GEMMW01X: Mathematics in the Modern World

Bachelor of Science in Accountancy

3rd Semester, A.Y 2022-2023

Lesson 4 (Finals)

Mathematical Reasoning Modus

Ponens
Definition: Mathematical reasoning refers to
the ability of a person to analyze problem
situations and construct logical arguments to
create conceptual foundations and connections
to be able to process the available information
and solve the problem.

• Mathematical reasoning require more than

simple memorizing the facts but thinking
beyond rules and procedures to form one’s
own question and conjectures 2. Modus Tollens – states that if “if P then Q”
(P → Q) is true and the “negation of Q” (¬Q)
Inductive Reasoning is true, then the “negation of P” (¬P) will
also be true
• The process of making general conclusion
based on specific patterns
• Example: Science is the application of
inductive reasoning to build knowledge Modus
based on observable evidence Tollens
o Statements in science is considered
as theory

Deductive Reasoning

• The process of making specific conclusions

based on general principles like facts, rules,
definitions, or properties 3. Hypothetical Syllogism – states that if “if P
• Example: Mathematics is deductive then R” (P → R) is true whenever “if P then
reasoning applied to relations among Q” (P → Q) is true then “if Q then R” (Q →
patters, shapes, forms, structures, and even R) is true
changes.
Hypothetical
• Deductive reasoning makes use of
Syllogism
undefined terms, formally define terms,
axioms, theorems, and rules of inference

Theorem – is a statement that can be shown to

be true, a statement that has been proven to
be true

Proof – a sequence of statement that form an

argument which formulated theorem, the
explanation of why a statement is true 4. Disjunction Syllogism – states that if “P or
Q” (P∨Q) is true and “the negation of P”
Rules of Inference (¬P) is true, then proposition Q will be true

• Are templates for constructing valid

arguments
• Inference deriving conclusions from Disjunction
evidences Syllogism

Types of Inference Rules

1. Modus Ponens – states that if proposition P

and proposition “if P then Q” (P → Q) then
we can infer that proposition Q will be true
 GEMMW01X: Mathematics in the Modern World
Bachelor of Science in Accountancy
3rd Semester, A.Y 2022-2023

5. Addition – states that if proposition P is true

then “P or Q” (P∨Q) will be true

Addition

6. Simplification – states that if “P and Q”

(P^Q) is true, then proposition Q or
proposition P will also be true

Simplification

7. Conjunction – states that if proposition P

and proposition Q is true then “P and Q”
(P^Q) is true

Conjunction

8. Resolution – states that if “P or Q” (P∨Q)

and “the negation of P or R” (¬PVR) is true
then “Q and R” (Q∨R) will also be true

Resolution

• An argument constructed using the rule of

inference is said to be valid
• When all the propositions used in a valid
argument is true, it leads to a correct
conclusion
 GEMMW01X: Mathematics in the Modern World
Bachelor of Science in Accountancy
3rd Semester, A.Y 2022-2023

Lesson 5B: Data Management Classes:

Data Gathering and Organization 1. Try to keep the number of classes between
5 and 15
Data – are measurements or observations that 2. Make sure the classes do not overlap
are gathered from an event under study 3. Don’t leave out any numbers between the
Statistics – is the branch of mathematics that lowest and highest, even of nothing fall
involves collecting, organizing, summarizing, into a particular class
and presenting data and drawing general 4. Make sure the range of numbers included
conclusions from that data in a class

Populations and Sample Example and Solution:

• When statistical studies are performed, we

usually begin by identifying the population
for the study

Population – consists of all subjects under study

(i.e., all colleges in the Philippines)

• More often than not, it’s not realistic to

gather data from every member of a
population

Sample – is a representative subgroup or subset

of a population

Four Basic Sampling Method

1. Random Sample – in order to obtain a

random sample, each subject of the
population must have an equal chance of
being selected
2. Systematic Sample – a systematic sample is
taken by numbering each number of the
population and then selected every kth
member, where k is a natural number
• When using systematic sampling, its
important that the starting number is
selected at random
3. Stratified Sample – when a population is
divided into groups where the members of
each group have similar characteristics and
members from each group are chosen at
random
4. Cluster Sample – when an existing group of
subjects that represent the population is
used for a sample

Data Gathering and Organization

Raw Data – the data collected for a statistical

study

1. Frequency Distributions – a grouped

frequency distribution is a type of frequency
distribution that can be constructed using
numerical data
 GEMMW01X: Mathematics in the Modern World
Bachelor of Science in Accountancy
3rd Semester, A.Y 2022-2023

2. Stem and Leaf Plots – sometimes called a

stem plot, where each data value or number
is separated into parts:

Example:

• 53 – the tens digit, which is 5, is called the

stem and the ones digit which is 3 is called
the leaf
• 138 – the first two digits, 13 is called the
stem and the third digit, 8, is called the leaf
 GEMMW01X: Mathematics in the Modern World
Bachelor of Science in Accountancy
3rd Semester, A.Y 2022-2023

Lesson 5A: Data Management largest) and are measured on an ordinal,

interval, or ratio scale
Central Tendency
• The Median Formula (Ungrouped):
• Central Tendency – is a statistical measure o Get the total number of
that determines a single value that observations in the data
accurately describes the center of the o If the number is odd, the median
distribution and represents the entire formula is (n+1)/2
distribution of scores o If the number is even, find the two
• Goal: To identify the single value that is the middle terms using the formula n/2
best representative for the entire set of data and (n/2)+1. Then find the mean of
these 2 middle terms
• By identifying the “average score”, central
tendency allows researchers to summarize
or condense a large set of data into a single
value
• In addition, it is possible to compare two (or
more) sets of data by simple comparing the • The Median Formula (Grouped) can be
average score (central tendency) for one set expressed as: Median = Lb+[ {(n/2 – cf) /
versus the average score for another set fm} cw ] where:
o n – total frequency
The Mean, The Median, and The Mode o cf – cumulative frequency of class
The Mean before the median class
o fm – frequency of the class median
• The mean is the most commonly used o cw – class width internal of median
measure of central tendency class
• Computation of the mean requires scores o Lb – lower boundary of the class
that numerical values measured on an median
interval or ratio scale
The Mode
• The mean is obtained by computing the
sum, or the total for the entire set of scores, • The mode is defined as the most frequently
then dividing this sum by the number of occurring category or score in the
scores distribution
• The Mean Formula (Ungrouped) can be • The mode can be determined for data
expressed as: (Sum of Observations) / measured on any scale of measurement:
(Total Numbers of Observations) nominal, ordinal, interval, or ratio
• The Mean Formula (Grouped) can be • It is the only measure of central tendency
expressed as: x̄ = Σ fx/N where, used in both quantitative and qualitative
o x – the mean value of the set of data
given data • The Mode Formula (Ungrouped) can be
o f – frequency of the individual data expressed as: the most frequently
o n – sum of frequencies occurring data (if there is one)
o Hence, the average of all the data • The Mode Formula (Grouped) can be
points is termed as mean expressed as:
The Median

• If the scores in a distribution are listed in

order from smallest to largest, the median is o fm – frequency of modal class
defined as the midpoint of the list o f1 – frequency of class proceeding to
• The median divides the scores so that 50% modal class
of the scores in the distribution have values o f2 – frequency of class succeeding to
that are equal to or less than the median modal class
• Computation of the median requires scores o l – lower limit of the modal class
that can be placed in rank order (smallest to o h – width of the modal class
 GEMMW01X: Mathematics in the Modern World
Bachelor of Science in Accountancy
3rd Semester, A.Y 2022-2023

Range – the difference between the maximum

and minimum values in a set

Variance and Standard Deviation

4. Sample Variance (Ungrouped Data)
Variance – is a measure of dispersion that takes
into account the spread of all data points in a
data set

Standard Deviation – simple the square root of

the variance

1. Population Variance (Grouped Data)

2. Sample Variance (Grouped Data)

3. Population Variance (Ungrouped Data)

 GEMMW01X: Mathematics in the Modern World
Bachelor of Science in Accountancy
3rd Semester, A.Y 2022-2023

Lesson 6A: Mathematics of Finance

Interest 3. A = P (1 + rt)

• When you borrow money from someone or Where:

use somebody else’s money, you have to
A – Total Amount
pay a service charge to him/her
• This amount is paid back to the lender along P – Principal
with the original amount borrowed
• This is sometimes known as the Cost of r – Annual Interest Rate
Money, which doesn’t belong to you but
t – Time (in year/s)
you have used it

Interest – the extra amount

Principal or Capital – the original amount

borrowed

Amount – the sum of both principal and the

interest

Simple Interest

• Simple interest is the interest charge on a

loan

Interest Calculation:

1. Rate of Interest (RI or RoI), expressed in

Percent per Year
2. Time Period, expressed in Years or Compound Interest
Months or Days
3. The principal on which the interest is to • Compound interest, or “interest on interest”
be calculated by adding is calculated using the compound interest
formula
Formulas: • The basic idea is that after the first interest
period, the amount of interest is added to
1. A= P+I
the principal amount and then the interest
Where: is computed on this higher principal
• The latest computed interest is then added
P – Principal to the increased principal and then interest
A – Amount is calculated again. This process is
completed over a certain number of
I – Simple Interest compounding periods
• The result is a much faster growth of money
2. I = P * r * t (i=Prt)
than simple interest would yield
Where:
Compounding frequency – is the time period
I – Simple Interest after which the interest will be calculated on top
of the initial amount. For example:
P – Principal
• Annual (1 per Year) - compounding has a
r – Interest Rate per annum (p.a.); in compounding frequency of one
decimal • Quarterly (4 per Year) – compounding has a
compounding frequency of four
t – Time Period (in year/s)
• Monthly (12 per Year) – compounding has a
compounding frequency of twelve
 GEMMW01X: Mathematics in the Modern World
Bachelor of Science in Accountancy
3rd Semester, A.Y 2022-2023

Formulas:

1. A = P (1 + r) n

Where:

A – Final Amount in Compound Interest

P – Principal Investment Amount (initial

deposit or loan amount)

r – Annual Interest Rate

n – Number of times interest applied

per year (compounding frequency)

2. A = P (1 + r/n) nt

Where:

A – Future Amount of the

investment/loan, including interest

P – Principal Investment Amount (initial

deposit or loan amount)

r – Annual Interest Rate

n – Number of times interest applied

per time period (compounding frequency)

t – Number of time periods elapsed

3. Principal = A / (1+r/n) nt
 GEMMW01X: Mathematics in the Modern World
Bachelor of Science in Accountancy
3rd Semester, A.Y 2022-2023

Lesson 6B: Mathematics of Finance entire

amount
Credit Card and Consumer Loans borrowed,
part of it,
Credit Card – provides a lot more flexibility in or none at
all
that you can decide how much you want to
borrow and how much you want to pay back
every month as long as you stay in your credit Characteristics of a credit card that distinguish
limit it from a consumer loan:

• A credit card is therefore more demanding • Interest on credit is usually higher than a
since you need to be in charge of your own consumer loan
spending and what you owe • Interest on credit cards is only paid on the
amount used, although there may be a
Consumer Loan – is a good alternative to a
minimum fee payable on the undrawn
credit card if you want predictability with your
balance
monthly expenses because it provides a set plan
• For credit card as the money as returned,
for your monthly downpayments which gives
more will become available, provided that
many a sense of security
the limit is not exceeded
1. Secured Consumer Loans – loans that • Unlike the consumer loan, the credit card is
are backed up by collateral (assets that usually renewed each year in order to allow
are used to cover the loan in the event the customer to continue to use this credit
that the borrow defaults) facility whenever necessary
o Secured loans generally grant the
Main characteristics of a consumer loan:
borrower greater amounts of
financing, a longer repayment • The transaction has a pre-determined life
period, and a lower charged interest span
rate • Once all the capital has been repaid through
o As the loan is backed by assets, the the payments of the installment (monthly,
risk faced by the lender is reduced quarterly, semi-annually, etc.), the operation
2. Unsecured consumer loans – are loans is concluded without the possibility of
that are not backed by collateral accessing more money unless a new loan is
o It generally grant the borrower a arranged
limited among of financing, a
• Interest is charged on the total amount of
shorter repayment period, and a
money borrowed
higher charged interest rate
• Loans have a longer term, usually in years
o As the loan is not backed by assets,
the lender faces increased risk About credit cards:

Benefit Difference in Difference • Offers no interest period between 30 to 52

Used in Finance
days
Mechanism
Credit Card The bank Used Provides all • You decide how much you want to pay
grants you repeatedly the money within a certain time frame
a “Loan = either for requested • The cards may give additional benefit such
free of regular in one go at
charge”, if purposes or the time it
discounts in stores, restaurants, online, and
you unexpected is issued other partner benefits
manage to expenditures
Consumer pay back The whole is The bank About consumer loans:
Loans the whole drawn once provides
amount and the • Good for someone who wants to borrow a
within a afterwards it customer one-time amount that you pay back
specified is paid back with an
interest-
following a set downpayment plan
amount of
free money, • Lower interest than credit card debt
period which can
be used as
required
using the
 GEMMW01X: Mathematics in the Modern World
Bachelor of Science in Accountancy
3rd Semester, A.Y 2022-2023

Types of Consumer Loans • Bonds do pay interest and it is certain one

will get their money back
1. Mortgages -used by consumers to finance
3. Mutual Funds – are open-ended
the purchase of a house
investments that are professionally
2. Credit cards – used by consumers to finance
managed and consist of a variety of
everyday purchases
investment instruments including
3. Auto Loans – used by consumers to finance
stocks, bonds, options, commodities,
the purchase of a vehicle
and money market securities
4. Student Loans – used by consumers to
• Diversification provides greater safety and
finance education
reduces risk
5. Personal Loans – used by consumers for
• Mutual funds are long-term investments
personal purposes
• Stocks may or may not pay interest and it is
Summary: A consumer loan is the best choice uncertain if one gets their money back
for a large purchases that you plan to pay down
Question: Do all investment offer a guaranteed
over a longer period of time, while a credit card
positive ROI?
is best for smaller purchases that can be paid
back relatively quick. Answer: No, although some investments are
more likely to have a positive return on
Stocks, Bonds, and Mutual Funds
investment. Investments do not guarantee a
• Investing – is purchasing a financial product positive ROI. However, some investments are
or other item of value with an expectation “safer” than others (lower risk)
of favorable returns
Question: How are risk and return related?
Purpose of Investing: To save money in order to
Answer: the greater the risk an investment may
improve financial well-being
lose money, the greater its potential to provide
• Return on Investment (ROI) – the rate of a positive substantial return. The inverse is also
revenues received for every money on true. The lower the risk an investment may lose
invested in an item or activity money, the lower its potential to provide a
positive substantial return
Note: ROI Rates vary with each investment
(Positive Roi means money is gained, Negative Factors that determine the degree of risk
ROI means money is lost) investors take:

Types of Investments: • Age: Investors with more time to invest can

tolerate the market going up and down
1. Stocks – is an instrument that signifies • Risk Tolerance: Comfort level of the investor
ownership in an corporation and to deal with the ups and down
represents claim on a share of a • Investment Goals: What the investor want
corporation’s assets and profits to achieve with the money and when
• Stocks are typically riskier and long-term
investments Investor Profiles
• Stocks may or may not pay interest and it is
• Very Conservative – seeks to maintain the
uncertain if one gets their money back
original value of the investments and is
2. Bonds – are interest-bearing certificate
prepared to accept lower returns for lower
used as a way for government or
risk
business to raise money
• Conservative – seeks relatively stable
• The bondholder lends money to the bond
returns and accepts some risk through a
issuer for a set amount of time and interest.
diversified portfolio
When the bonds are “sold” back to the
• Moderate – seeks higher medium-term
issuer, the interest earned is given to the
returns and accepts the possibility of
bondholder
negative returns over short periods
• Bonds are typically low-risk and good for
• Aggressive – seeks high long-term returns
short-term investments
and accept the higher possibility of
 GEMMW01X: Mathematics in the Modern World
Bachelor of Science in Accountancy
3rd Semester, A.Y 2022-2023

sustained negative returns over short

periods
• Very aggressive – seeks to maximize long
term returns and accepts the possibility of
greater volatility and short-term capital
losses

Summary: There are different types of

investments, and all have different ROI. The
greater the risk on an investment, the greater
the possibility of high returns and also negative
returns. The type of investment should align
with your investment profile.