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# The math of financial literacy

This is to share my advocacy as an Engineer of Financial Literacy. Financial Literacy is a topic that is very important to life.

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### The math of financial literacy

1. 1. The Math of Financial Literacy By: Engr. Edgar Caburatan Carrillo II, ChE Master of Science in Mechanical Engineering De La Salle University Manila, Philippines
2. 2. Flow of Discussion 1.Brief Introduction 2. Three wealth creation strategy 3. Comparison and Analysis of Strategies 4. Conclusion
3. 3. Brief Introduction Engr. Edgar Caburatan Carrillo II
4. 4. 3 Wealth Creation Strategy 1. Simple Interest 2. Compound Interest 3. EC Wealth Model (1 ) FV  PV  i  Y FV n FV FV FV i Y n n s 365 Y D x 12 (1 ) 1 1 1  s s Y s S m x s      
5. 5. Simple Interest P= Php 50,000 i=10% n=40 years FV= Pin + P FV= 50,000*.1*40 + 50,000 FV= Php 250,000 Dividend: Php 5,000/year Monthly: Php 416.67/month
6. 6. Compound Interest P= Php 50,000 i=10% n=40 years FV= P(1+i)^n FV= 50,000(1+.1)^40 FV= Php 2.26 M Dividend: 226,296.30 Monthly: 18,858.02
7. 7. EC Wealth Model P= Php 50,000 Ds= P 3.33/day I=10% Sm= 33.33x 30=1000 n=40 years Ys= 1000*12= 12,000 FV1= P(1+i)+ Ys FV1= 50,000(1+.1)+12,000= 67,000 FV2= 67,000(1.1)+12,000=87,000 Fvn= P 7.57 M Dividend: 757,407.30/year Monthly: 63,117.28/month
8. 8. Analysis of Wealth Creation model Inflation: Food= 50*3=150/day*30= 4,500 Cost of Food each month in 2014= Php 4,500 Cost of Food each month after 40 years: FV=PV(1+i)^n= 4,500(1+.05)^40= 31,679.95 1. Simple Interest Php= 416.67 (You will not survive) 2. Compound Interest Php= 18,858.02(You will not survive) 3. EC Wealth Model Php= 63,117.28(You will survive)
9. 9. Conclusion The three wealth Creation model can grow your wealth but among the three, EC Wealth Model was proven to be the most efficient way producing massive wealth. The EC Wealth Model can only be implemented if Disciple, hardwork and consistent monthly savings will be done. This is to secure your retirement, securing your future and the future of your children's children.
10. 10. Thank You For Listening and Start Saving Now!