Summary
Summary Grade 11 Financial Mathematics
- Course
- Institution
Summary of basic Grade 11 Financial Maths . Includes some examples. Interest , Depreciation and nominal/effective rates.
[Show more]
Seller
Follow
monicatakawira
Reviews received
Content preview
SIMPLE?Subject: Mathematics. INTEREST CALCULATED ON ORIGINAL
AMOUNT.
COMPOUND?
CALCULATED ON THE AMOUNT WITH
INTEREST. ‘INTEREST ON INTEREST’
Topic: Financial Mathematics.
BASIC CONCEPTS:
1. INTEREST
- COMPOUND INTEREST.
- SIMPLE INTEREST.
2. DEPRECIATION
- LINEAR DEPRECIATION.
- REDUCING BALANCE DEPRECIATION.
3. NOMINAL AND ANNUAL EFFECTIVE RATES.
1. Interest:
Rules to live by:
- Simple interest is for simple people.
- When we are not told which particular interest to use, use COMPOUND interest.
***Note: The formula to find P when given A is as follows:
PA(1i)n
Simple Interest Formula
A= P x i x n
A= final amount
P= principal / initial amount
I= interest rate
- Different compounding periods:
N= Number1. of years invested.
Annually. – once a year. (n and i don’t change)
2. Semi-annually. – every six months. (divide i by 2 and multiply n by 2)
3. Quarterly. – 4 times a year. (divide i by 4 and multiply n by 4)
, 4. Monthly. – every month. (divide i by 12 and multiply n by 12.)
Example:
(on White Board)
2. Depreciation:
? - an item losing value over a period of time.
- Linear depreciation. (SIMPLE)
AP(1i.n)
- Reducing balance depreciation.
AP(1i)n
3. Nominal and Annual Effective Rates.
You need to know the formula off by heart.
Nominal rate ? Does take the compounding period into account and is therefore
more accurate.
Effective rate? Does not take the compounding period into account. (NOT AS
ACCURATE)
Examples:
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller monicatakawira. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $5.06. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
53340 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now