← Maths Advanced syllabus

NSWMaths Advanced

Year 12: Financial Mathematics

4 dot points across 4 inquiry questions. Click any dot point for a focused answer with worked past exam questions where available.

How do equal regular contributions to an investment grow over time, and what is the future value formula for an annuity?

Derive and use the future value formula for an annuity to find the accumulated value of a series of equal regular contributions
A focused answer to the HSC Maths Advanced dot point on the future value of an annuity. Derive the formula as a geometric series, apply it to regular savings, and solve for the required contribution or number of periods, with worked examples.
9 min answer →

How do geometric sequences and series model repeated payments and recurring growth, and when does an infinite series converge?

Use the formulas for the nth term and the sum of n terms of a geometric sequence, and the limiting sum, in financial contexts
A focused answer to the HSC Maths Advanced dot point on geometric sequences and series in finance. The general term, finite sum, limiting sum and the convergence condition, applied to repeated deposits, depreciation and perpetuities, with worked examples.
9 min answer →

How are reducing-balance loan repayments calculated, and how much of each payment goes to interest versus principal?

Use recurrence relations and the present value of an annuity to find loan repayments, outstanding balances and total interest paid
A focused answer to the HSC Maths Advanced dot point on loan repayments. Recurrence model for the outstanding balance, closed-form for the repayment via the present value of an annuity, splitting payments into interest and principal, and total interest, with worked examples.
10 min answer →

How do simple and compound interest accumulate value over time, and how do we move money between present and future?

Use simple and compound interest formulas to find future values, present values, interest rates and time periods
A focused answer to the HSC Maths Advanced dot point on simple and compound interest. The two formulas, conversion between annual and per-period rates, present and future value calculations, and the effect of compounding frequency, with worked examples.
9 min answer →