Lesson : Graphing Logarithmic Functions

Learning Outcome(s): At the end of the lesson, the learner is able to represent a
logarithmic function through its table of values, graph, and equation, find the domain
and range of a logarithmic function, and graph logarithmic functions

Lesson Outline:
1. Graph of y = logbx for b > 1 and for 0 < b < 1
2.Domain, range, intercepts, zeroes, and asymptotes of logarithmic functions
3.Graphs of transformations of logarithmic functions

In the following examples, the graph is obtained by first plotting a few points. Results
will be generalized later on.
Example 1. Sketch the graph of y = log2x.
Solution.
Step 1: Construct a table of values of ordered pairs for the given function. A table of
values for y = log
2x is as follows:

Step 2: Plot the points found in the table, and connect them using a smooth curve.

It can be observed that the function is defined only for x > 0. The increasing, and attains all real values. As x approaches 0 from the
decreases without bound, i.e., the line x = 0 is a vertical asymptote
Example 2. Sketch the graph of y = log1/2x.
Solution.
Step 1: Construct a table of valuevalues for y = log 2x is as follows:

Step 2: Plot the points found in the table, and connect them using a smooth curve.
It can be observed that the function is defined only for x > 0. The function is strictly decreasing, and attains all real values. As x
approaches 0 from the right, the function increases without bound, i.e., the line x = 0 is a vertical asymptote.
In general, the graphs of y = logbx, where b > 0 and b 1 are shown below.

PROPERTIES OF LOGARITHMIC FUNCTIONS:

1.The domain is the set of all positive numbers, or {x ∈ R | x > 0}.
2.The range is the set of all positive real numbers.
3.It is a one-to-one function. It satisfies the 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.
Relationship Between the Graphs of Logarithmic and Exponent Since logarithmic and exponential functions are inverses of each are
reflections of each other about the line y = x, as shown below.
Example 3. Sketch the graph of y = log3x – 1.
Solution.
Sketch the graph of the basic function y = log3x. Note that the base 3 > 1. The “–1” means vertical shift downwards by 1
unit. Some points on the graph of y = log3x are (1,0), (3,1), and (9,2). Shift these points 1 unit down to obtain (1, –1), (3,0), and (9,1).
Plot these points.

The examples above can be generalized to form the following guidelines for graphing transformation of logarithmic functions.

Solved Examples
Analyze each of the following functions by (a) using the transformations to describe
how the graph is related to a logarithmic function y = log b x , (b) identifying the x-intercept, vertical asymptote, domain and range. (c)
Sketch the graph of the function.

a.) F(x) = log2(x-3)

Solution.
The graph of F(x) is shifted 3 units to the right from the graph of f(x) = log2 x

Domain: { x ∈ R∨x >3 ¿

Range: all real n
Vertical Asympto
x-intercept: (4, 0 )
The previous examples can be generalized to form the following guidelines for graphing transformations of logarithmic functions:

WRITTEN WORK 1
1. Find the value of the following logarithmic expressions:
a. log4(1/64) b. log1/264
2. Express logx + 2logy –3loga as a single logarithm

LESSON : Illustrating Simple and Compound Interest

Learning Outcome(s): At the end of the lesson, the learner is able to illustrate
simple and compound interest and distinguish between simple and compound
interest.
Lesson Outline:
1.Simple Interest
2.Compound Interest
Definitions of Terms:
Lender or creditor–person (or institution) who invests the money or makes the
funds available
Borrower or debtor –person (or institution) who owes the money or avails of the
funds from the lender
Origin or loan date –date on which money is received by the borrower
Repayment dateor maturity date –date on which the money borrowed or loan is to
be completely repaid
Time or term (t)– amount of time in years the money is borrowed or invested; length
of time between the origin and maturity dates
Principal (P)– amount of money borrowed or invested on the origin date
Rate(r)– annual rate, usually in percent, charged by the lender, or rate of increase of
the investment
Interest (I)– amount paid or earned for the use of money
Simple Interest (Is) – interest that is computed on the principal and then added to it
Compound Interest (Ic)–interest is computed on the principal and also on the
accumulated past interests
Maturity value or future value (F) –amount after t years that the lender receives
from the borrower on the maturity date
llustration of Simple and Compound Interest
Example 1. “Suppose you won 10,000 pesos and you plan to invest it for 5 years. A cooperative group offers 2%
simple interest rate per year. A bank offers 2% compounded annually. Which will you choose and why?”
Solution.
Investment 1: Simple Interest

Si
mple interest remains constant throughout the investment term. In compound interest, the interest from the previous year also earns
interest. Thus, the interest grows every year.
ACTIVITY :
Direction : Make a Venn diagram and show the relationship of Simple and Compound Interest. (20 Points)

Lesson: Simple Interest

Learning Outcome(s): At the end of the lesson, the learner is able to compute interest, maturity value, and present value in simple
interest environment, and solve problems involving simple interest
Lesson Outline:
1. Compute simple interest
2. Compute maturity value
3. Compute unknown principal, rate, or time
Example 1: A bank offers 0.25% annual simple interest rate for a particular deposit. How much interest will be earned if 1
million pesos is deposited in this savings account for 1 year?
Given: P = 1,000,000 I = 0.25% = 0.0025 t = 1 year
Find: Is
Solution:Is= Prt
Is = (1,000,000)(0.0025)(1)
Is= 2,500
Answer: The interest earned is P 2,500.
Example: How much interest is charged when P50,000 is borrowed for 9
Months at an annual interest rate of 10%?
Given: P = 50,000 r = 10% = 0.10 t =9/12 year
= 0.75 year
Find: Is
Solution: Is= Prt
Is= (50,000)(0.10)(9/25 )
Is= (50,000)(0.10)(0.75)
Is= 3,750
Answer: The simple interest charged is P 3,750.

ACTIVTY : Complete the table below by finding the unknown.

Is
1. The unknown principal can be obtained by P =
rt
Is
2. The unknown rate can be computed by r =
pt
Is
3. The unknown time can be calculated by t =
pr
4. The unknown simple interest is given by Is= Prt
Example : Find the maturity value if 1 million pesos is deposited in a bank at an annual simple interest rate of 0.25% after (a) 1
year (b) 5 years?
Given: P = 1,000,000 r = 0.25% = 0.0025
Find:
(a) Maturity or future value F after 1 year
(b) Maturity or future value F after 5 years
Solution
When t = 1, the simple interest
is given by

Written Works:
1. At what simple interest rate per annum will P 1 become P 2 in 2 years?
2. How much money will you have after 4 years and 3 months if you deposited P 10,000 in a bank that pays 0.5% simple
interest?
3. How long will 1 million pesos earn a simple interest of 100,000 at 1% per annum?
4. What are the amounts of interest and maturity value of a loan for P25, 000 at 12% simple interest for 5 years?
5. How much should you invest at the simple interest is 7.5% in order to have P300, 000 in 2 years,?

Lesson : Compound Interest

Learning Outcome(s): At the end of the lesson, the learner is able to compute interest, maturity value, and present value in compound
interest environment, and solve problems involving compound interest
Lesson Outline:
1.Maturity value
2.Present Value
The following table shows the amount at the end of each year if principal P is invested at an annual interest rate r compounded
annually. Computations for the Particular example P = P100,000 and r = 5% are also included.

Example 1. Find the maturity value and the compound interest if P10,000 is compounded annually at an interest rate of
2% in 5 years.
Given: P = 10,000 r = 2% = 0.02 t = 5 years
Find: (a) maturity value F
(b) compound interest Ic
Solution:
(a) F= P(1+r)t
F = (10,000)( 1 + 0.02)5
F = 11,040. 081
( b ) Ic= F –P
Ic= 11,040.81 –10,000
Ic = 1,040.81
Answer: The future value F is P11,040. 81 and the compound interest is P1,040.81.

Example : . Suppose your father deposited in your bank account P10,000 at an annual interest rate of 0.5% compounded yearly
when you graduate from kindergarten and did not get the amount until you finish Grade 12. How much will you have in your bank
account after 12 years?
Given: P = 10,000 r = 0.5% = 0.005 t = 12 years
Find: F
Solution: The future value F is calculated by
F= P(1+r)t
F = (10,000)(1 + 0.005)12
F = 10,616.78
Answer: The amount will become P10,616.77 after 12 years.
Present Value P at Compound Interest: The present value or principal of the maturity value F due in t years any rate r can be obtained
from the maturity value formula F= P(1+r)t
Solving for the present value P,

Example : How much money should a student place in a time deposit in a bank that
pays 1.1% compounded annually so that he will have P200,000 after 6 years?
Given: F = 200,000 r = 1.1% = 0.011 t = 6 years
Find: P
Solution: The present value P can be obtained by
P=
P=
P = 187,293.65
Answer: The student should deposit P187,293.65 in the bank.
Written Works
1. Mr. Bautista aims to have his investment grow to P500,000 in 4 years. How much
should he invest in an account that pays 5% compounded annually
2. Mrs. Versoza wants to compare simple and compound interests on a P350,000 investment for 3 and 3 months years.
a.Find the interest if funds earn 6.5% simple interest for 1 year.
b.Find the interest if funds earn 6.5% interest compounded annually.
c. Find the difference between the two interests.
3. Mr. Ocampo invested P150,000 at 10% compounded annually. He plans to getthis amount after 6 years for his son’s college
education. How much will he get?
4. Mr. Bautista aims to have his investment grow to P500,000 in 4 years. How much should he invest in an account that pays
5% compounded annually?

Lesson : Compounding More than Once a Year

Learning Outcome(s): At the end of the lesson, the learner is able to compute
maturity value, interest, and present value, and solve problems involving compound
interest when compound interest is computed more than once a year
Lesson Outline:
1. Compounding more than once a year
2. Maturity value, interest, and present value when compound interest is computed more than once a year
Sometimes, interest may be compounded more than once a year. Consider the following example.
 Example 1. Given a principal of PhP 10,000, which of the following options will yield? greater interest after 5 years:
OPTION A: Earn an annual interest rate of 2% at the end of the year, or
OPTION B: Earn an annual interest rate of 2% in two portions—1% after 6 months, and 1% after another 6 months?
Solution.

OPTION B: Interest is compounded semi-annually, or every 6 months.

Under this option, the interest rate every six months is 1% (2% divided by 2).

Answer: Option B will give the higher interest after 5 years.If all else is equal, a more frequent compounding will result in a higher
interest, which is why OptionB gives a higher interest than Option A.The investment scheme in Option B introduces new concepts
because interest is compounded twice a year, the conversion period is 6 months, and the frequency of conversion is 2. As the
investment runs for 5 years, the total number ofconversion periodsis 10. The nominal rate is 2% and the rate of interest for each
conversion period is 1%. These terms are defined generally below.
Definition of Terms:
Frequency of conversion (m) –number of conversion periods in one year
Conversion or interest period–time between successive conversions of interest
Total number of conversion periods n
n = mt = (frequency of conversion)(time in years)
Nominal rate (i(m)) –annual rate of interest
Rate (j) of interest for each conversion period
Note on rate notation: r, i(m), j
In earlier lessons, r was used to denote the interest rate. Now that an interest
rate can refer to two rates (either nominal or rate per conversion period), the symbols i(m) and j will be used instead.
Examples of nominal rates and the corresponding frequencies of conversion
and interest rate for each period:

Example 2. Find the maturity value and interest if P10,000 is deposited in a bank at
2% compounded quarterly for 5 years.
Given: P = 10,000 i
(4)
= 0.02 t = 5 years m = 4
Find: a. F
b. P

Written Works
1-5Debbie wants to compare the simple interest to compound interest on a P 60,000
investment.
1.Find the simple interest if funds earn 8% simple interest for 1 year.
 2.Find the interest if funds earn 8% compounded annually for 1 year
3.Find the interest if funds earn 8% compounded semi-annually for 1 year.
4.Find the interest if funds earn 8% compounded quarterly for 1 year.
5. Which is the best investment? Why?

Lesson : Finding Interest Rate and Time in Compound Interest

Learning Outcome(s): At the end of the lesson, the learner is able to solve
problems involving rate of interest and time in compound interest
Lesson Outline:
1.Interest and time in compound interest
2.Equivalent interest rate

Example 1: How long will it take P1,000 to earn P300 if the interest is 12% compounded semi-annually?

Definition of terms:
Equivalent rates – two annual rates with different conversion periods that will earn
the same maturity value for the same time/term
Nominal rate –annual interest rate (may be compounded more than once a year)
Effective rate–rate when compounded annually will give the same compound each year with the nominal
rate; denoted by i(1)
Example .What effective rate is equivalent to 10% compounded quarterly?
ACTIVITY :
1. At what interest rate compounded quarterly will money double itself in 10 years?
2. At what nominal rate compounded semi-annually will P10,000 accumulate to P15,000 in 10 years
3. How long will a principal earn 50% of this amount at 6% compounded quarterly?

Lesson : Simple Annuity

Learning Outcome(s): At the end of the lesson, the learner is able to illustrate
simple and general annuities, distinguish between simple and general annuities, find
the future and present values of simple annuities, computes the periodic payment of
a simple annuity
Lesson Outline:
1.Definition of Terms
2.Time Diagrams
3.Future Value of a Simple Annuity
4.Present Value of a Simple Annuity
5.Periodic Payment of a Simple Annuity
Definition of Terms:
ANNUITY–a sequence of payments made at equal(fixed) intervals or periods of time

Annuities may be classified in different ways, as follows.

ANNUITIES
According to payment Simple Annuity- an General Annuity - an
interval and interest period annuity where the annuity where the
payment interval is the payment interval is not the
same as the interest same as the interest period
period
According to time of Ordinary Annuity (or Annuity Due - – a
Payment Annuity Immediate) – a type of annuity in which
type of annuity in which the payments are made at
the payments are made at beginning of each payment interval
the end of each payment
interval
According to duration Annuity Certain– an Contingent Annuity – an
annuity in which payments annuity in which the
begin and end at definite payments extend over an
times indefinite (or
indeterminate) length of
time
Term of an annuity, t –time between the first payment interval and last payment
interval

Regular or Periodic payment, R –the amount of each payment

Amount (Future Value) of an annuity, F –sum of future values of all the payments
to be made during the entire term of the annuity
Present value of an annuity, P –sum of present values of all the payments to be
made during the entire term of the annuity
Annuities may be illustrated using a time diagram. The time diagram for an ordinary
annuity (i.e., payments are made at the end of the year) is given below.

Example 1. Suppose Mrs. Remoto would like to save P3,000 every month in a fund
that gives 9% compounded monthly. How much is the amount or future value of her
savings after 6 months?
Given:
periodic payment R = P3,000
term t = 6 months
interest rate per annum i(12)= 0.09
number of conversions per year m = 12
interest rate per period j = 0.9/12 = 0.0075
12
09 .0
= 0.0075
Find: amount (future value) at the end of the term, F
Solution.

(3) Add all the future values obtained from the previous step.
3000 = 3000
3000(1 + 0.0075)= 3022.5
3000(1 + 0.0075)2= 3045.169
3000(1 + 0.0075)3= 3068.008
4
3000(1 + 0.0075) = 3091.018
3000(1 + 0.0075)5= 3114.20
__________________
F =18340.89
Thus, the amount of this annuity is P18,340.89.

Amount (Future Value) of an Ordinary Annuity:

The derivation of the formula in finding the amount of an ordinary annuity is similar to
the solution of Example 1.

Illustrate the cash flow in a time diagram.

 F(1+j) –F = R(1+j)n- R
F[(1+j) - 1] = R[(1+j)n– 1]
F(j) = R [(1+j)n-1]
( 1+ j )n−1
F=R
j
( 1+ j )n−1
The expression is usually denoted by the symbol s sń read as “s angle n”.
j
Alternate Solution for Example No. 1

( 1+ j )n−1
F=R
j
( 1+ 0.0075 )6−1
F = 3000
0.0075
F = 18,340.89
Example 2.In order to save for her high school graduation, Marie decided to save P200 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?
Given: R = 200
m = 12
i(12)= 0.250% = 0.0025
j = 0025 .0 / 12 = 0.000208́ 3
t = 6 years
n = tm = (6)(12)= 72 periods
Find: F
Solution.
( 1+ j )n−1
F=R
j
( 1+ 0.00020 8́ 3 )72−1
F=R
0.00020 8́3
F = 14,507.85
Hence, Marie will be able to save P14, 507.85 for her graduation
Example 5. Paolo borrowed P 100 000. He agrees to pay the principal plus interest by paying an equal amount of money each year for
3 years. What should be his annual payment if interest is 8% compounded annually?

Given: P = 100 000

DEPED
i(1)= 0.08
m=1
j = 0.08
t = 3 years
n = mt = (1)(3) = 3 periods
FIND : periodic payment R
Solution : The cash flow of this annuity is illustrated in the time diagram given below.
R =? R =? R =?
0 1 2 3
1−( 1+ j )−n
Since P = R , then
j
1−( 1+ j )−n
R= P/
j
1−( 1+0.08 )−3
R = 1000 /
0.08
R = 38, 803.35
Thus, the man should pay P38,803.35 every year for 3 years.
WRITTEN WORK
1. Aling Paring started to deposit P2,000 quarterly in a fund that pays 5.5% compounded quarterly. How much will be in the
fund after 6 years?
2. The buyer of a house and lot pays P200,000 cash and P10,000 every month for 20 years. If money is 9% compounded
monthly, how much is the cash value of the lot?
3. Grace borrowed P150,000 payable in 2 years. To repay the loan, she must pay an amount every month with an interest rate of
6% compounded monthly. How much should he pay every month?
Lesson : General Annuity
Learning Outcome(s): At the end of the lesson, the learner is able to find the future and present values of general annuities and
compute the periodic payment of a general annuity, and calculate the fair market value of a cash flow stream that includes an annuity.
Lesson Outline:
1.Future Value of a General Annuity
2.Present Value of a General Annuity
3.Fair Market Value of a Cash Flow Stream that Includes and Annuity
Recall from the past lesson :
General Annuity–an annuity where the length of the payment interval is not the same as the length of the interest compounding
period

General Ordinary Annuity –a general annuity in which the periodic payment is made at the end of the payment interval

Examples of General annuity:

1.Monthly installment payment of a car, lot, or house with an interest rate that is compounded annually
2.Paying a debt semi-annually when the interest is compounded monthly

The formulas for F and P are same as those in Lesson 28. The extra stepoccurs in
finding j: the given interest rate per period must be converted to an equivalent rate
per payment interval.
Example 1. Cris started to deposit P1,000 monthly in a fund that pays 6%
compounded quarterly. How much will be in the fund after 15 years?
Given: R = 1,000 n = 12(15) = 180 payments i(4)= 0.06m = 4
Find: F
Solution:
The cash flow for this problem is shown in the diagram below.
1000 1000 1000 …. 1000 1000
0 1 2 3 … 179 180

(1) Convert 6% compounded quarterly to its equivalent interest rate for monthly Payment interval.
F1= F
I (12) ( 12)t I ( 4) ( 4 )t
P( 1 + ¿ ¿ = P( 1 + ¿¿
12 4
I (12) ( 12) 0.06 ¿ ( 4 )
(1+ ¿¿ = ( 1 + ¿¿
12 4
I (12) ( 12)
(1+ ¿ ¿ = (1.015)4
12
I (12) ( 12)
(1+ ¿¿ = ¿¿
12
i(12) 1 /3
=( 1 .015 ) −1
12

i ( 12 )
=0.00497521= j
12
Thus, the interest rate per monthly payment interval is 0.00497521 or 0.497521%.
Apply the formula in finding the future value of an ordinary annuity using the computed equivalent rate

( 1+ j )n−1
F=R
j
( 1+ 0.00497521 )180 −1
F = 1000
0.00497521
F = 290,082.51
Thus, Cris will have P290, 082.51 in the fund after 20 years.
Number of Decimal Places

When solving for an equivalent rate, say j = (1.015)1/3– 1 in Example 1, six or more decimal places will be used. If you use fewer or more decimal places, your

answers may differ from the answers provided in the text. You can ignore these discrepancies, but it is suggested that you use at least six decimal places, or the exact

value.