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Chapter 15: Financial Mathematics

Chapter 15: Financial Mathematics. A. Serra. A. Foreign Exchange. Class work: Simple currency conversion. Eg . 15A.1ai Commission on currency exchange. E.g. 15A.2.4a Fixed commission e.g. 15A.3.2a Individual work: Examples 1,2,3,4,5 & 6: Do them & check your answers. Exercise 15A.1: 1,3

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Chapter 15: Financial Mathematics

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  1. Chapter 15:Financial Mathematics A. Serra

  2. A. Foreign Exchange. Class work: Simple currency conversion. Eg. 15A.1ai Commission on currency exchange. E.g. 15A.2.4a Fixed commission e.g. 15A.3.2a Individual work: • Examples 1,2,3,4,5 & 6: Do them & check your answers. • Exercise 15A.1: 1,3 • Exercise 15A.2: 1,5 • Exercise 15A.3: 1 • Extra: Even number exercises in 15A

  3. B. Simple Interest. CLASS WORK Use the formula I=Crn/100 and simple algebra to do exercise 10 in page 465. INDIVIDUAL WORK • Examples 8,9,10 and 11: Do them & check your answer. • Exercises 15B.1: 1,3,5,7 & 9 (odd numbers) • Extra: Exercise 15B.1 even numbers.

  4. C. Compound interest.NB: Very important section (VIS) CLASS WORK Do exercise 10 in page 465 again considering that the interest is added to the capital each period. Use formula in page 469 ( A=C (1+r/100)^n) to find the result. Link with geometric series. Different compounding periods. Using a graphing calculator…. INDIVIDUAL WORK • Examples 13,14,15&16: Do them & check your answer. • Video1: Understanding compound interest • Exercise 15C1: 1,3 • Video2: Compound interest in Excel • Exercise 15C2: 1,3 • Exercise 15C3: 1,5 • Video3: Using TI to solve compound interest problems. • Exercise 15C4: 1,7 • Extra: Exercise 15C1,2,3,4 even numbers. • Extra. Investigation 1 page 470. (Project?)

  5. D. Depreciation. CLASS WORK Depreciation as the loss in value of an item over time. Use example in page 478 and compare it with compound interest ….same formula  NB. Also the same TI method with negative values for I% INDIVIDUAL WORK • Examples 24 & 25: Do them & check your answer. • Exercise 15D: 3,5 • Extra: Exercise 15D: Even numbers • N.B. Please remember to work on previous section and/or your project if you have time.

  6. E. Personal Loans. CLASS WORK I need to buy a paraglider.. N= 60 (I pay every month during 5 years), I= 9%, PV=5000chf, PMT=?, FV=0 , P/Y=12, C/Y=12, PMT=END. Use table in page 481 and/or TI-83. INDIVIDUAL WORK • Example 26: Do it & check your answer. • Exercises 15E: 1,3 • Extra: 15E: 2,4 • Extra. Investigation 2 page 483. (Project?)

  7. F. Inflation (Extra?) CLASS WORK Discuss: What happens if I buy my paraglider in 5 years?..... INDIVIDUAL WORK • Example 27 (do & check) • Exercise 15F1: 1,3 • Extra: Exercise 15F1: 2,4.

  8. Review • INDIVIDUAL WORK • Review Set 15A. (Do & check answers) • Extra: Review Set 15B • NEXT • Mock Test & End of Unit 15 test…. Remember to send me your results. • Good luck 

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