This is part of the HSC Mathematics Advanced course under the topic of Financial Mathematics: Modelling investments and loans.
In this post, we will solve compound interest problems involving financial decisions, including but not limited to a home loan, a savings account, a car loan or superannuation:
- Identify an annuity (present or future value) as an investment account with regular, equal contributions and interest compounding at the end of each period, or a single-sum investment from which regular, equal withdrawals are made
- Use technology to model an annuity as a recurrence relation and investigate (numerically or graphically) the effect of varying the interest rate or the amount and frequency of each contribution or withdrawal on the duration and/or future or present value of the annuity
- Use a table of future value interest factors to perform annuity calculations, eg calculating the future value of an annuity, the contribution amount required to achieve a given future value or the single sum that would produce the same future value as a given annuity
Compound Interest – Easy Example + Practice
Compound Interest Formula Explained, Investment, Monthly & Continuously, Word Problems, Algebra
Word Problems with Compound Interest
Eddie Woo: Compound Interest (1 of 2: Developing the formula)
Compound Interest (2 of 2: Example questions)
