Year 12: Financial Mathematics

2 dot points across 2 inquiry questions, in syllabus order. Each dot point has a focused answer, with exam-style questions and worked answers where available.

MS-F3 Depreciation and Loans: how do assets lose value, and how do credit cards and reducing balance loans work?

Calculate the depreciation of an asset using the straight-line and declining-balance methods, calculate interest, closing balance and minimum payment on a credit card statement, and investigate reducing balance loans using tables, spreadsheets and online calculators

Straight-line depreciation and declining-balance depreciation (the compound interest formula with a negative rate), reading and calculating a credit card statement (interest, closing balance, minimum payment), and how reducing balance loan tables and spreadsheets show interest, repayments and the balance owing.

9 min read →

MS-F2 Investment: how can the value of different investments, including shares, be calculated and compared over time?

Calculate and compare the value of different types of investments over time, including simple interest, compound interest (future value and present value, with interest rates other than per annum), the effect of inflation, and investing in shares (dividends and dividend yield)

How to calculate simple interest, compound interest with the future value formula FV = PV(1 + r)^n (including monthly, quarterly and half-yearly compounding), present value, inflation's effect on prices, and share investments with dividends and dividend yield, and compare investment options.

8 min read →