recap, (Some students will raise their

what is the formula in finding hands, and answer the
the present value for question of the teacher)
ordinary annuity?”

“Very Good. How about the (Some students will raise their
formula for finding the future hands, and 2 of them will be
value?” called to answer the
question of the teacher)

(The teacher will call 2

students to answer the (Some students will raise their
question of the teacher) hands, and answer the
question of the teacher)
Enhancing
“Very good, thank you. (Some students will raise their Direct the critical
hands, and answer the Flashcards
What about the importance instruction thinking
of simple annuity in real-life question of the teacher) skills
situation?”

“Any clarifications? If none,

please keep all your notes
and we will have a short
quiz.”

F. EVALUATION

Directions: Read the problem and understand carefully. Write this

on 1 whole sheet of bond paper.
 1. To pay for his debt at 12% compounded quarterly, Ruben
committed for 8 quarterly payments of ₱28,491.28 each. How
much did he borrow?

2. The buyer of a car pays ₱169,000 cash and ₱12,000 every

month for 5 years. If money is 10% compounded monthly, how
much is the cash price of the car?

Answer key:
1. V
2. V

G. ASSIGNMENT

Directions: Read the problem and understand carefully. Write this

on short size bond paper.

1. An appliance is for sale at either (a) ₱15,999 cash or (b) on

terms, ₱1,499 each month for the next 12 months. Money is 9%
compounded monthly. Which is lower, the cash price or the
present value of the installment terms? Explain.

2. Find the present value and the amount (future value) of an

ordinary annuity of ₱5,000 payable semi-annually for 10 years
if money is worth 6% compounded semi-annually.

Answer key:

Reference:
Teaching Guide for Senior High School General Mathematics Core
Subject
Prepared by: Checked by:
 Dela Cruz, Daisiree U.
Somera, Franchesca May C. Ms. Yolanda S. Adeva
Student Teacher Resource Teacher