General Mathematics – Grade 11

Alternative Delivery Mode

Module 9: Basic Concepts of Business and Consumer Loans
First Edition, 2019

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Published by the Department of Education – Region X – Northern Mindanao

Regional Director: Dr. Arturo B. Bayocot, CESO III
Development Team of the Module:

Authors: Ludita
Development Team S. Aljas
of the Module
Reviewers: Cherry Mae P. Casinillo
Author: Ruby Ludita S. Aljas L. Quilala
Syville Niňo U. Dumanon
Illustrator: Jay Michael A. Calipusan
Reviewers: Cherry Mae P. Casinillo Ruby L. Quilala
Management Syville
Team: Niňo U. Dumanon

Chairperson:
Management Team Dr. Arturo B. Bayocot, CESO III
Regional
Chairperson: Director
Dr. Arturo B. Bayocot, CESO III
Co-Chairpersons: Dr.
Regional Director Victor G. De Gracia Jr., CESO V
Asst. Regional Director
Mala
Co-Chairperson: EpraJr.
Dr. Victor G. De Gracia B.CESO
Magnaong
V
CES, CLMD
Asst. Regional Director
Members:
Members Dr. Bienvenido U. Tagolimot, Jr.
Regional
Mala Epra B. Magnaong, ADM Coordinator
Chief ES, CLMD
Marino O. Dal
Bienvenido U. Tagolimot, Jr., EPS-ADM
EPS, Math
Neil A. Improgo, EPS-LRMS
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ii
 11
General
Mathematics
Module 9
Basic Concepts of Business
and Consumer Loans

This instructional material was collaboratively developed and reviewed

by educators from public and private schools, colleges, and/or universities. We
encourage teachers and other education stakeholders to email their feedback,
comments, and recommendations to the Department of Education at
action@deped.gov.ph.

We value your feedback and recommendations.

Department of Education • Republic of the Philippines

iii
 Table of Contents

What I Need To Know ……………………………………………… 1

Module Content ……………………………………………… 1
Module Objectives ……………………………………………… 1
General Instructions ……………………………………………… 2
What I Know ……………………………………………… 3
Lessons/Concept
Lesson 1 ………………………………………………… 4
Activity 1 ………………………………………………… 5
Lesson 2 ………………………………………………… 6
Activity 1 ………………………………………………… 12
Activity 2 ………………………………………………… 13
What I Have Learned ………………………………………………... 14
Assessment ………………………………………………… 14
Glossary of Terms ………………………………………………… 17
References ………………………………………………… 18

v
 What I Need To Know

Do you already have plans for your college education? Some families choose
to borrow money from the banks or other lending institutions for college education. Do
you or your family plan to engage in business? Do you know how to borrow money
from banks or other lending institutions?

This module will help you understand about the basic concepts of business and
consumer loans. This will allow you to understand about how to compute for the
interest and balance, and other things associated with loans.

Module Content

This module has the following lessons:

 LESSON 1: Business and Consumer Loans
 LESSON 2: Solving Problems on Business and Consumer Loans

Module Objectives

At the end of the lesson, you are expected to able to:

1. Illustrates business and consumer loans (M11GM-IIf-1)
2. Distinguishes between business and consumer loans. (M11GM-IIf-2)
3. Solves problems involving business and consumer loans (amortization,
mortgage). (M11GM-IIf-3)

1
 General Instructions

Note: You will need a scientific calculator in going through this module.

Below are guidelines for you in going about the module:

1. Read and follow instructions very carefully.
2. Answer the pre-test to determine how much you already know about the
lessons in this module.
3. Check your answers against the given answer key at the end of this module.
Do not look at the correct answer until after you have written or marked your
own answers.
4. Read each lesson and do the activities that are provided for you. The given
activities are important because they are programmed to help you learn more
efficiently.
5. Perform all the activities diligently to help you understand the topic.
6. Take the self-test after each lesson to determine how much you understand the
topic.
7. Answer the posttest to measure how much you have gained from the lessons.
If your answer is wrong, reread the lesson until you understand your error. Then
go on.

Good luck and have fun!

2
 What I Know

Directions: Choose the letter that corresponds to the correct answer. Write the letter
of your choice on the separate sheet.

1. A.money lent to an individual for personal or family purpose is called________.

A. Business Loan B. Consumer Loan C. Collateral D. Loan
2. The assets used to secure the loan is called__________.
A. Asset B. loan C. collateral D. payment
3. A loan, secured by a collateral, that the borrower is obliged to pay at specified
terms.
A. Mortgage B.chattel mortgage C.collateral D. amortization
4. A mortgage on a movable property.
A. Mortgage` B.chattel mortgage C.collateral D. amortization
5. Any remaining debt at a specified time.
A. Amortization C. balance
B. mortgage D. outstanding balance
6. A method of paying a loan (principal and interest) on installment basis,
usually of equal amounts at regular intervals.
A. Amortization C. balance
B. mortgage D. outstanding balance

For numbers 7 – 10:

Mr. and Mrs. Banal purchased a house and lot worth P4, 000,000. They paid a down
payment of P800, 000. They plan to amortize the loan of P3, 200,000 by paying
monthly for 20 years. The interest rate is 12% convertible monthly.
A. ₱ 5,319.98 C. ₱ 35,234.76
B. ₱ 29,914.78 D. ₱ 5,256,342.40
7. How much is the monthly payment?

8. What is the total interest paid?

9. What is the principal and interest components of the 51st payment?

10. What is the interest components of the 51st payment?

Key to answer on page 16

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 Lesson BUSINESS AND CONSUMER
1 LOANS

Definition of Terms:

 Business Loan – money lent specifically for a business purpose. It may be

used to start a business or to have a business expansion.
 Consumer Loan – money lent to an individual for personal or family purpose.
 Collateral – assets used to secure the loan. It may be real-estate or other
investments.
 Term of the Loan – time to pay the entire loan.

What is It

In Examples 1-5, identify whether the following is a consumer or business loan.

Example 1. Mr. Agustin plans to have a barbershop. He wants to borrow some

money from the bank in order for him to buy the equipment and furniture
for the barbershop.
Solution. Business loan

Example 2. Mr and Mrs Craig wants to borrow money from the bank to finance the
college education of their son.
Solution. Consumer loan

Example 3. Mr. Alonzo wants to have some improvements on their 10-year old
house.Hewants to build a new room for their 13-year old daughter. He will
borrow some money from the bank to finance this plan.
Solution. Consumer loan

Example 4. Mr. Samson owns a siomai food cart business. He wants to put another
food cart on a new mall in the other city. He decided to have a loan to establish
the new business.
Solution. Business loan

Example 5. Roan has a computer shop. She owns 6 computers. She decided to
borrow some money from the bank to buy 10 more computers.
Solution. Business loan

4
 What’s New

Activity 1: Business or consumer loan?

Identify the following whether the following illustrates a business loan or a consumer
loan.

1. Mr. Lim wants to have another branch for his cellphone repair shop. He decided
to apply for a loan that he can use to pay for the rentals of the new branch.

2. Mr. Trillas runs a trucking business. He wants to buy three more trucks for
expansion of his business. He applied for a loan in a bank.

3. Mrs. Alonzo decided to take her family for a vacation. To cover the expenses,
she decided to apply for a loan.

4. Glenn decided to purchase a condominium unit near his workplace. He got a

loan worth ₱ 2,000,000.

5. Mr. Galang renovated his house for ₱ 80,000. This was made possible because
of an approved loan worth ₱75,000.

Key to answer on page 16

5
 Lesson Solving Problems on Business and
2 Consumer Loans

Definition of Terms:
 Amortization Method – method of paying a loan (principal and interest) on
installment basis, usually of equal amounts at regular intervals.
 Mortgage – a loan, secured by a collateral, that the borrower is obliged to pay
at specified terms.
 Chattel Mortgage – a mortgage on a movable property
 Collateral – assets used to secure the loan. It may be a real-estate or other
investments.
 Outstanding Balance – any remaining debt at a specified time

What is It

Example 1.
Mr. Garcia borrowed P1,000,000 for the expansion of his business. The
effective rate of interest is 7%. The loan is to be repaid in full after one year. How much
is to be paid after one year?
Solution.
Given: P = 1,000,000 j = 0.07 n=1

Find F.
F = P(1 + 𝑗𝑗)𝑛𝑛 = 1,000,000( 1+ 0.07) = 1,070,000

An amount of P1,070,000 must be paid after one year.

Example 2. (Chattel mortgage). A person borrowed P1,200,000 for the purchase of

a car. If his monthly payment is P31,000 on a 5-year mortgage, find the total amount
of interest.
Solution.
Given: P = 1,200,000 Monthly payment = 31,000
The total amount paid is given by
Total Amount = (31,000)(12 months)(5 years)
= 1,860,000
Thus, the total interest is the difference between the total amount paid and the
amount of the mortgage;

Total Interest = 1,860,000 – 1,200,000

= 660,000

6
Example 3.
If a house is sold for P3,000,000 and the bank requires 20% down payment, find
the amount of the mortgage.
Solution.
Down payment = down payment rate x cash price
= 0.20(3,000,000)
= 600,000
Amount of the Loan = cash price - down payment
= 3,000,000 – 600,000
= 2,400,000
The mortgage amount is P2,400,000.
𝑖𝑖 12 0.12
Given: P =3,200,000 𝑖𝑖 12 = 0.12 j= = = 0.01
12 12
n = mt = (12)(20) = 240
R = 35,234.76

Find: principal and interest components of the 51st payment

The 51st payment of ₱ 35,234.76 is partly used to pay for the principal, and partly to
pay for the interest.

Step 1: Get the outstanding balance after the 50th payment (the balance after the 50th
payment is what the 51st payment will be for).
Since 50 payments have been paid already, there will be 190 remaining
payments.
The outstanding balance after the 50th payment is:

𝟏𝟏− (𝟏𝟏+𝐣𝐣)−𝟏𝟏𝟏𝟏𝟏𝟏 𝟏𝟏− (𝟏𝟏+𝟎𝟎.𝟎𝟎𝟎𝟎)−𝟏𝟏𝟏𝟏𝟏𝟏

𝐵𝐵50 = R = 35,234.76 = 2,991,477.63
𝐣𝐣 𝟎𝟎.𝟎𝟎𝟎𝟎
Step 2: After the 50th payment, the outstanding balance is ₱ 2,991,477.63.
Since the interest rate per period is j = 0.01, then the remaining balance of
₱ 2,991,477.63 will be charged an interest of (0.01)(2,991,477.63) =
29,914.78.
The 51st payment of ₱ 35,234.76 will be used to pay for this interest. Thus, the
interest component of the 51st payment is ₱ 29,914.78.

The remaining portion of the 51st payment is the principal component, denoted by
𝑃𝑃𝑃𝑃51 , is
𝑃𝑃𝑃𝑃51 = R – 𝐼𝐼50 = 35,234.76 – 29,914.78 = 5,319.98

Thus, for the 51st payment, the part that goes to pay the interest is ₱ 29,914.78 and
the part that goes to pay the principal is ₱ 5,319.98.

7
 Note: In this case, the house itself is used as the mortgaged property. Also please
take note that the other way to solve this is to directly compute the mortgaged
amount by multiplying the cash value of the property by the percentage of the
financed amount, which in this case,

100% − 20% = 80%. Thus, the amount of the loan is given by

(0.80)(₱ 3,000,000)= ₱ 2,400,000.

One method to compute the outstanding balance is to get the present value of all
remaining payments. This method is called the prospective method. We use the
symbol B to denote the outstanding balance after k payments. In other k books, OB is
used (the “p” stands for “prospective”).

Example 4.
Mrs. Se borrowed some money from a bank that offers an interest rate of 12%
compounded monthly. His monthly amortization for 5 years is ₱ 11,122.22. How much
is the outstanding balance after the 12 payment?
𝑖𝑖 0.12
Given: R = 11,122.22 𝑖𝑖 12 = 0.12 j = = = 0.01
𝑚𝑚 12
K = 12 number of payments paid
n – k = 48 since only 48 payments remain
Find: present value of 48 future payments (since there are 48 payments left)
𝟏𝟏− (𝟏𝟏+𝐣𝐣)−𝟏𝟏𝟏𝟏𝟏𝟏 𝟏𝟏− (𝟏𝟏+𝟎𝟎.𝟎𝟎𝟎𝟎)−𝟒𝟒𝟒𝟒
𝐵𝐵2 = R = 11,122.22 = 422.354.73
𝐣𝐣 𝟎𝟎.𝟎𝟎𝟎𝟎
The outstanding balance is ₱ 422.354.73

Additional Examples A.
1. A loan of ₱ 300,000 is to be repaid in full after 2years. If the interest rate is 9%
per annum. How much should be paid after 2 years?
Solution.
Given: P = 300,000 j = 0.09 n=2
Find F.
F = P(1 + 𝑗𝑗)𝑛𝑛 = 300,000(1 + 0.09)2 = 356,430
The amount to be paid is ₱ 356,430.
2. If a car loan of ₱ 790,000 requires a 20% down payment. How much is the
mortgage?
Solution.
Down payment = down payment rate x cash price
= 0.20(790,000)
= 158,000
Amount of the Loan = cash price – down payment
= 790,000 – 158,000
= 632,000
The mortgage is ₱ 632,000.

8
 3. A person borrowed ₱ 1,000,000 for the purchase of a car. If his monthly
payment is ₱ 25,000 on an 8-year mortgage, find the total amount of interest.

Solution.
The total amount paid is given by
Total Amount = (25,000)(12 months)(8 years)
= 2,400,000
Thus, the total interest is the difference between the total amount paid and the
amount of the mortgage;

Total Interest = 2,400,000 – 1,000,000

= 1,400,000
The total interest is ₱ 1,400,000.

4. A consumer loan worth ₱ 80,000 is to be repaid in 12 months at 8% convertible

monthly. How much is the monthly payment?

Solution.
𝑖𝑖 (12) 0.08
Given: A = 80,000 𝑖𝑖 (12) = 0.08 j= = n = 12
12 12
Find: the regular payment R
𝑷𝑷 𝟖𝟖𝟖𝟖,𝟎𝟎𝟎𝟎𝟎𝟎 𝟖𝟖𝟖𝟖,𝟎𝟎𝟎𝟎𝟎𝟎
R= 𝟏𝟏− (𝟏𝟏+𝐣𝐣)−𝐧𝐧 = 0.08 −𝟏𝟏𝟏𝟏 = 𝟏𝟏𝟏𝟏.𝟒𝟒𝟒𝟒𝟒𝟒𝟒𝟒𝟒𝟒𝟒𝟒𝟒𝟒 = 6,959.07
𝟏𝟏− (𝟏𝟏+ )
𝐣𝐣 12
0.08
12
The monthly payment is ₱ 6,959.07.

5. A business loan worth ₱ 250,000 is to repay in quarterly installment for 1 year.

How much is the quarterly payment if money is worth 8% converted quarterly?

Solution.
𝑖𝑖 (4) 0.08
Given : P = 250,000 𝑖𝑖 (4) = 0.08 j= = = 0.02 n = 4
4 4
Find: the regular payment R
𝑷𝑷 𝟐𝟐𝟐𝟐𝟐𝟐,𝟎𝟎𝟎𝟎𝟎𝟎 𝟐𝟐𝟐𝟐𝟐𝟐𝟐𝟐,𝟎𝟎𝟎𝟎𝟎𝟎
R= 𝟏𝟏− (𝟏𝟏+𝐣𝐣)−𝐧𝐧 = 𝟏𝟏− (𝟏𝟏+0.02 )−𝟒𝟒
= 𝟑𝟑.𝟖𝟖𝟖𝟖𝟖𝟖𝟖𝟖𝟖𝟖𝟖𝟖𝟖𝟖𝟖𝟖 = 65,655.94
𝐣𝐣 0.02
The quarterly payment is ₱ 65,655.94.

9
 6. Mr. Baldonado is considering to pay his outstanding balance after 6 years of
payment. The original amount of the loan is ₱ 500,000 payable annually in
10 years. If the interest rate is 10% per annum and the regular payment
is ₱ 81,372.70 annually, how much is the outstanding balance after the 6
payment?

Solution.
Given: P =500,000 R = 81,372.70 j = 0.10 n = 10 k=6
Find: Outstanding balance after 6 payments (or present value of the remaining
4 payments).

𝟏𝟏− (𝟏𝟏+𝐣𝐣)−𝟒𝟒 𝟏𝟏− (𝟏𝟏.𝟏𝟏𝟏𝟏)−𝟒𝟒

𝐵𝐵6 = R = 81,372.70 = 257,940.51
𝐣𝐣 𝟎𝟎.𝟏𝟏𝟏𝟏

The outstanding balance after the 6 payment is ₱ 257,940.51.

7. Mrs. Tan got a business loan worth ₱ 800,000. She promised to pay the loan
semi-annually in 5 years. The semi-annual payment is ₱ 103,603.66 if money
is worth 10% converted semi-annually. How much is the outstanding balance
after the third payment?

Solution.
𝑖𝑖 (4) 0.10
Given: A =800,000 R = 103,603.66 𝑖𝑖 (2) = 0.10 j= 2
= 2
= 0.05
n= 10 k=3

Find: Outstanding balance after 3 payments (or present value of the remaining
7 payments).

𝟏𝟏− (𝟏𝟏+𝐣𝐣)−𝟕𝟕 𝟏𝟏− (𝟏𝟏.𝟎𝟎𝟎𝟎)−𝟕𝟕

𝐵𝐵3 = R = 103,603.66 = 599,489.62
𝐣𝐣 𝟎𝟎.𝟎𝟎𝟎𝟎
The outstanding balance is ₱ 599,489.62.

8. Alana and her family acquired a loan amounting to ₱ 2,000,000. Her monthly
amortization is ₱ 21,064.48 for 25 years. The interest rate is 12% convertible
monthly. Find the amount of interest and the amount of principal paid on the
121st payment.
Solution.
𝑖𝑖 (12) 0.12
Given: P =2,000,000 R = 21,064.48 𝑖𝑖 (12) = 0.12 j = = = 0,01 n = 12
12 12
n = 300 (monthly for 25 years) k=120 (120 payments have been made
already)

10
 Find: interest and principal components of the 121st payment.

We first need to find the outstanding balance after 120 payments. After the 120th
payment, there will be 180 remaining payments.
𝟏𝟏− (𝟏𝟏+𝐣𝐣)−𝟏𝟏𝟏𝟏𝟏𝟏 𝟏𝟏− (𝟏𝟏.𝟎𝟎𝟎𝟎)−𝟏𝟏𝟏𝟏𝟏𝟏
𝐵𝐵120 = R = 21,064.48 = 1,755,127.53
𝐣𝐣 𝟎𝟎.𝟎𝟎𝟎𝟎
𝐼𝐼121 = 𝑗𝑗(𝑃𝑃50 ) = (0.01)(1,755,127.53) = 17,551.28
𝑃𝑃𝑃𝑃121 = R – 𝐼𝐼121 = 21,064.48 – 17,551.28 = 3,513.20

Thus, for the 121st payment, the part that goes to pay the interest is ₱ 17,551.28 and
the part that goes to pay the principal is ₱ 3,513.20.

Additional Examples B.

Complete the following table, and be guided by the questions below.

Period Regular Interest Principal Outstanding
Payment R Component of Component of Balance
Payment Payment
0 A
1 B 500 2,320.11 7,679.56
2 2,820.11 F G 5,243.54
3 2,820.11 262.18 2,557.93 H
4 2,820.11 134.29 2,685.82 I
TOTALS C D E

A. How much is the amount of the loan? (outstanding balance at period 0)

B. How much is the first annual payment?
C. How much is the total amount of payment?
D. How much is the total interest paid?
E. How much is the total payments for the principal?
F. For the second payment, how much goes to pay the interest?
G. For the second payment, how much goes to pay the principal?
H. How much is the outstanding balance after the 3 payment?
I. How much should be the entry in the outstanding balance after the last
payment.

Solution.
A. The amount of the loan is ₱ 10,000, and this is the outstanding balance at time 0.
B. All payments are the same, so the answer is ₱ 2,820.11.
C. The total amount paid is (4)(P2820.11)= ₱ 11,280.44.
D. The total interest paid is = Total paid – Total payment
= 11,280.44 –10,000= ₱ 1,280.44
E. The total payments for the principal must be equal to the loan amount ₱ 10,000.

11
F. The outstanding balance after one payment is given in the table (₱ 7,679.56). This
amount will be charged 5% interest:
𝐼𝐼2 = 𝑗𝑗(𝑃𝑃1) = (0.05)( 7,679.56) = ₱ 383.98
G. The amount of the second payment that goes to pay the principal is
𝑃𝑃𝑃𝑃2 = R – 𝐼𝐼2 = 2,820.11 – 383.98 = ₱ 2,436.13
H. Since, after the third payment, there is only 1 remaining payment. The outstanding
balance after the third payment is given by
𝟏𝟏− (𝟏𝟏+𝐣𝐣)−(𝐧𝐧− 𝐤𝐤) 𝟏𝟏− (𝟏𝟏.𝟎𝟎𝟎𝟎)−𝟏𝟏
𝐵𝐵3 = R = 2,820.11 = ₱ 2,685.82
𝐣𝐣 𝟎𝟎.𝟎𝟎𝟎𝟎
I. Since all payments are made already, the outstanding balance should be 0.

What’s New

Activity 1: Solving Problems on Business and Consumer Loans

Solve the following problems completely:

1. A business loan of ₱ 1,000,000 is to be repaid in full after 3 years. If the interest
rate is 7% per annum. How much should be paid after 3 years?
2. Ms. Newman had a ₱ 55,000 business loan that is to be paid in 8 months. If
interest rate is 12% compounded monthly, how much should be paid after
8 months?
3. For the purchase of an SUV worth ₱ 1,200,000, the bank requires a
minimum amount of 20% down payment, find the mortgaged amount.
4. Suppose that a condominium unit is purchased for ₱ 2,800,000 and the
bank requires 30% down payment, how much is the mortgaged amount?
5. A family obtained a ₱ 4,500,000 mortgage. If the monthly payment is P50,000 for
12 years, how much is the total interest paid?
6. Ms. Santos obtained a condominium unit loan worth ₱ 2,700,000. If the monthly
payment is ₱ 29,100 for 15 years, how much is the total interest?
7. A consumer loan worth ₱ 75,000 is to be repaid in 18 months at 12% convertible
monthly. How much is the monthly payment?
8. A loan of ₱ 50,000 is to be amortized by paying quarterly in 1 year. If money is
worth 10% compounded quarterly, how much is the monthly installment?
9. Mr and Mrs Ramos had a housing loan payable monthly for 25 years. After
paying for 12 years, how many payments are left?
10. Ms. Castillo got a business loan worth ₱ 850,000. She promised to pay the loan
quarterly in 4 years. The quarterly payment is ₱ 65,109.14 if money is worth 10%
converted quarterly. How much is the outstanding balance after the second year?

12
Activity 2: Problem Solving

Solve the following problems completely:

1. Gabby is paying ₱ 1,000 monthly for the payment of his loan for 2 years now.
At the moment, he still has 6 remaining payments. How much is the outstanding
now if 𝑖𝑖 12 = 0.06?
2. A consumer loan has a scheduled payment of ₱ 2,000 every quarter for 3 years.
If money is worth 9% compounded quarterly, how much of the 5 payment goes
to pay the interest?
3. Mr. Bainto has a loan that is to be amortized by paying monthly payments
of ₱ 3,200 for 1 year. After paying for 6 months, he decided to pay off the loan.
How much of the 6 payment goes to pay the principal if money is worth
12% compounded monthly?
4. Study the amortization schedule and fill in the blanks. A loan amounting to
P100,000 is to be paid annually for 4 years with an interest rate of 10% per
annum. The annual amortization is ₱ 31,547.08of Payment.

Period Regular Interest Principal Outstanding

Payment Component of Component of Balance
Payment Payment
0 A
1 B 10,000 21,547.08 78,452.92
2 31,547.08 C D 54,751.13
3 31,547.08 5,475.11 26,071.97 28,679.16
4 31,547.08 2,887.92 28,679.16 E
Totals

A. How much is the amount of the loan?

B. How much is the payment on the first period?
C. For the second payment, how much goes to pay the interest?
D. For the second payment, how much goes to pay the principal?
E. How much is the outstanding balance after the 4 payment?

Key to answer on page 16

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 What I Have Learned

Key Points:
 Amortization Method is method of paying a loan (principal and interest) on
installment basis, usually of equal amounts at regular intervals.
 Mortgage is a loan, secured by a collateral that the borrower is obliged to pay
at specified terms.
 Chattel Mortgage is a mortgage on a movable property
 Collateral is an asset used to secure the loan. It may be a real-estate or other
investments
 Outstanding Balance is any remaining debt at a specified time.

Assessment

1. A money lent to an individual for a business purpose is called________.

A. Business Loan C. Collateral
B. Consumer Loan D. Loan
2. The assets used to secure the loan is called__________.
A. asset C. collateral
B. loan D. payment
3. A loan, secured by a collateral, that the borrower is obliged to pay at specified
terms.
A. mortgage C. collateral
B. chattel mortgage D. amortization
4. A mortgage on a movable property.
A. mortgage C. collateral
B. chattel mortgage D. amortization
5. Any remaining debt at a specified time.
A. amortization C. balance
B. mortgage D. outstanding balance
6. A method of paying a loan (principal and interest) on installment basis,
usually of equal amounts at regular intervals.
A. amortization C. balance
B. mortgage D. outstanding balance

7. A loan of ₱ 425,000 is to be repaid in full after 3years. If the interest rate is 9%

per annum. How much should be paid after 3 years?
A. ₱ 550,387.33 C. ₱ 356,430
B. ₱ 437, 452.18 D. ₱ 286,907

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8. If a car loan of ₱ 680,000 requires a 18% down payment. How much is the
mortgage?
A. ₱ 122,400 C. ₱ 383, 060
B. ₱ 221,040 D. ₱ 557,600
9. A consumer loan of ₱ 200,000 is to repay in monthly installment for 1 year. How
1
much is the monthly payment if money is worth 12% converted monthly?
A. ₱ 16,802.39 C. ₱ 100,814.36
B. ₱ 33,604.78 D. ₱ 201,628.72
10. Mr. and Mrs. Banal purchased a house and lot worth ₱ 4,000,000. They paid a
down payment of ₱ 800,000. They plan to amortize the loan of ₱ 3,200,000 by
paying monthly for 20 years. The interest rate is 12% convertible monthly. What
is the total interest paid?
A. ₱ 35,234.76 C. ₱ 3,200,000
B. ₱ 58,914.78 D. ₱ 5,256,342.40

Key to answer on page 16

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 Key to Answers

What I know
1. B 5.D 9. A
2. C 6. D 10. B
3. A 7. C
4. B 8. D

Lesson 1
Activity 1: Business or consumer loan?
1. Business 4. Consumer
2. Business 5. Consumer
3. Consumer

Lesson 2:
Activity 1: Solving Problems on Business and Consumer Loans
1. ₱ 1,225,043 6. ₱ 2,538,000
2. ₱ 59,557.12 7. ₱ 4,573.65
3. ₱ 960,000 8. ₱ 13,290.89
4. ₱ 1,960,000 9. 156
5. ₱ 2,700,000 10. ₱ 466,841.46

Activity 2: Problem Solving

1. ₱ 5,795.48
2. ₱ 326.12
3. ₱ 2,984.70
4. A. ₱ 100,000
E. ₱ 31,547.08
F. ₱ 7,845.29
G. ₱ 23,701.79
H. 0

Assessment
1. A 5.D 9. A
2. C 6. D 10. D
3. A 7. A
4. B 8. D

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 Glossary of Terms

 Business Loan – money lent specifically for a business purpose. It may be

used to start a business or to have a business expansion.

 Consumer Loan – money lent to an individual for personal or family purpose.

 Collateral – assets used to secure the loan. It may be real-estate or other

investments.

 Term of the Loan – time to pay the entire loan.

 Amortization Method – method of paying a loan (principal and interest)

on installment basis, usually of equal amounts at regular intervals.

 Mortgage – a loan, secured by a collateral, that the borrower is obliged to pay

at specified terms.

 Chattel Mortgage – a mortgage on a movable property.

 Collateral – assets used to secure the loan. It may be a real-estate or

other Investments.

 Outstanding Balance – any remaining debt at a specified time.

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References

Crisologo, L., Hao, L., Miro, E., Palomo, E., Ocampo, S., and Tresvalles, R.
General Mathematics Teacher’s Guide. Department of Education-
Bureau of Learning Resources, Ground Floor Bonifacio Bldg, DepEd
Complex Meralco Avenue, Pasig City, Philippines 1600. Lexicon Press
Inc. (2016). blr.lrpd@deped.gov.ph.

Image in the Cover Page of Module 9. Usage Rights (Labeled for Reuse)
https://bit.ly/2KvPtue

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