Republic of the Philippines

Department of Education
REGION 02 (CAGAYAN VALLEY)
SCHOOLS DIVISION OFFICE OF ISABELA
Alibagu, City of Ilagan, Isabela 3300
www.deped-isabela.com.ph  (078) 323-0281/323-2015 isabela.depedro2@gmail.com

A DETAILED LESSON PLAN

IN BUSINESS FINANCE

I. OJECTIVES

A. Content Standards
The learners demonstrate an understanding of the basic concepts of risk and return, and the time value of
money.
B. Performance Standard
The learners shall be able to:
1. Distinguish simple and compound interest.
2. Solve exercises and problems in computing for the time value of money with the aid of present and
future value tables.
C. Learning Competencies
Calculate future value and present value of money. (ABM_BF12-IIIg-h-18)
D. Specific Objectives
At the end of a 60-min Lesson, students should be able to:
1. Define the concepts regarding the time value of money.
2. Compute the simple interest and compound interest.
3. Apply the concepts in real life scenarios
E. SUBJECT MATTER
Topic: Basic Long-Term Financial Concepts
References: Teaching Guide for SHS – Business Finance
Instructional Materials: Visual Aid, Chalk & Board, power point presentation
Strategies: Question and Answer ,Group and Individual Activities, Discussion
Skills to be Develop: Collaboration, Information literacy & Critical Thinking
Core Values: Responsibility & Accountability
Value Statement: “If payback comes, don’t assume you pay what you have got, but you
pay more than you have it.”

PROCEDURE
Teacher’s Activity Students’ activity

1. Customary Greetings
May we begin the lesson by
having a prayer. (All are praying)
Gema, will you lead us a prayer Good afternoon, Ma’am.
Good Afternoon Class! Thank You Ma’am
Please be seated.
2. Checking of Attendance
Attendance officer is there anyone
of you who is absent today? None Ma’am

A. ACTIVITY

1. Communicate learning objectives interest – the cost of holding money. It

• Ask the learners to define ‘interest’. is the amount charged by the lenders
 to the borrowers/ users of money, and
is usually paid at regular intervals.
2. Have the learners read the story
below.
One day, the Master was going on
a trip and decided to entrust his
wealth to three of his most trusted
servants. The wealth shall be
given to each servant based on
the Master’s assessment of their
talents. To his first servant, he
entrusted PHP500,000. To his
second servant, believing that he
can make wise choices as well, he
also gave an amount of
PHP500,000. Finally, he called on
his third servant and gave him
PHP500,000. The Master then
went on his journey and told the
servants he will not be back for a
long time. Since the first servant
was a very smart person, he
decided to invest the PHP500,000
given to him. He was very pleased
that he was quoted a long-term
investment for 5 years at 8% per
annum compounded annually,
and decided to invest the money
in that institution. The second
servant saw what the first servant
did and also decided to invest the
money. However, when given the
choice by the investment firm, he
did not understand simple and
compound interest. In the end, he
accepted the quote at 8% per
annum simple interest. The third
servant saw them and thought
that they were being too much of
a risk-taker and decided just to
keep the money locked in a vault
in his home.
The Master returned after 5 years.
He then called on the servants
and asked them what has become
of the wealth he had entrusted
them. The first servant presented
his PHP500,000 plus the interest
he earned worth PHP500,000 x
(1.08)5 – 500,000 = 234,664.04 .
The second servant presented his
PHP500,000 along with the
interest earned at 500,000 x .08 x
5 = 200,000 Lastly the third
servant returned his PHP500,000.

B. ANALYSIS

Ask the learners:

‘Which servant will make the Master
most pleased?’ Yes, Aliana

Very Good! How servant accumulated

the said amount. Yes, Rodelyn

Great! Servant 1 Ma’am

I think you have already a knowledge
about simple interest and compound
interest since you have already taken this
up in your General Mathematics. Am I She earned a compounded interest from his
right? investment Ma’am

Differentiate simple and compounded

interest.
You have all given a right answer! This Yes Ma’am!
shows that you have a good memory
C. ABSTRACTION
Elicit answer from the class
What is the formula in computing simple
interest?

Using the story above, will you please Answer of the Volunteer
compute the Interest. Interest = Principal x Rate x Time

What is you answer?

Very Good!
What then is the formula in computing 200,000.00 Ma’am
compounded interest?
Please write it on the board
Answer of the Volunteer
Using the story above, will you please
compute the Interest. Interest = (P x (1+r/m)(T*m)-P)
What is you answer?
234,664.04
Wonderful

D. APPLICATION (Group Activity)

Ask the learners to compute the

interest earned over the 5 year term with
PHP1,000,000 as principal and 4% using Answers:
the following compounding periods.
Annually, Semi-annually Quarterly Annually – 216,652.90
and Monthly Semi-Annually – 218,994.42
Monthly – 220,996.59
Post Activity:
Ask each group to make a conclusion
with regards to the computed interest
Note that with more compounding,
interest income can be higher as shown in
the illustrative example. Banks offer time Possible answer: The interest earned in semi-annual is
deposit products with different types of greater than the annual
 compounding, thus affecting the interest to
be earned.
Valuing
“Compound interest is the eight
wonder of the world. He who understands
it, earns it…he who doesn’t pays it – Albert
Einstein
“If payback comes, don’t assume you
pay what you have got, but you pay more
than you have it.”
ASSESSMENT
Problem solving:
1. You deposit PHP1,000 in your
bank account. If the bank pays 4%
simple interest, how much interest
will you accumulate in your
account after 10 years? What if Answer Key
the bank pays compound Simple Interest = 1000 x .04 x 10 = 400
interest? Compound Interest = 1000 x (1.0410) – 1000 = 480.24
2. Mario will be making a lump sum
payment of PHP1.6 million on the
condominium he is buying two
years from now. If he wants to set
aside funds from now and invest it
that will earn interest of 3%, net of Answer Key
taxes every year and this amount PHP1,600,000/(1.03)2 = 1,508,153.45
is compounded annually, how PHP1,600,000/(1.015)4 = 1,507,494.77
much does he need to invest
today? What if the interest is
compounded semi-annually, how
much does he need to invest
today?

E. AGREEMENT/ASSIGNMENT
So far, we have discussed about interest earned on investments. It is also important to look
at interest rates from the point of view of borrowers. For you to understand more of it, kindly bring
tomorrow a sample of loans and its amortization of payment.

Prepared by:
MARY JEAN T. SABADO
SHS Teacher II

Observed by:
BIENVENIDO F. VALDEZ JR
Assistant Secondary School Principal II
Observed by:
ANGELIC P. DE VERA, PhD.
Principal III