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MATHEMATICS
Progression a1 (1 - r n )
Sum of terms in G.P. : Sn = , r<1
1-r
Sum of Infinite Geometric Progression
Arithmetic Progression ( A. P. )
a1
- a sequence of numbers if the differences S∞ =
1-r
between consecutive terms are the same.
7 , 10 , 13 , 16 , 19 …
Harmonic Progression (H.P.)
a1 a2 a3 a4 a5 … an
- a sequence of numbers in which their
a1 = the first term
reciprocals forms an arithmetic
an = the nth term
progression.
d = common difference
= a2 – a1 = a3 – a2
H.P. A.P.
5 1
nth term of A.P. 5
an = a1 + ( n-1 ) d
1 3
Sum of terms in A.P. 3
n
Sn = ( a1 + an )
2
n Binomial Theorem
or Sn = ( 2a1 + (n – 1)d )
2
Expansion of (a + b)
n
Geometric Progression ( G.P. )
Properties:
- a sequence of numbers if the ratios of 1. The number of terms in the expansion of (a +
consecutive terms are the same. b)n is n + 1.
2 , 6 , 18 , 54 , 162 … 2. The first term is an , the last term is bn.
a1 a2 a3 a4 a5 … an 3. The exponent of “a” descends linearly from n
to 0.
a1 = the first term
4. The exponent of “b” ascends linearly from 0 to
an = the nth term n.
r = common ratio 5. The sum of the exponents of a and b in any of
a2 a3 the terms is equal to n.
= = 6. The coefficient of the second term and the
a1 a2
second to the last term is n.
nth term of G.P.
an = a1 rn-1
rth term of (a + b)n
n!
rth term = (n- r + 1)! (r - 1)! an-r+1 br-1
n
if middle term : r = +1
2
MATHEMATICS
Pascal’s Triangle Distinguishable Permutations
- used to determine coefficients of the Suppose a set of n objects has n1 of one kind
terms in a binomial expansion. of object, n2 of a second kind, n3 of a third
kind, and so on, with n = n1 + n2 + n3 + …+ nk.
(a + b)0 1 n!
P = n ! n ! n !...n !
(a + b)1 1 1 1 2 3 k
(a + b)2 1 2 1
(a + b)3 1 3 3 1 Cyclical Permutation (Permutation of n things
(a + b)4 1 4 6 4 1 in a circle)
(a + b)5 1 5 10 10 5 1 P = (n – 1)!
(a + b)6 1 6 15 20 15 6 1
Combination
- a method of selecting subsets of a larger
Counting Principles, Permutations, set in which order is not important.
Combinations
Combinations of n elements taken r at a time
n!
Fundamental Counting Principle nCr = = (n - r)! r!
Let E1 and E2 be two events. The first event
E1 can occur in m1 different ways. After E1
Probability
has occurred E2 can occur in m2 different
ways.The number of ways that the two
Probability of an Event
events can occur is m1• m2.
If an event E has n(E) equally likely outcomes
and its sample space S has n(S) equally likely
Permutation
outcomes, then the probability of event E is
-is an ordering of the elements such that one
element is first, one is second, one is third,
n( E) favorable outcome
and so on. P(E) = n( S) = probable outcome
Permutations of n elements
P = n!
MATHEMATICS
Probability of Independent Events Properties of Logarithms
Two events are independent if the
occurrence of one has no effect on the Base Logarithm
occurrence of the other. To find the 1. log (uv) = log u + log v
probability that two independent events will u
2. log = log u – log v
occur, multiply the probabilities of each. v
3. log un = n log u
P ( A and B ) = P(A) • P(B) 4. loga a = 1
log v
5. logu v = logu
Probabilty of Mutually Exclusive Events
6. loga m = n then an = m
Two events A and B (from the same sample
7. log m = log n then m = n
space) are mutually exclusive if A and B have
Natural Logarithm
no outcomes in common.
8. ln (uv) = ln u + ln v
P( A U B ) = P(A) + P(B) u
9. ln = ln u – ln v
v
Probability of the Complement of an Event 10. ln un = n ln u
The complement of an event A is the 11. ln u = loge u , e = 2.718
collection of all outcomes in the sample space
that are not in A. Quadratic Equation
P ( A’ ) = 1 – P (A)
If Ax2 + Bx + C = 0
Properties of Exponents
-B ± B2 4AC
x =
1. a a = a
m n m+n
2A
am where B2 – 4AC is called the discriminant
2. = a m–n
an
1 if B2 = 4AC , the roots are equal
3. a-n = n
a if B2 > 4AC , the roots are real, unequal
4. a0 = 1 , a ≠ 0 if B2 < 4AC , the roots are imaginary
5. (ab)m = am bm
6. (am)n = am n Properties of Roots
a am B
7. ( )m = m Sum of roots : x1 + x2 = -
b b A
8. a2 = a 2 = a2 C
Product of roots : x1 x2 =
A
MATHEMATICS
Verbal Problems
Key Words and Phrases Verbal Description Algebraic Statement
Equality
Equals, equal to, is are, was, The sale price S is 10 less S = L – 10
will be, represents than the list price L.
Addition
Sum, plus, greater, increased The sum of 5 and x 5+x
by, more than, exceeds, total Seven more than y Y+7
of
Subtraction
Difference, minus, less, The difference of 4 and b 4–b
decreased by, subtracted Three less than z z–3
from, reduced by, the
remainder
Multiplication
Product, multiplied by, twice, Two times x 2x
times, percent of
Division
Quotient, divided by, ratio, The ratio of x and 8 x
per 8
Work Problem
Variance and Standard Deviation
MATHEMATICS
Clock Problem Variation Problem
Case I: clock with hour hand and minute hand x is directly proportional to y
x Q y x = ky
x is inversely proportional to y
12 1 1
11 1 xQ y x = ky
10 2 k = constant of proportional
9 3
Proportion Problem
8 4
7 5 a c
6 a:b=c:d =
b d
x = number of minutes the minute hand moves b and c are called means
x a and d are called extremes
= number of minutes the hour hand moves
12 d is the fourth proportional to a, b, and c
Case II: clock with hour hand, minute hand - the mean proportional to a and b is ab
and second hand
Rate Problem
- motion of body with uniform velocity.
Distance = Rate x Time
12
11 1
10 2 Age Problem
9 3
Past Present Future
8 4 was is will be
7 5 ago now
6
10 8
MATHEMATICS
Determinants & Matrices Determinants
Minors & Cofactors of a square matrix Determinant of 2 x 2 matrix
- if A is a square matrix, then the minor
1 3
Mij of the entry aij is the determinant
5 2
of the matrix obtained by deleting the
ith row and jth column A. The cofactor
Determinant of 3 x 3 matrix
Cij of the entry aij is given by :
Cij = (-1)i+j Mij. 1 3 2
2 1 4
Sign pattern for cofactors 3 2 1
+ - + - Determinant of 4 x 4 matrix
- + - +
+ - + - 2 0 1 1
1 2 2 3
- + - +
3 2 3 2
4 4 2 3
Equality of Matrices
Complex Numbers
a b c -1 3 0
d e f = 5 -2 4
g h I -8 9 7 For real numbers a and b, the number
a + bi
Operations of Matrices is a complex number, bi is an imaginary number.
1. Addition / Subtraction i2 = -1
2. Multiplication
3. Adjoint Matrix : Aadj Operations of complex numbers
- is a matrix formed from the Addition
transposed cofactor matrix. (a + bi) + (c + di) = (a + c) + (b + d)i
4. Inverse Matrix : A-1 Subtraction
Aadj (a + bi) - (c + di) = (a - c) + (b - d)i
A-1 = Multiplication
A
(a + bi)(c + di)
Division
a + bi
c + di
MATHEMATICS
Forms of Complex Number PLANE GEOMETRY & MENSURATION
Algebraic form : a + bi
TRIANGLE – a polygon having three sides.
Trigonometric form: r(cos θ + i sin θ ) = r Cis
θ c
b
Polar form : r ∠θ Right triangle – is a triangle
having one right angle.
Vectors a
1
Area, A = ab
2
A = Axi + Ayj + Azk Pythagorean theorem: c2 = a2 + b2
B = Bxi + Byj + Bzk
Vector
x Additionx : C = Isosceles
A + B triangle – is a triangle
C = (Ax + Bx)i + (Ay + By)j two
having equal
+ (A sides
z + Bz)k
y
Vector Multiplication (Dot product)
A • B = AxBx + AyBy + AzBz 1
Area, A = x y sin θ or A =
2
1
Vector Multiplication (Cross product) x ( x) sin β
i j k 2
AxB = Ax Ay Az
Bx By Equilateral
Bz triangle – is a triangle
x x
having three equal sides
Vector Multiplication (Triple product)
x
Ax Ay Az
CIRCLE – is a plane closed curve, all points of
A x B • C = Bx By Bz
Cx Cy Cz which are at the same distance from a point
within called the center
A circle is inscribed in a
a polygon when the sides of the
r b polygon are tangent to it.
•
Area of triangle
c
A=rS
a +b+c
Inscribed circle S=
2
MATHEMATICS
CIRCLE – is a plane closed curve, all points of
TheAnperpendicular
inscribed bisectors
angle is
which are at the same of distance
the from a passpoint
measuredof abytriangle
sides one-half the
within called the center
through x x Isosceles triangle – is a triangle
•
An centralaangle.
inscribed
Acentral common
angle is point
angleis an an
angle having two equal sides
calledwhose
angle circumcenter,
vertex is which
a pointis
whose vertex is the center of
equidistant
on the center
the circle and β
fromwhose
the sides
three
circumcenter
inscribed
central
angle
angle vertices
are chords.of and
the =
whose
triangle.
sides
x y a
•
r• r are radii. 2
A circle is inscribed in a
a polygon when the sides of the
r b polygon are tangent to it.
•
Area of triangle
c
A=rS
a +b+c
Inscribed circle S=
2
A circle is circumscribed
about a polygon when it
a passes through the vertices
b of the polygon.
r •
c
Area of triangle
abc
A=
Circumscribed circle 4r
a
b The bisectors of the three
•
angles of a triangle meet at a
common point called the
c incenter, which is equidistant
from the three sides of the
triangle.
incenter
MATHEMATICS
Trapezoid – is a quadrilateral
a a Ptolemy’s Theorem:
d The product
A circle
two andofonly is of
two sides
the segments ofincribed
awhich
chord
in a
are parallel.
polygon when the sides of the
Inscribed
b h circle
intersecting each other are equal.
a b = cAd= a +
polygon bare tangent to it. Trapezoid – is a quadrilateral
c h
2 two and only two sides of which
are parallel.
b a +b
h
A= 2
A IfBa tangent and a secant are drawn
A to a Parallelogram
circle from the same
d1 P – point,
is thea
tangent is a mean proportional
quadrilateral the opposite sides
d2 between theare
entire secant and its
if which parallel.
A external segment.
B 1
C A= d1 d2 sin
D
C PA · PA2= PB · PC
A A B
B Rhombus – is aare
If two secants parallelogram
drawn to a A
d1 P with
circleequal
from sides are point,
the same oblique
the
d2 angles.
product of one entire secant
C and its1 external segments
d1 d2 of the other.
A = the product
equals 2
D D C PA · PB = PC · PD
c Cyclic Quadrilateral
d Polygons – is a plane closed broken line.
A d1 ac + bd = d1 d2
CSum of interior angles = (n-2) 1800
d2 A C
b + = 180
n = number of sides
0
a B + D = 1800
πh 2
R Volume :V =
3
( R + r 2 + Rr)
h
Lateral Area Zone
Spherical Rbases)
: S =(Two + r) L
r
Surface Area, S = 2 r h
MATHEMATICS
A
Right Prism
Spherical Segment (One base)
h
Volume, V = A h
A = base area 2
r h
Volume, V = π h (3r - h)
3
h
Spherical Segment (Two bases)
h4 Truncated Prism
h h1
Volume,
Volume, V V = A ( haverage )
h2 h3 A =πbase area
r h
= (3a 2 + 3b 2 + 4h 2 )
24
a A
Prismatoid
L
Volume, V = ( A1 + 4 A m + A 2
Spherical Sector 6
/ Spherical Cone
) 2
Volume,
A1 & A2 = V
end=area π r2 h
3
b Am = area at mid section
h
Cube
Spherical Wedge
3
Volume, V = aπ r3 θ
r Volume, V =
270 o
Surface Area, S = 6a2
= central angle of wedge
Radius of sphere
circumscribing a cube
3
R= a
2
aSpherical
= side ofLune
cube
πr2 θ
Surface Area, S =
90 o
= central angle of lune
MATHEMATICS
POLYHEDRON – is a solid bounded by planes.
Volume, V = 270 o
2 3 Surface Area
V= a A= 8.66 a 2
12
Surface Area Radius of Inscribe Sphere
A= 3a 2 R= 0.76 a
Radius of Inscribe Sphere
6 PLANE TRIGONOMETRY
R= a
12
a = length of side of plane Right Angle Formulas
Hexahedron – a polyhedron having six plane faces.
Volume
Hypotenuse, c
V= a3
Opposite, a
Surface Area
A= 6 a2
Radius of Inscribe Sphere
a Adjacent, b
R=
2
opposite a
Sin = hypotenuse
=
c
Octahedron – a polyhedron having eight equal faces each
adjacent b
of which is an equilateral triangle. Cos = =
Volume hypotenuse c
2 3 sin θ a
V= a Tan = =
cos θ b
3
cos θ b
Surface Area Cot = =
A= 2 3 a2 sin θ a
1 c
Radius of Inscribe Sphere Sec = =
cos θ b
6
R= a 1 c
6 Csc = =
sin θ a
Versed sin = 1 – cos
Dodecahedron – a polyhedron having twelve equal faces
each of which is a regular pentagon. Coversed sin = 1 – sin
Volume Exsecant = sec
V= 7.66 a 3
Surface Area Pythagorean Relation
A= 20.65 a 2
sec2 = 1 + tan2
Radius of Inscribe Sphere
sin2 + cos2 = 1
R= 1.11a
csc2 = 1 + cot2
MATHEMATICS
Fundamental Identities
SPHERICAL TRIGONOMETRY
Addition Formula
sin ( A + B ) = sin A cos B + sin B cos A Right Spherical Triangles
A
cos ( A + B ) = cos A cos B - sin A sin B
tan A + tan B co-A
tan ( A + B ) = 1 - tan A tan B
b c b
co-c
B
C a
Subtraction Formula
B cos Aa
sin ( A - B ) = sin A cos B - sin co-B
cos ( A - B ) = cos A cos B + sin A sin B
tan A - tan B
tan
Right(Spherical
A - B )Triangle
= 1 + tan A tan B Napier’s Circle
Double Angle Formula
sin 2A = 2 sin A cos A Napier’s Rules
cos 2A = cos2 A – sin2 A = 1 – 2 sin2 A Rule I (Tan – Ad Rule) : The sine of any middle
2 tan A part is equal to the product of the tangents of
tan 2A = the two adjacent parts.
1 - tan 2A
cot 2 A - 1
cot 2A = 2 cot A Rule II (Co – Op Rule) : The sine of any middle
Powers of Function part is equal to the product of the cosines of the
1 two opposite parts.
sin2 A = (1 – cos 2A)
2
1 Note : In applying Napier’s Rules, any one of the five
cos2 A = (1 + cos 2A)
2 circular parts mentioned above maybe called a middle
1 - cos 2A
tan2 A = part, the parts next to it are adjacent parts, and the
1 + cos 2A
other two parts are called opposite parts.
1 + cos 2A
cot2 A = 1 - cos 2A
B Oblique Spherical Triangles
Law of Sines c B
sin A sin B sin C a Law of Sines
= = c sin a sin b sin c
a b c A = =
A sin A sin B sin C
a
Law of Cosines b C
b Law of Cosines for the Sides
a = b + c – 2bc Cos A
2 2 2
MATHEMATICS
Parallel Lines
y Line 1: slope
ANALYTIC is m1
GEOMETRY
Line 2: slope is m2
y
STRAIGHT LINE P2 (x2 , y2)
m1 = m 2
d
O x
C (x2 , y1)
P1(x1 , y1)
x
O A (x1 , 0) B (x2 , 0)
C
Perpendicular Lines
y Line 1: slope is m1
m1 m2 = -1
Distance Formula
O x
d= (x - x ) 2 + (y - y )Line
2 1 2 1
2
2: slope is m2
Slope of a Line
Q (x1 , y1)
y Q (x2 , y2)
O x
2. Point-Slope Form : y – y1 = m ( x – x1 )
R (x2 , y1)
P(x1 , y1)
y P(x1 , y1)
O x
x
O
Slope, m = tan
RQ y 2 - y1
Line : slope is m
PR x 2 - x1
MATHEMATICS
3. Slope-Intercept Form : y = mx + b CIRCLE
- a locus of a point which moves at a constant
y distance from a fixed point called the center
and the constant distance of any point from
the center is called the radius.
b
x P
O
Line : slope is m
x y
4. Intercept Form : + =1
a b
y
Equation of Circle
b 1. General Form : Ax2 + By2 + Dx + Ey + F = 0
x A=B
O a
2. Standard Form
5. General Form : Ax + By + C = 0 a. Center at origin : C (0 , 0)
y
Distance from a point to a line:d =
Ax 1 + By1 +C x2 + y2 = r2
A 2 + B2 x
y
d
P (x1 , y1) b. Center at ( h , k) : C (h , k)
y
x
O
h
Ax + By + C =(x0 – h)2 + (y – k)2 = r2
m 2 - m1
Angle betweenk two lines: tan
1 + m1 m 2
y x
Line 1 : slope is m1
x
O
Line 2 : slope is m2
MATHEMATICS
PARABOLA 2. Standard Form
- a locus of a points which are equidistant from a a. Vextex at V(0,0) and opening to the right
fixed point called the focus and a fixed line called
the directrix. y2 = 4ax
V
b. Vextex at V(0,0) and opening to the left
y2 = - 4ax
directrix V = vertex V
F = focus
LR = latus rectum
LR
V axis of parabola
Eccentrcity : e = 1
Latur Rectum : LR = 4a
d. Vextex at V(0,0) and opening downward
Equation of Parabola
1. General Form
a. Axis parallel to x.
Ax2 + Dx + Ey +VF = 0
b. Axis parallel to y.
By2 + Dx + Ey + F = 0
x2 = - 4ay
MATHEMATICS
e. Vextex at V(h, k) and opening to the right
(y – k)2 = 4a(x – h) ELLIPSE
- a locus of a point whose sum of the distances
from two fixed points called the foci is constant
and is equal to the length of the major axis, 2a.
h V
directri V1 d F1 da c
1 C bd2 c a F2d V2 directri
f. Vextex at V(h, k) and opening to the left
(y – k)2 = - 4a(x – h)
latus rectum minor axis
h V
(x – h)2 = 4a(y – k)
major axis
h C = center of ellipse
V F1 & F2 = the two fixed points called foci
k
V1 & V2 = vertices of ellipse
a + a = length of major axis = d1 + d2
c
Eccentricity: e = must be less than 1
a
h. Vextex at V(h, k) and opening downward
a
Distance from center to directrix: d =
e
(x – h)2 = - 4a(y – k)
Relation of a, b and c : a2 = b2 + c2
2b 2
Length of latus rectum : LR =
a
h V
Equation of Ellipse
k 1. General Form
a. Major axis parallel to x.
Ax2 + By2 + Dx + Ey + F = 0
b. Major axis parallel to y.
Ax2 + By2 + Dx + Ey + F = 0
MATHEMATICS
2. Standard Form
a. Center at C(0,0) and major axis parallel to x d. Center at C(h,k) and major axis parallel to y
2 2
x y
2 + 2 =1
(x - h) 2 a (y - k)
b2
+ =1
b2 a2
C C
b. Center at C(0,0) and major axis parallel to y
x 2 y2
+ =1
b2 a 2
C HYPERBOLA
- a locus of a point whose difference of the
distances from two fixed points called the foci is
constant and is equal to the length of the
transverse axis, 2a.
MATHEMATICS
b. Center at C(0,0) and transverse axis parallel to y
transverse axis conjugate axis
y2 x2
- =1
a2 2
blatus
rectum
b
V1
F1 b C V2 F2
a a
c c
d c. Center at C(h,k) and transverse axis parallel to x
assymtote directrix
2 2
(x - h) (y - k)
- =1
a2 b2
C = center of hyperbola
F1 & F2 = the two fixed points called foci
V1 & V2 = vertices of hyperbola
a + a = length of transverse axis = d2 – d1
c
Eccentricity: e = must be greater than 1
a
a
Distance from center to directrix: d = d. Center at C(h,k) and transverse axis parallel to y
e
Relation of a, b and c : c = a + b
2 2 2
(y - k) 2 (x - h) 2
2b 2
Length of latus rectum : LR = 2 - =1
aa b2
Equation of Hyperbola
1. General Form
a. Transverse axis parallel to x.
Ax2 - By2 + Dx + Ey + F = 0
b. Transverse axis parallel to y.
By2 - Ax2 + Dx + Ey + F = 0
Equilateral Hyperbola
2. Standard Form
a. Center at C(0,0) and transverse axis parallel to x
x 2 y2
2 - 2 =1
a b
x2 – y2 = a2 2 2
y –x =a 2
MATHEMATICS
Tangents and Normals Cartesian and Polar Coordinates
x
Distance between two points
d= x2o + y2o + z2o
Direction Cosines
xo
diameter cos =
d
Diameter = locus of the mid-points of a system of yo
cos =
parallel chord. d
zo
cos =
dy d
Equation of diameter: m =
dx
m = slope of the parallel chords
dy
= first derivative of the equation of conic
dx
MATHEMATICS
Distance from a point P1(x1, y1, z1) to the Inverse Trigonometric Functions
Plane Ax + By + Cz + D = 0. du
d (arcsin u) =
1 - u2
Ax1 + By1 + Cz1 + D - du
d= d (arccos u) =
A2 + B2 + C 2 1 - u2
du
d (arctan u) =
1 + u2
Angle between two planes
- du
A1x + B1y + C1z + D = 0 d (arccot u) =
1 + u2
A2x + B2y + C2z + D = 0 du
d (arcsec u) =
u u2 - 1
- du
A1A2 + B1B2 + C1C2
Cos = d (arccosec u) =
u u2 - 1
A12 + B12 + C12 A2 2 + B2 2 + C2 2
Theorems of Limits
DIFFERENTIAL CALCULUS
Limit of a Constant
FORMULAS lim 2 = 2
x→ 2
Obvious Limit
Algebraic Functions:
lim x = 2
d (c) = 0 ; c is constant x→ 2
Trigonometric Functions
d (sin u) = cos u du
d (cos u) = - sin u du
d (tan u) = sec2 u du
d (cot u) = -csc2 u du
d (sec u) = sec u tan u du
d (csc u) = - csc u cot u du
MATHEMATICS
Curvature of Curve, k APPLICATION OF DIFFERENTIATION
k=
y"
3
[ 1 + ( y') 2
] 2
Abscissa: = x -
[
y' 1 + ( y') 2 ] 3. Select the quantity which is to be made a
y" maximum or minimum and express it as a
function of the other quantities.
4. Use information in the problem to
Ordinate: = y +
[ 1 + ( y') 2 ] eliminate all quantities but one so as to
y" have a function of one variable.
5. Differentiate and equate to zero, to get
Points of Inflection the maximum or minimum.
At points of inflection, the second derivative of
d2 y Related Rates
y is zero, Y” = =0
dx 2
Guides in solving problems of related rates
1. Draw a diagram. Label any numerical
Slope of the curve
quantities which remain fixed throughout
The slope of the curve y = f(x) at any point is
dy the problem (such as dimensions).
the first derivative of the function, y’ = . 2. Denote all quantities which change with
dx
time by letters. A relation (or relations) is
found among the quantities which vary;
these relations must hold for all time.
3. Take differentials of the relation or
relations found in guide 2. Divide by dt to
obtain a relation among the derivatives.
4. Insert the special numerical values of all
quantities to get the desired result.
MATHEMATICS
INTEGRAL CALCULUS du 1 a+ a 2 - u2
2
u a -u 2 = - a ln u +c
FORMULAS du 1 a+ a 2 + u2
2
u a +u 2 = - a ln u +c
n +1
u Integration by Parts
u n
du =
n +1
+c
u dv = u v - v du
eu du = eu + c
du
u = ln
u
+c
u
a
a u
du = ln a + c
sin u du = - cos u + c
cos u du = sin u + c
sec u du = tan u + c
2
du u
2
a -u
= arcsin a +
2 c
du 1 u
2
a +u 2 = a arctan a + c
du 1 u
2
u u -a 2 =
a arcsec a + c
du
u + a2
2 = ln ( u + u2 + a 2 )+c
du
u - a2
2 = ln u + u2 - a2 +c
du 1 u+a
a 2 - u2 = 2a ln u-a + c
MATHEMATICS
ENGINEERING ECONOMY i = effective interest per interest period
no min al int erest rate
= number of compoundin g per year
Simple Interest
n = total number of compoundings
- the interest earned by the principal is
computed at the end of the investment period.
To compute values of i and n:
nominal interest rate = 12 %
0 t
number of years of investment = 6 years
a. compounded annually
i = 0.12/1 = 0.12
P n = 6(1) = 6
F
b. compounded semi-annually
i = 0.12/2 = 0.06
Future Worth : F = P + I
n = 6(2) = 12
Interest earned : I = Prt
c. compounded quarterly
P = principal or present worth
i = 0.12/4 = 0.03
r = simple interest rate ( per year )
n = 6(4) = 24
t = time in years of fraction of a year
d. compounded monthly
Ordinary simple interest i = 0.12/12 = 0.01
- the interest is computed on the basis of one n = 6(12) = 72
banker’s year ( 1 banker’s year = 360 days ) e. compounded bi-monthly
i = 0.12/6 = 0.02
Exact simple interest n = 6(6) = 36
- the interest is based on the exact number of
days in a year ( ordinary year = 365 days, leap Continuous compounding
year = 366 days) Future Worth : F = Pert
MATHEMATICS
Ordinary Annuity
- the payments is made at the end of each period Annuity Due
starting from the first period. - the payment is made at the beginning of each
period starting from the first period.
0 1 2 3 4 n
0 1 2 3 4 n
A A A A A
A A A A A A
A [ (1 + i) n - 1 ] F
Future Worth : F =
i F1
0 1 2 3 4 n
F2
Perpetuity
- is an annuity where the payment periods extend
A A A A A
forever or the periodic payments continue
indefinitely.
P
A [ (1 + i) n - 1 ] A
Present Worth : P = Present worth of perpetuity : P =
(1 + i) n i i
A = periodic payment
P = present worth of all periodic payments Depreciation
F = future worth of all the periodic payments - is the decrease in the value of an asset due to
after the last payment is made usage of passage of time.
i = cost
interest rate per payment
n = number of payments
MATHEMATICS
Methods of Computing Depreciation Annual Cost, AC
AC = annual interest of investment
Straight Line Method + annual operation and maintenance
FC - SV + annual depreciation cost
Annual Depreciation =
n (FC - SV) i
Total Depreciation after m years AC = (FC)i + OC +
(1 + i) n - 1
FC - SV
= (m)
n
Capitalized Cost
Book Value = First Cost – Depreciation
Annual Cost
=
i
Sinking Fund Method
(FC - SV) i
Annual Depreciation = Benefit Cost Ratio
(1 + i) n - 1 Pr esent Worth of Benefits
Total Depreciation after m years = Pr esent Worth of Cost
A [ (1 + i) m - 1 ]
=
i Payout Period
Declining Balance Method (Mathesons Method) Fixed Capital Investment
= Annual Pr ofit + Annual Depreciation
Depreciation at the mth year
= FC ( 1 – k )m-1 k
k = annual rate of depreciation
SV
=1- n
FC
Book value at the mth year
= FC (1 – k)m