Financial Mathematics B

Financial mathematics B | NSW Curriculum Website

MA5-FIN-C-02 solves financial problems involving compound interest and depreciation

📖 Prior Knowledge

Content	Prior knowledge	Used for
Indices	- powers as repeated multiplication	- future value and depreciation formulas
Linear Relationships	- linear graphs	- simple interest graphs
Financial Mathematics A	- simple interest	- comparing simple and compound interest

Examine compound interest for up to 3 time periods using repetition of the formula for simple interest
Associate the calculation of the total value of a compound interest investment with repeated multiplication, using digital tools
Establish and use the formula $F V = P V (1 + r)^{n}$ to find compound interest where $F V$ = future value of the investment, $P V$ = present value of the investment, $r$ = interest rate per time period and $n$ = number of time periods
Solve problems involving compound interest
Compare simple interest with compound interest in practical situations
Use the compound interest formula to establish the depreciation formula $S = V_{0} (1 - r)^{n}$ where $S$ = salvage value, $V_{0}$ = initial value of the asset, $r$ = depreciation rate per time period and $n$ = number of periods
Solve problems involving the depreciation of an asset