Financial mathematics.
Financial mathematics: simple versus compound growth, compound interest, depreciation.
Work through the topic
Learn the method, follow the examples, then try the worksheet.
- 01
Simple versus compound growth
Compare fixed additive interest with multiplication of the current balance. All amounts here are Australian dollars.
- 02
Compound interest
Match the rate and exponent to the compounding period, then distinguish the balance from the interest.
- 03
Depreciation
Distinguish a fixed annual loss from a repeated percentage loss of current value.
- 04
Repeated percentage change
Combine percentage changes with multiplication and undo a change with division.
- 05
Savings/loan scenarios with supplied models
Apply supplied saving and loan recurrences with explicit interest and payment timing.
- 06
Changing assumptions and checking results
Check fees, assumptions and rounding before interpreting a modelled financial result.
- 07
Spreadsheets/digital models
Build a transparent financial spreadsheet-style table and verify it by hand.
Topic review
Revisit the key ideas, then choose a practice paper.