● The domain is the set of all possible values

FUNCTIONS that the variable x can take (while still being

a function). If x can take any value, then the
A relation is a rule that relates values from one set domain is all real numbers (ℝ).
of values (called the domain) to another set of values ● The range is the set of all y-values that the
(called the range). It is any set of ordered pairs function f(x) produces.
(x,y). It may be a one-to-one correspondence,
one-to-many correspondence, or many-to-one With these definitions, let us try to identify the
correspondence. domain for each relation using set builder notation:
1. 𝑦 = 2𝑥 + 1
A function is a relation where each element in the 2. 𝑦 = 𝑥 + 1
domain is related to only one value in the range. No 3. 𝑦 =
2𝑥+1
𝑥−1
two ordered pairs must have the same x-value. Using
functional notation, we can write f(x) = y, read as “f
Answer:
of x is equal to y.”
1. {x : x ∈ ℝ} — this is because any value can be
input in the variable x.
Example:
2. {x : x ∈ ℝ, x ≥ -1} — this is because any value
1. Which of the following relations are
except those that are less than -1 can be
functions?
input in the variable x. Less than -1 values
f = {(1,2), (2,3), (3,5), (4,7)}
make the radicand negative.
g = {(1,3), (1,4), (2,5), (2,6), (3,7)}
3. {x : x ∈ ℝ, x ≠ -1} — this is because any value
h = {(1,3), (2,6), (3,9)}
except -1 can be input in the variable x.
Putting -1 in the denominator makes it 0, thus
Answer: the relations f and h are functions because
making the function undefined.
no two ordered pairs have the same x-value.
Meanwhile, g is not a function because (1,3) and (1,4)
and (2,5) and (2,6) are ordered pairs with the same
x-value.
Piecewise Functions are functions defined by
multiple sub-functions, where each sub-function
applies to a different interval in the domain.

A relation between two sets of numbers can be

Example:
illustrated by a graph in the Cartesian plane, and that
1. A user is charged ₱300 monthly for a
a function passes the vertical line test.
particular mobile plan, which includes 100
free text messages. Messages in excess of
Vertical Line Test
100 are charged ₱1 each. Represent the
➔ A graph represents a function if each vertical
monthly cost for text messaging using the
line intersects the graph only once.
function t(m), where m is the number of
messages sent in a month.

Answer: The cost of text messaging can be

expressed by the piecewise function:

not a function function

 Multiplication:
EVALUATING FUNCTIONS
(a) Factor the numerator and denominator.
(b) Common factors in the numerator and
Evaluating a function means replacing the variable in denominator can be cancelled.
the function, in this case x, with a value from the (c) Multiply the numerators together to get the
function's domain and computing for the result. new numerator. Multiply the denominators
together to get the new denominator.
Examples:
1. Evaluate the following functions at x=3: 2
𝑥 −4𝑥−5
2
𝑥 −5𝑥+6
Example: Find the product of and
a. 𝑓(𝑥) = 𝑥 − 3 2
𝑥 −3𝑥+2
2
𝑥 −3𝑥−10
2
b. 𝑔(𝑥) = 𝑥 − 3𝑥 + 5
3 3 Solution:
c. ℎ(𝑥) = 𝑥 + 𝑥 + 3
(a) Rewrite in terms of its prime factors:
2. For what values of x can we not evaluate the
function 𝑓(𝑥) =
𝑥+3
𝑥 +4
2 ? ( (𝑥+1)(𝑥−5)
(𝑥−2)(𝑥−1) )( (𝑥−2)(𝑥−3)
(𝑥+2)(𝑥−5) )
(b) Cancel out common factors:
Answers:
1. We substitute 3 to all the x-variables. ( (𝑥+1)
(𝑥−1) )( (𝑥−3)
(𝑥+2) )
a. 𝑓(3) = 3 − 3 = 0 (c) Multiply numerators and denominators:
2
b. 𝑔(3) = (3) − 3(3) + 5 = 5
2
(𝑥+1)(𝑥−3) 𝑥 −2𝑥−3
(𝑥−1)(𝑥+2)
or 2
3 3 𝑥 +𝑥−2
c. ℎ(3) = (3) + (3) + 3 = 33
3

2. The domain of the function is given by {x : x ∈ ℝ, x

≠ ±2}. Putting 2 and -2 in the denominator makes it 0,
Division:
thus making the function undefined.
(a) Get the reciprocal of the divisor.
(b) Multiply the above mentioned divisor with the
dividend.
OPERATIONS ON FUNCTIONS
2 2
2𝑥 +𝑥−6 𝑥 −2𝑥−8
Example: Divide 2 by 2 .
2𝑥 +7𝑥+5 2𝑥 −3𝑥−20
Addition and Subtraction:
(a) Find the least common denominator (LCD) of
Solution:
both fractions.
(a) Get the reciprocal of the divisor:
(b) Rewrite the fractions as equivalent fractions 2 2
÷
with the same LCD. 2𝑥 +𝑥−6 2𝑥 −3𝑥−20
2 2
(c) The LCD will be the denominator of the 2𝑥 +7𝑥+5 𝑥 −2𝑥−8
resulting answer. The sum/difference of the (b) Multiply:

( )( )
2 2
numerators will be the numerator of the 2𝑥 +𝑥−6 2𝑥 −3𝑥−20
=
resulting answer.
2 2
2𝑥 +7𝑥+5 𝑥 −2𝑥−8

1 2
(
(𝑥+2)(2𝑥−3)
= (2𝑥+5)(𝑥+1) )(
(𝑥−4)(2𝑥+5)
(𝑥+2)(𝑥−4) )
Example: Find the sum of 𝑥+3 and 𝑥−5 . 2𝑥−3
=
𝑥+1

Solution:
(a) The LCD of the two fractions is (x+3)(x-5) or
2
𝑥 − 8𝑥 + 15.
(b) Rewrite as equivalent fractions:
.
𝑥−5 2(𝑥−3)
2 + 2
𝑥 −8𝑥+15 𝑥 −8𝑥+15
.
3𝑥−11
(c) Resulting answer: 2
𝑥 −8𝑥+15
Composite Functions are when the output of one To solve a rational equation:
function is used as the input of another. The process (a) Eliminate denominators by multiplying each
of obtaining a composite function is called function term of the equation by the LCD.
composition. (b) Solve the resolving equation.

Let f and g be functions. The composite function Example: Solve for x:

2
−
3
=
1
𝑥 2𝑥 5
denoted by (f ∘ g) is defined by (f ∘ g)(x) = f(g(x)).
Solution:
It is generally a function that is written inside
(a) Eliminate denominators.
another function.
( 2
𝑥
−
3
2𝑥
=
1
5 )10𝑥 ⇒ 20 - 15 = 2x
The second function will always be the inside (b) Solve the resolving equation.
5
function. Composite functions are to be evaluated by 20 - 15 = 2x ⇒ 𝑥 = 2
inserting the value of g(x) in the x of f(x).

Example: Given the functions f(x) = x2 + 6 and g(x) = RATIONAL INEQUALITIES

2x – 1, find (f ∘ g)(x).

A rational inequality is an inequality involving rational

Solution: Substitute x with 2x–1 in the function
expressions.
f(x)=x2+6.

Examples:
f(x) = x2 + 6
1.) <
2 5
g(x) = 2x – 1 𝑥 𝑥−3
2
2.) ≠
5 𝑥 +4𝑥−8
2
(f ∘ g) (x) = (2x – 1) + 6 𝑥−3
2
𝑥+2

3.) >
𝑥 +4𝑥−8 2
(f ∘ g) (x) = (2x – 1) (2x – 1) + 6 𝑥+2 𝑥
(f ∘ g) (x) = 4x2 – 4x + 1 + 6
(f ∘ g) (x) = 4x2 – 4x + 7 To solve a rational inequality:
(a) Rewrite the inequality as a single rational
expression on the left side and 0 on the right
RATIONAL EXPRESSIONS side.
(b) Determine the critical points—the x-values
A rational expression is an expression that can be which can make the rational expression zero
written as a ratio of two polynomials. or undefined.
(c) Use the critical points to divide the number
Examples: line into intervals.
1.)
2
(d) Test a value in each interval by choosing any
𝑥
point in that interval and using it as a test
2.)
5
𝑥−3
2
point.
3.)
𝑥 +4𝑥−8
(e) Construct a table of signs to determine the
𝑥+2
sign of the function in each interval.
(f) Determine the intervals where the inequality
RATIONAL EQUATIONS is correct. Also check if the critical points
are parts of the solution.
A rational equation is An equation involving rational (g) Write the solution in interval notation.
expressions.
𝑥−1
Example: Solve the inequality: 𝑥+3
≥ 0
Examples: Solution:
1.) =
9 5
𝑥 𝑥−3
Rewrite the inequality as a single rational
2 expression on the left side and 0 on the right
2.) - =
𝑥 +10𝑥−8 5 2
𝑥+1 𝑥+3 𝑥+3 side. Our inequality is already in this form.
2
3.) = +
5 2 𝑥 +4𝑥−8
𝑥−9 𝑥−1 𝑥+4 𝑥−1
𝑥+3
≥ 0
(a)
(b) Determine the critical points. Here, the (g) Write the solution in interval notation.
rational expression will be zero for x = 1 and
undefined for x = –3. (−∞,−3)∪[1,∞) - FINAL ANSWER

(c) Use the critical points to divide the number

line into intervals. The number line is divided
into three intervals:

(−∞,−3) (−3,1) (1,+∞)

(d) Test a value in each interval by choosing any

point in that interval and using it as a test
point. We can use:
RATIONAL FUNCTIONS
x = -4 for (−∞,−3)
x = 0 for (−3,1) A rational function is a function of the form
x = 2 for (1,+∞) 𝑓(𝑥) =
𝑝(𝑥)
where p(x) and q(x) are polynomial
𝑞(𝑥)
functions and q(x) ≠ 0. The domain of f(x) must be
(e) Construct a table of signs to determine the
the set of all x-values where q(x) ≠ 0.
sign of the function in each interval.

A rational function expresses a relationship between

x-1 (numerator) x+3 (denominator)
two variables (such as x and y), and can be
x = -4 - -
represented by a table of values or a graph.
x=0 - +
x=2 + +
Example: Represent the speed of a runner as a
function of the time it takes to run 100 meters in
(f) Determine the intervals where the inequality the track. Construct a table of values for the speed
is correct. Write the solution in interval of a runner against different run times.
notation.
Solution: Since the speed of a runner depends on the
The first interval has 2 negatives, so, when time it takes to run 100 meters, we can represent
divided, becomes positive. The second speed as a function of time.
interval has one positive and one negative, so,
when divided, becomes negative. The third Let x represent the time it takes to run 100 meters.
interval has 2 positives. Then the speed of the runner in meters per second
can be represented as a function s(x) as follows:
We want the quotient to be greater than or
equal to zero (positive). So the numbers in 100
𝑠(𝑥) =
the intervals (−∞,−3) and (1,+∞) are 𝑥

solutions.
x 10 12 14 16 18 20
The first critical point x=1, when substituted s(x) 10 8.33 7.14 6.25 5.56 5
to the inequality, makes the whole rational
expression 0. So, 1 is part of the solution and From the table we can observe that the speed
we will mark it with a bracket. decreases with time. We can use a graph to
determine if the points on the function follow a
Meanwhile, the critical point x=−3 makes the smooth curve or a straight line.
whole rational expression undefined, so it
must be excluded from the solution and we
mark it with a parenthesis.
 GRAPHING RATIONAL FUNCTIONS ONE-TO-ONE FUNCTIONS

Domain A function is one-to-one if no two elements in the

➔ is the set of all values that the variable x can domain correspond to the same element in the range.
take.
Range Horizontal Line Test
➔ is the set of all values that f(x) will take. ➔ A function is one-to-one if each horizontal
Zeroes line does not intersect the graph at more
➔ are the values of x which make the function than one point.
zero.
Intercept
➔ point of intersection between the function
and a particular axis.

PROPERTIES
OF RATIONAL HOW TO GET
FUNCTIONS one-to-one not one-to-one
x-intercept Evaluate the function at y=0.
y-intercept Evaluate the function at x=0. INVERSE OF ONE-TO-ONE FUNCTIONS
vertical Determine which values can
asymptote make the denominator zero.
Inverse functions (f-1), in the most general sense,
This is to be denoted as a.
are functions that "reverse" each other.
If this value of a does not
* The importance of one-to-one functions is due to
make the numerator zero, then
the fact that these are the only functions that
it is the vertical asymptote.
have an inverse.
* If a function is many-to-one, the process to
Express it as an equation; x=a.
reverse it would require many outputs from one input,
horizontal Let n be the degree of the
thus contradicting the definition of a function.
asymptote numerator and m the degree of
the denominator.
To find the inverse of a one-to-one function:
(a) Replace all f(x) with y.
If n = m, the horizontal
𝑎 (b) Interchange the x and y variables.
asymptote is 𝑦 = 𝑏
, where a is (c) Solve for y in terms of x.
the leading coefficient of the
numerator and b is the leading Example:
coefficient of the denominator. 1. Find the inverse of f(x) = 2x + 7.

If n < m, the horizontal Solution:

asymptote is y = 0. 1. f(x) = 2x + 7
(a) Replace all f(x) with y.
If n > m, there is no horizontal f(x) = 2x + 7
asymptote. y = 2x + 7
(b) Interchange variables.
y = 2x + 7
To solve for rational functions: x = 2y + 7
(a) Factor the given function if possible. (c) Solve for y.
(b) Find the domain and range. x = 2y + 7
(c) Get the properties of the function. x - 7 = 2y
𝑥−7 2𝑦
2
= 2
𝑥−7
f-1 =
𝑥−7
y = 2
⇒ 2
 Graphing Transformations of Exponential Functions
EXPONENTIAL FUNCTIONS
● The graph of y = –f(x) is the reflection about
An exponential function is a function of the form the x-axis of the graph of y = f(x).
f(x) = bx where b>0, b≠1. This function models a
relationship in which a constant change in the
independent variable gives the same proportional
change.

One-to-One Property of Exponential Functions

𝑛 𝑚
𝑎 =𝑎 ⇔𝑛 = 𝑚

Examples:
1. Find x: 3x+1 = 35
2. Find x: 4x = 2
● The graph of y = f(–x) is the reflection about
Solution: the y-axis of the graph of y = f(x).
1. Since both sides of the equation have the
same base, we can use the One-to-One
Property to work on the exponents.
3x+1 = 35
x+1 = 5
x = 5-1
x=4

2. Since the sides of the equation do not have

the same base, we will arrange the equation ● The graph of y = f(x) + k is a vertical shift of
such that they will be of similar base. 4 can k units up (if k > 0) or k units down (if k < 0)
be reduced to 22. of the graph of y = f(x).
4x = 2
22(x) = 2
Now, we can use the One-to-One Property.
22(x) = 2
2x = 1
x=½

PROPERTIES OF EXPONENTIAL FUNCTIONS

➔ The domain is the set of all real numbers. ● The graph of y = f(x – k) is a horizontal shift
➔ The range is the set of all positive real of k units to the right (if k > 0) or k units to
numbers. the left (if k < 0) of the graph of y = f(x).
➔ It is a one-to-one function. It satisfies the
Horizontal Line Test.
➔ The y-intercept is 1. There is no x-intercept.
➔ The horizontal asymptote is the line y = 0 (or
the x-axis). There is no vertical asymptote.
➔ The function is increasing if b > 1, and is
decreasing if 0 < b < 1.
 Examples:
REPRESENTING REAL-LIFE SITUATIONS USING 1. The half-life of a substance is 400 years.
EXPONENTIAL FUNCTIONS How much will remain after 600 years if the
initial amount was 200 grams?
2. Robert invested P30,000 after graduation. If
Population growth formula: the average interest rate is 5.8%
𝑡
𝑇 compounded annually, how much will the
𝑦 = 𝑦0(2) money be in 15 years?
y0 = original population Solution:
y = new population 1. y0 = 200 g
t = time y = ??
T = constant population growth time t = 600 years
T = 400 years
600 𝑦𝑒𝑎𝑟𝑠
● The half-life of a radioactive substance is 1 400 𝑦𝑒𝑎𝑟𝑠
𝑦 = 200 𝑔( )
the time it takes for half of the substance to 2

decay. y = 70.71 grams

2. A = ??
Half-life formula: P = ₱ 30,000
𝑡 r = 5.8% or 0.058
1 𝑇 t = 15 years
𝑦= 𝑦0( 2 ) 15
𝐴 = ₱ 30, 000(1 + 0. 058)
y0 = original amount of substance
A = ₱ 69,888.59
y = amount of substance remaining
t = time
T = constant half-life time
LOGARITHMS
● A compounding interest is when the interest
earned is added to the principal money Logarithm is from the Greek words “logos” and
invested. This new amount (principal + “arithmos” which mean ratio and number,
interest) will again earn interest in the next respectively.
period, and will be added to the preceding
amount [(principal + interest) + new interest]. ● In both the logarithmic and exponential
This cycle continues, making the interest forms, b is the base. In the exponential form,
increase as time passes by. c is an exponent; this implies that the
logarithm is actually an exponent. Hence,
Compound Interest formula: logarithmic and exponential functions are
𝑡 inverses.
𝐴 = 𝑃(1 + 𝑟) ● In the logarithmic form logbx, x cannot be
A = new amount negative.
P = principal amount ● The value of logbx can be negative.
r = annual rate
t = time There are two types of logarithms:

1. Common logarithms
The natural exponential function is the function in ➢ from Henry Briggs. AKA Briggsian logarithm.
the form f(x)=ex where e is an irrational number ➢ are logarithms that use the symbol “log”.
whose value is approximately 2.71828. ➢ logx is a short notation for log10x.
➢ if base is not indicated, it is 10.

To solve real-life situations using exponential 2. Natural logarithms

functions: ➢ from John Napier. AKA Napierian logarithm.
➢ are logarithms that use the symbol “ln”.
(a) Identify the components in the problem. ➢ lnx is another way of writing logex.
(b) Substitute these components to the formula. ➢ its base is always e.
(c) Perform indicated operation.
 BASIC PROPERTIES OF LOGARITHMS ILLUSTRATING SIMPLE AND
COMPOUND INTEREST

1. 𝑙𝑜𝑔𝑏1 = 0
𝑥 Simple interest remains constant throughout the
2. 𝑙𝑜𝑔𝑏𝑏 = 𝑥 investment term. In compound interest, the interest
example: from the previous year also earns interest. Thus, the
log464 = log443 = 3 interest grows every year.
𝑙𝑜𝑔𝑏𝑥
3. 𝐼𝑓 𝑥 > 0, 𝑡ℎ𝑒𝑛 𝑏 = 𝑥 Definition of terms:
example:
𝑙𝑜𝑔52
5 = 2 ★ Interest (I)
○ amount paid or earned for the use of
money.
LAWS OF LOGARITHMS ★ Simple Interest (Is)
○ interest that is computed on the
principal and then added to it.
1. 𝑙𝑜𝑔𝑏(𝑢𝑣) = 𝑙𝑜𝑔𝑏𝑢 + 𝑙𝑜𝑔𝑏𝑣
★ Compound Interest (Ic)
example: ○ interest is computed on the principal
log2(3x) = log23 + log2x and also on the accumulated past
interests.
2. 𝑙𝑜𝑔𝑏(𝑢/𝑣) = 𝑙𝑜𝑔𝑏𝑢 − 𝑙𝑜𝑔𝑏𝑣 ★ Principal (P)
○ amount of money borrowed or
example:
invested on the origin date.
log3(4/5) = log34 – log35
★ Rate (r)
𝑛 ○ annual rate, usually in percent,
3. 𝑙𝑜𝑔𝑏𝑢 = 𝑛 * 𝑙𝑜𝑔𝑏𝑢 charged by the lender, or rate of
example: increase of the investment.
log536 = log562 = 2log56 ★ Time or term (t)
○ amount of time in years the money is
Change-of-base formula: borrowed or invested; length of time
Any logarithmic expression can be expressed as a between the origin and maturity
quotient of two logarithmic expressions with a dates.
common base. Let a, b, and x be positive real ★ Maturity value or future value (F)
numbers, with a ≠ 1, b ≠ 1: ○ amount after t years that the lender
receives from the borrower on the
maturity date.
★ Repayment date or maturity date
example:
○ date on which the money borrowed or
log64 (change to base 2)
𝑙𝑜𝑔24 loan is to be completely repaid.
𝑙𝑜𝑔64 = 𝑙𝑜𝑔26 ★ Origin or loan date
○ date on which money is received by
the borrower.
PROPERTIES OF LOGARITHMIC FUNCTIONS ★ Lender or creditor
○ person (or institution) who invests the
1. The domain is the set of all positive numbers, money or makes the funds available.
or {x ∈ ℝ | x > 0}. ★ Borrower or debtor
2. The range is the set of all positive real ○ person (or institution) who owes the
numbers. money or avails of the funds from the
3. It is a one-to-one function. It satisfies the lender.
Horizontal Line Test.
4. The x-intercept is 1. There is no y-intercept.
5. The vertical asymptote is the line x = 0 (or
the y-axis). There is no horizontal asymptote.
 SIMPLE INTEREST COMPOUNDING MORE THAN ONCE A YEAR
● formula:
𝐼𝑠 = 𝑃𝑟𝑡 Definition of Terms:

● When the time is expressed in months (M), it

𝑀
★ Frequency of conversion (m)
should be converted in years by: 𝑡= 12 ○ number of conversion periods in one
year.
Maturity (Future) Value ★ Conversion or interest period
● formula: ○ time between successive conversions
𝐹 = 𝑃(1 + 𝑟𝑡) of interest.
★ Total number of conversion periods (n)

Example: How much interest is charged when ○ 𝑛 = 𝑚𝑡

𝑙𝑜𝑔𝐹
₱50,000 is borrowed for 9 months at an annual ○ 𝑛= 𝑚𝑙𝑜𝑔(1+𝑗)
interest rate of 10%? What is the maturity value? ★ Nominal rate (i(m))
○ annual rate of interest.
Solution: (𝑚)
○ 𝑖 = 𝑚𝑗
P = ₱ 50,000
r = 10% = 0.10 ★ Rate (j) of interest for each conversion
9 period
t = 12 year = 0.75 year (𝑚)
𝑖
Is = Prt
○ 𝑗 = 𝑚
9
Is = (50,000)(0.10)( 12 )
Maturity Value, compounding m times a year:
Is = (50,000)(0.10)(0.75) ● formula:
Is = 3,750 𝑛
F = P(1+rt) 𝐹 = 𝑃( 1 + 𝑗 )
F = (50,000)[1 + (0.10)(0.75)]
F = 53,750 To solve:
(a) Compute the rate of interest for each
conversion period (j).
COMPOUND INTEREST (b) Compute for the total number of conversion
● formula: periods (n).
(c) Compute for the maturity value (F).
𝐼𝑐 = 𝐹 − 𝑃
Example: Find the maturity value and interest if
Maturity (Future) Value ₱10,000 is deposited in a bank at 2% compounded
● formula: monthly for 5 years.
𝑡
𝐹 = 𝑃( 1 + 𝑟 )
Solution:
Example: Find the maturity value and interest if P P = 10,000
50,000 is invested at 5% compounded annually for 8 t = 5 years
years. m= 12
i(4) = 0.02
(4)
Solution: 𝑗 =
𝑖
=
0.02
= 0. 005
𝑚 4
P = 50,000
n = mt
r = 5% = 0.05
n = (4)(5) = 20 conversion periods
t = 8 years
F= P(1 + j)n
F = P(1 + r)t
F = (10,000)(1 + 0.005)20
F = (50,000)(1 + 0.05)8
F= 11,048.96
F = 73,872.77
Ic = F – P
Ic = F – P
Ic = 11,048.96 – 10,000
Ic = 73,872.77 – 50,000
Ic = P1,048.96
Ic = 23,872.77
 The cash value or cash price of a purchase is equal
ANNUITIES
to the down payment (if there is any) plus the
present value of the installment payments.
An Annuity is a sequence of payments made at equal
(fixed) intervals or periods of time. Annuities may be
classified in different ways, as follows. GENERAL ANNUITY

According to payment interval and interest period: A General Ordinary Annuity is a general annuity in
a. Simple Annuity - an annuity where the which the periodic payment is made at the end of the
payment interval is the same as the interest payment interval.
period.
b. General Annuity - an annuity where the Examples of general annuity:
payment interval is not the same as the 1. Monthly installment payment of a car, lot, or
interest period. house with an interest rate that is
compounded annually.
According to time of payment: 2. Paying a debt semi-annually when the interest
a. Ordinary Annuity (or Annuity Immediate) – is compounded monthly.
a type of annuity in which the payments are
made at the end of each payment interval. ● When solving for an equivalent rate, it is
b. Annuity Due – a type of annuity in which the suggested that you use at least six decimal
payments are made at the beginning of each places, or the exact value.
payment interval.
A cash flow is a term that refers to payments
According to duration: received (cash inflows) or payments or deposits made
a. Annuity Certain – an annuity in which (cash outflows). Cash inflows can be represented by
payments begin and end at definite times. positive numbers and cash outflows can be
b. Contingent Annuity – an annuity in which the represented by negative numbers.
payments extend over an indefinite (or
indeterminate) length of time. The fair market value or economic value of a cash
flow (payment stream) on a particular date refers to
a single amount that is equivalent to the value of the
SIMPLE ANNUITY
payment stream at that date. This particular date is
called the focal date.
★ Term of an annuity (t)
○ time between the first payment
interval and last payment interval. DEFERRED ANNUITY
★ Regular or Periodic payment (R)
○ the amount of each payment. Deferred Annuity – an annuity that does not begin
★ Amount (Future Value) of an annuity (F) until a given time interval has passed.
○ sum of future values of all the
payments to be made during the Period of Deferral – time between the purchase of
entire term of the annuity. an annuity and the start of the payments for the
𝑛
(1+𝑗) −1 deferred annuity.
○ 𝐹= 𝑅 , where j is the
𝑗
interest rate per period and n is the Present Value of a Deferred Annuity:
number of payments. 1−(1+𝑗)
−(𝑘+𝑛) −𝑘
1−(1+𝑗)
★ Present value of an annuity (P) 𝑃 = 𝐹 𝑗
− 𝑅 𝑗
○ sum of present values of all the where:
payments to be made during the R is the regular payment
entire term of the annuity. j is the interest rate per period
−𝑛
1−(1+𝑗) n is the number of payments
○ 𝑃 = 𝑅 𝑗 k is the number of conversion periods in the
deferral
 BONDS
STOCKS AND BONDS
➔ are interest bearing security which promises
to pay an amount of money on a certain
STOCKS maturity date.
➔ are shares in the ownership of the company. ➔ Unlike the stockholders, bondholders are
Owners of stocks may be considered as part lenders to the institution which may be a
owners of the company. government or private company. Bondholders
➔ There are two types of stocks: common stock do not vote in the institution’s annual meeting
and preferred stock. Both will receive but are the first to claim in the institution’s
dividends or share of earnings of the earnings.
company. Dividends are paid first to ➔ On the maturity date, the bondholders will
preferred shareholders. receive the face amount of the bond. Aside
➔ Stocks can be bought or sold at its current from the face amount due on the maturity
price called the market value. When a person date, the bondholders may receive coupons ,
buys some shares, the person receives a usually done semi-annually, depending on the
certificate with the corporation’s name, coupon rate stated in the bond certificate.
owner’s name, number of shares and par value
per share. Definition of Terms:

Definition of Terms: ★ Bond

○ interest-bearing security which
★ Stocks promises to pay (1) a stated amount
○ share in the ownership of a company. of money on the maturity date, and
★ Dividend (2) regular interest payments called
○ share in the company’s profit. coupons.
○ Dividend = (Dividend Percentage)(Par ★ Coupon
Value)(No. of Shares) ○ periodic interest payment that the
★ Dividend Per Share bondholder receives during the time
○ ratio of the dividends to the number between purchase date and maturity
of shares. date; usually received semiannually
○ 𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑 𝑃𝑒𝑟 𝑆ℎ𝑎𝑟𝑒 =
𝑇𝑜𝑡𝑎𝑙 𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑
★ Coupon Rate
𝑇𝑜𝑡𝑎𝑙 𝑆ℎ𝑎𝑟𝑒𝑠
○ the rate per coupon payment period;
★ Stock Market
denoted by r.
○ a place where stocks can be bought or
★ Price of a Bond
sold. The stock market in the
○ the price of the bond at purchase
Philippines is governed by the
time; denoted by P.
Philippine Stock Exchange (PSE).
★ Par Value or Face Value
★ Market Value
○ the amount payable on the maturity
○ the current price of a stock at which
date; denoted by F.
it can be sold.
★ Stock Yield Ratio
○ ratio of the annual dividend per share
and the market value per share. Also
called current stock yield.
𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑 𝑝𝑒𝑟 𝑆ℎ𝑎𝑟𝑒
○ 𝑆𝑡𝑜𝑐𝑘 𝑌𝑖𝑒𝑙𝑑 𝑅𝑎𝑡𝑖𝑜 = 𝑀𝑎𝑟𝑘𝑒𝑡 𝑉𝑎𝑙𝑢𝑒
★ Par Value ★ Term of a Bond
○ the per share amount as stated on ○ fixed period of time (in years) at
the company certificate. Unlike which the bond is redeemable as
market value, it is determined by the stated in the bond certificate;
company and remains stable over number of years from time of
time. purchase to maturity date.
★ Fair Price of a Bond
○ present value of all cash inflows to
the bondholder.
 A proposition is simple if it cannot be broken down
BUSINESS AND CONSUMER LOANS
any further into other component propositions.

Definition of Terms: Given a proposition, its truth table shows all its
possible truth values. A truth table involving n
★ Business Loan numbers of propositions has 2n rows.
○ money lent specifically for a business
purpose. It may be used to start a Examples:
business or to have a business 1. If a proposition has two possible truth values,
expansion. a proposition p would have the following truth
★ Consumer Loan table:
○ money lent to an individual for p
personal or family purposes. T
★ Collateral F
○ assets used to secure the loan. It may 2. The truth table for propositions p and q is as
be real-estate or other investments. follows:
★ Term of the Loan p q
○ time to pay the entire loan. T T
★ Amortization Method T F
○ method of paying a loan (principal and
F T
interest) on installment basis, usually
F F
of equal amounts at regular intervals.
★ Mortgage
○ a loan, secured by a collateral, that LOGICAL OPERATORS
the borrower is obliged to pay at
specified terms.
The negation of a proposition is denoted by ~p, read
★ Chattel Mortgage
as “not p”.
○ a mortgage on a movable property.
★ Outstanding Balance
Examples: State the negation of the following
○ any remaining debt at a specified
propositions.
time.
1. n1: 2 is an odd number.
2. n2: The tinikling is the most difficult dance.
One method to compute the outstanding balance is to
3. n3: Everyone in Visayas speaks Cebuano.
get the present value of all remaining payments. This
method is called the prospective method.
Answers:
1. ~n1: It is not true that 2 is an odd number, or
2 is an even number.
LOGIC 2. ~n2: The tinikling is not the most difficult
dance.
3. ~n3: Not everyone in Visayas speaks Cebuano.
PROPOSITIONS
The conjunction of the propositions p and q is
denoted by p ∧ q, read as “p and q”. The propositions
A proposition is a declarative sentence that is either
p and q are called conjuncts. The conjunction p ∧ q is
true or false, but not both. Propositions are usually
true only when both conjuncts and are true.
denoted by small letters. If a proposition is true,
then its truth value is true, which is denoted by T;
p q p∧q
otherwise, its truth value is false, which is denoted
T T T
by F.
T F F
A compound proposition is a proposition formed from F T F
a simpler proposition using logical connectors or some F F F
combination of logical connectors.
The disjunction of the propositions p and q is
denoted by p ∨ q, read as “p or q”. The propositions p
and q are called disjuncts. The disjunction p ∨ q is
false only when both conjuncts and are false.

p q p∨q
T T T
T F T
F T T
F F F

The conditional of the propositions p and q is

denoted by 𝑝 → 𝑞, read as “If p, then q” or “p implies
q”. The proposition p is called the hypothesis, while
the proposition q is called the conclusion. The
conditional 𝑝 → 𝑞 is false only when the hypothesis is
true while the conclusion is false.

p q 𝑝→𝑞
T T T
T F F
F T T
F F T

The biconditional of the propositions p and q is

denoted by 𝑝 ↔ 𝑞, read as “p if and only if q”. The
propositions p and q are the components of the
biconditional. The biconditional 𝑝 ↔ 𝑞 is false if the
truth values of the components are not similar.

p q 𝑝↔𝑞
T T T
T F F
F T F
F F T

A proposition that is always true is called a

tautology, while a preposition that is always false is
called a contradiction. We denote tautologies by τ
and contradictions by ϕ.

Two propositions p and q are logically equivalent,

denoted by 𝑝 ⇔ 𝑞, if they have the same truth values
for all possible truth values of their simple
components.

Suppose p and q are propositions. From the

conditional proposition 𝑝 → 𝑞, we derive three other
conditional statements, namely:
a. Converse: 𝑞 → 𝑝
b. Contrapositive: (~𝑞) → (~𝑝)
c. Inverse: (~𝑝) → (~𝑞)