Gen Math Q2 Module 11, Lecture notes of Mathematics

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CO_Q 2 _General Mathematics SHS

General Mathematics

Quarter 2 – Module 11:

Business and Consumer Loans

General Mathematics Alternative Delivery Mode Quarter 2 – Module 11: Business and Consumer Loans First Edition, 2020

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Reviewers: Jerry Punongbayan, Diosmar O. Fernandez, Dexter M. Valle, Jerome

A. Chavez, Jea Airee Carimae M. De Mesa, Dr. Anicia J. Villaruel, Marilou M. Tierra and Moahna Aura M. Mancenido Illustrator: Hanna Lorraine Luna, Diane C. Jupiter and Michael A. Alonzo Layout Artist: Roy O. Natividad, Sayre M. Dialola and Noel Rey T. Estuita Management Team: Francis Cesar B. Bringas Job S. Zape, Jr. Ramonito Elumbaring Reicon C. Condes Elaine T. Balaogan Fe M. Ong-ongowan Hermogenes M. Panganiban Phillip B. Gallendez Josephine T. Natividad Anicia J. Villaruel Dexter M. Valle

Introductory Message

This Self-Learning Module (SLM) is prepared so that you, our dear learners, can continue your studies and learn while at home. Activities, questions, directions, exercises, and discussions are carefully stated for you to understand each lesson.

Each SLM is composed of different parts. Each part shall guide you step-by- step as you discover and understand the lesson prepared for you.

Pre-tests are provided to measure your prior knowledge on lessons in each SLM. This will tell you if you need to proceed on completing this module or if you need to ask your facilitator or your teacher’s assistance for better understanding of the lesson. At the end of each module, you need to answer the post-test to self-check your learning. Answer keys are provided for each activity and test. We trust that you will be honest in using these.

In addition to the material in the main text, Notes to the Teacher are also provided to our facilitators and parents for strategies and reminders on how they can best help you on your home-based learning.

Please use this module with care. Do not put unnecessary marks on any part of this SLM. Use a separate sheet of paper in answering the exercises and tests. And read the instructions carefully before performing each task.

If you have any questions in using this SLM or any difficulty in answering the tasks in this module, do not hesitate to consult your teacher or facilitator.

Thank you.

1 CO_Q 2 _General Mathematics SHS

Previously, you have learned about the difference between stocks and bonds. We said that stocks are the ownership shares you buy from a company while bonds are a form of long-term investment issued by a corporation or government where the purchaser becomes a creditor of the company. You now also have the background on how to describe different markets for stocks and bonds as well as the skills in analyzing different market indices for stocks and bonds.

Now, you are about to begin another module in General Mathematics. This module was designed and was written with you in mind. It is here to help you learn the concepts of business loans and consumer loans. The scope of this module permits it to be used in many different learning situations. The language used recognizes the diverse vocabulary level of students. The lessons are arranged to follow the standard sequence of the course. But the order in which you read them can be changed to correspond with the textbook you are now using.

Are you ready for the new lesson? Fasten your seatbelt and focus on the world business and consumer loans.

After going through this module, you are expected to:

1. define loan and its related terms;
2. illustrate business loan and consumer loan; and
3. distinguish business loan from consumer loan.

What I Need to

3 CO_Q 2 _General Mathematics SHS

4. Which of the following is money lent to an individual for personal or family

purposes?

a. business loan

b. collateral

c. consumer loan

d. mortgage

5. What do you call a person who guarantees to pay for someone else’s

financial obligation if the borrower fails to do so?

a. amortization

b. collateral

c. guarantor

d. mortgage

6. Which of the following is not an example of a business loan?

a. cash flow loans b. credit cards

c. invoice financing

d. micro loans

7. Which of the following is not an example of a consumer loan?

a. asset-based financing

b. car loans

c. mortgages

d. student loans

8. Which of the following statements about the interest rate of consumer and

business loans are correct?

a. The business loan has higher interest than a consumer loan.

b. Consumer loan has a higher interest rate than a business loan.

c. Consumer loan and business loan are always equal in interest rates.

d. The business loan has no interest rate, unlike consumer loan.

4 CO_Q 2 _General Mathematics SHS

9. Which of the following statements about terms of payment for consumer

and business loans are correct?

a. The business loan has a longer term of payment than a consumer

loan.

b. Consumer loan has a longer term of payment than a business loan.

c. Consumer and business loans are always equal in terms of payment. d. Consumer loan has no specific term of payment, unlike a business

loan.

10. Which of the following is not a required document if you are applying for

a business loan.

a. certificate of employment

b. company’s financial statement

c. credit report

d. income tax return

For 11-15. Identify the following situations and write a if it is a business loan, b if the situation is a consumer loan, c if the situation is both a business loan and a consumer loan, or d if the situation is neither a business loan nor a consumer loan.

______11. Mr. Tuazon wants to have another branch of his car repair shop. He decided to apply for a loan that he can use to pay for the rentals of the new branch.

______12. Mrs. Morales runs a trucking business. She wants to buy four more trucks for the expansion of her business. She applied for a loan in a bank worth ₱5,000,000.

______13. Margarita decided to take her family for a vacation. To cover the expenses, she decided to apply for a loan.

______14. John Rey decided to purchase a condominium unit near his workplace. He got a loan worth ₱ 3 ,000,000.

______15. Mr. Malonzo renovated his house for ₱ 10 0,000.00 This was made possible because of an approved loan worth ₱ 8 5,000.

6 CO_Q 2 _General Mathematics SHS

Activity:

Directions. The following statements describe the basic terms related to the topic of this module that you are most likely familiar with. Rearrange the jumbled letters to reveal the answer. Write your answer in the given space.

_________1. It is a financial obligation of paying someone a certain amount for

the use of his or her money. (ONAL)

_________2. It is the amount paid to borrow money (STEINERT)

_________ 3. It is the amount of money that the loan applicant requests to

borrow. (ALPNIRICP)

_________4. It is the payment or interest level used to determine a borrower's

monthly payment. (TEAR)

_________5. It is the maturity or length of time over which a loan extends, for

instance one year, five years, or more. (EMRT)

7 CO_Q 2 _General Mathematics SHS

Read the story of two best friends, analyze their situation, and try to answer the questions below.

What’s New

Best Friends Forever

Bessy and Conny are childhood best friends since elementary. Even their parents are also friends and treat each other as family. The two girls went to same school up to college but with different courses. Conny took up Architecture while Bessy got into Business Administration. But even though they were not in the same college, they see to it that they still have time to each other especially at times that they need someone to lean on and a shoulder to cry on. Because of their dedication, hard work and innate intelligence, there is no doubt that both of them graduated as Cum Laude. Bessy and Conny have big dreams. They are dreaming not only for themselves but for their family. The Filipino culture of close family ties was very evident among them. One day, after graduation Bessy and Conny talk to each other and discuss their plans. “Hi sister, how are you today” Bessy said. “I’m good sister, how about you? Conny asked. “I’m also fine sis” Bessy said. “So, what’s our plan sis? Now that we graduated from college, it’s our turn to help our family”, Conny said. “Yeah, I am planning to expand our family business so that I could practice my degree at the same time I could help my parents” Bessy said. “That’s a good plan. I also want to practice my degree in Architecture. That’s why I want to build a new house for my family. I want to give my parents their dream house” Conny replied. “We really have big dreams sis, but we are just starting, how can we do that?” Bessy asked. “Well, my uncle is working at North-South bank and they offer loans that we can pay while working with our plans.” Conny explained. “I think that is a good idea sis. We will be working hard to make a good payment for that loan at the same time we could start with what we are dreaming of.” Bessy said.

9 CO_Q 2 _General Mathematics SHS

The story of Bessy and Conny aside from it’s a story of best friends, it is also a story of two different kinds of loans - the business loan and consumer loan. A business loan is what Bessy applied for. A business loan is money lent specifically for a business purpose. It may be used to start a business or to have a business expansion. The business loan includes microloans, invoice financing, mezzanine financing, bank loans, asset-based financing, cash flow loans, as well as business cash advances. On the other hand, Conny applied for a consumer loan which is money lent to an individual for personal or family purposes. Consumer loan includes credit cards, mortgages, home equity lines of credit, refinances, auto loans, student loans, as well as personal loans. While reading the story, you also encountered the following terms:

• 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
• Guarantor – a person who guarantees to pay for someone else’s financial obligation if the borrowers fail to do so.

Business Loan versus Consumer Loan

Term of Reference

Business Loan Consumer Loan

Collateral May require collateral (real estate, other investment, equipment, fixtures or furniture)

May also require a collateral

Guarantor Require the business owner to sign as guarantor

Does not usually require a guarantor Documents The lendee has to submit a credit report, income tax returns and the company's financial statement.

The lendee may require a credit report, bank statements, and income tax return. If he/she is employed, a certificate of employment and employee pay slips will be submitted. Term of the Loan Shorter-term Longer-Term Interest rate Higher interest Lower interest rate

What is It

10 CO_Q 2 _General Mathematics SHS

Examples:

1. Andrea, a hardworking transwoman who recently finished her short course on hair and makeup is planning to put up her small salon. She was advised by her friends to apply for a bank loan. Which loan will she apply? A business loan or a consumer loan? Answer: Andrea needs a business loan since she is planning to use the

money to start her salon business.

2. Mr. Zion is an environmentalist who is planning to conduct a mangrove planting at Brgy. Barra. He wants to cover all the expenses for this activity, but he realized that his money is not enough. Hence, he needs to borrow money to finance his advocacy. Is he going to apply for a business loan or a consumer loan?

Answer: Mr. Zion will apply for a consumer loan since the money that he

will borrow is for the finances of his activity.

12 CO_Q 2 _General Mathematics SHS

5. Mr. Santiago owns the Kakanin food cart business. He wants to put another food cart on a new mall in Tayabas City. He decided to have a loan amounting to ₱100,000.00 to establish the new business. Answer: __________________
6. In preparation for the online learning of her children due to the COVID- pandemic, Mrs. Castro decided to buy laptops for them and got an internet connection. But because of short in budget, she needed to borrow money amounting to ₱80,000.00 for this school preparation. Answer: __________________
7. Instead of working as a Manager in a certain company, Mr. De Guzman decided to leave his job and put up an internet cafe instead. To finance his business, he borrowed money from a Kabayan Bank. Answer: __________________
8. Because Anna believed that Filipinos are truly honest, she decided to put up an Honesty Bookstore in front of Excellence National High School. Everyone can get what they need and pay for it without anyone in the cashier. But before she can own this shop, she borrowed ₱1,000,000. from the bank to finance the expenses in putting up this bookstore. Answer: __________________
9. Yzzyr excelled in Science and even won various competitions relative to Applied Science. At the back of her achievements are her supportive parents. Before she invented the COVID-19 scanning robot, her parents need to finance her project with a big amount. To help her, they even borrowed money from the bank just for her to finish her invention. Answer: __________________
10. Xandria really loves her family. They supported her in all her endeavors. As return of gratitude, she promised them that they will make a tour to great places in the world. To realize her promise, and to help her finance their tour, she applied for a personal loan amounting to ₱200,000.00 to Bank XY. Answer: __________________

13 CO_Q 2 _General Mathematics SHS

Business Loan

A. Directions. Using your own words, please complete the following statements to reveal what you have learned to the topic. Write your answers on the given space.

1. Business loan is a money

   ---

   _____________________________________________________________________.
2. Consumer loan is intended for

---

_____________________________________________________________________.

3. Collateral is

---

_____________________________________________________________________.

4. Guarantor is the person

---

_____________________________________________________________________.

5. Term of loan is about __________________________________________________. B. Directions. Using the Venn Diagram, write words or statements that will compare business from consumer loans.

What I Have Learned

Consumer Loan

15 CO_Q 2 _General Mathematics SHS

Short Story

Category

Very Good (16–20)

Good (11–15)

Fair (6–10)

Needs Improvement (1–5)

Content: Originality of ideas; Appropriateness of the ideas of business and consumer loans; Development of characters and plot Other points of interest, e.g. use of dialogue, point of view, irony, symbolism, theme Organization: Plot structure, e.g. orientation, complication, climax, resolution; Coherence and cohesion of ideas; Paragraphing; Other points of interest, e.g. flashback, story within a story, transitions, twist

Language and style: Range and appropriateness of vocabulary;  Range and accuracy of grammar structures; Accuracy of spelling, capitalization, punctuation; Appropriateness of tone and register ; Use of narrative writing techniques, e.g. varying short and long sentences, appealing to the five senses, withholding details to create suspense; Use of literary devices, e.g. alliteration, onomatopoeia, simile, metaphor, personification

Jingle/Rap Making 4 3 2 1 Lyrics The lyrics are catchy and he/she discusses the concepts of business and consumer

The lyrics are catchy and he/she discusses the concepts of business and consumer loans well.

The lyrics are somewhat catchy and he/she discusses some the concepts of business and

The lyrics are not catchy and lack the discussion of the concepts of business

16 CO_Q 2 _General Mathematics SHS

loans well and complete.

consumer loans.

and consumer loans. Melody Contains 3 or more qualities of an effective jingle/rap: short, catchy, simple or repetitive.

Contains 2 qualities of an effective jingle/rap: short, catchy, simple or repetitive.

Contains 1 quality of an effective jingle/rap: short, catchy, simple or repetitive.

Lack of qualities of an effective jingle/rap: short, catchy, simple or repetitive.

Presentation Excellent creativity; very well through out

Some creativity; most parts appeared to have been well throughout.

Little creativity; few parts appeared to be well throughout.

Lacks creativity; not well through out

Directions. Choose the letter of the best answer and write it on a separate sheet of paper.

1. What do you call the loan that intends to spend for personal, family or household purposes?

a. business loan

b. collateral

c. consumer loan

d. mortgage

Assessment