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### sampleproject_financial Maths.pptx

1. How will the knowledge of financial mathematics help manage my wealth? Shanveer
2. Overarching Inquiry Statement • Humans use logical mathematical processes to simplify, quantify and model scenarios in order to make reasoned financial decisions
3. Curiosities (To be completed by myself) • Factual: When can I retire with enough money? How much interests do I to pay for my house? What kind of job offers the most stability? • Conceptual • What is the most important financial math formula? • Is there a way to calculate the best method to finance my house? • Debatable • Can I create a bank to solve world poverty issues? How?
4. Review: Personalized Concept Map
5. Profit, revenue and loss • What is profit? • What is revenue? • What is loss
6. What is percentage profit, revenue and loss • What is percentage profit? • What is revenue? • What is percentage loss?
7. Product Cost Price Selling Price Profit Percentage Profit / Percentage Mark up Total Number of Products to be sold per month (Target) Total Earnin gs Total Profit Cappucino \$0.80 \$4.00 \$3.20 3.20 0.80 x 100 = 400% 400 400 x \$4 = \$1600 400 x \$3.20 = \$1280
8. XXXXXX Overheads Analysis: Decide on the opening hours of your store: 9am till 5pm  How many hours are you operating the café? 8hours  How many employees do you need for your shop? 4 employees  What positions are you offering? For example: Chef, Waitress, Cleaner, cashier  How much are you offering to pay them per hour? This will be answered later
9. Opening Hours Employee and job Rates per hour Wages per day Weekend penalty rates Percentage increase Total Wage bill
10. Investigation into Simple interest & Compound Interest
11. Simple Interest
12. What is simple interest? • Simple interest is an interest charge that borrowers pay lenders for a loan. It is calculated using the principal only. • Simple interest is calculated by multiplying loan principal by the interest rate and then by the term of a loan. • Simple interest can provide borrowers with a basic idea of a borrowing cost. • Auto loans and short-term personal loans are usually simple interest loans. • Simple interest involves no calculation of compound interest. • A benefit of simple interest over compound interest can be a lower borrowing cost.
13. Applications
14. Buying a car • Firstly, I went on Carsales.com.au to search up a car I wish to purchase. Then, I went on finder.com.au to look up the interest rates and considered purchasing the car, taking a loan over a couple of years.
15. First Goal in life (carsales.com.au) • Getting a car Principal (Original Cost) = \$83 490 rate = 6.24% (0.0624) Time = 7 years • Interest = Principal x rate x time = \$83 490 x 0.0624 x 7 = \$36468.432 Total amount payable = \$83 490 + \$36468.432 = \$119958.432 = \$119958.43 (to 2 dec pl) Monthly payment = \$119958.43 / 84 = \$1428.08 ( to 2 dec pl)
16. Extension: Depreciation • The term depreciation refers to an accounting method used to allocate the cost of a tangible or physical asset over its useful life.
17. Depreciation Calculations (Year 10)
18. Calculations • Fv = Future value (ending after 1 year older)= \$82 990 • Pv = Present value (starting at 2020) = \$83 490 • rate (r)= ?? • Number of years (n)= 1 • Fv = Pv (1 - r)n • 82990 = 83 490 (1-r)1 • 82990 = 83490 (1 - r) • 82990 = 83490 – 83490r • 82990 – 83490 = - 83490r • -500 = -83490 r • r = -500/-83490 • r = 0.0059884 • Percentage = 0.0059884 x100 = 0.59884% (Rate of depreciation)
19. Investment property
20. Second goal – A house (realestate.com.au)
21. Purchase a property • Pay a deposit: 10% of the total price • Price of the property: \$575 000 • Deposit = 0.10 x \$575 000= \$5750 • How much do I have to borrow? = 575 000 – 5750 = \$569 250 • Interest rate = 4.74% or 0.0474 (decimal)
22. Year Simple Interest 1 26982.45 2 53964.9 3 80947.35 4 107929.8 5 134912.25 6 161894.7 1 2 3 4 5 6 26982.45 53964.9 80947.35 107929.8 134912.25 161894.7 0 20000 40000 60000 80000 100000 120000 140000 160000 180000 1 2 3 4 5 6 Interests payable over time Year Simple Interest What do you notice about the growth of interests in this graph? Linear? Patterns? What is the x-axis? What is represented by the y-axis?
23. Third Goal – Being an AFL Player As a xxxxxx, I will be investing 10% of my annual pay. This amount will grow exponentially over 30 years. The total amount at the end of the period will be…
24. Investing in Superannuation \$- \$10,000.00 \$20,000.00 \$30,000.00 \$40,000.00 \$50,000.00 \$60,000.00 \$70,000.00 0 5 10 15 20 25 30 35 Mikki's Investment over 30 years (Compound Interest) Year Principal Interest EOY Principal 1 \$ 10,200.00 \$ 650.76 \$ 10,850.76 2 \$ 10,850.76 \$ 692.28 \$ 11,543.04 3 \$ 11,543.04 \$ 736.45 \$ 12,279.48 4 \$ 12,279.48 \$ 783.43 \$ 13,062.92 5 \$ 13,062.92 \$ 833.41 \$ 13,896.33 6 \$ 13,896.33 \$ 886.59 \$ 14,782.92 7 \$ 14,782.92 \$ 943.15 \$ 15,726.07 8 \$ 15,726.07 \$ 1,003.32 \$ 16,729.39 9 \$ 16,729.39 \$ 1,067.33 \$ 17,796.72 10 \$ 17,796.72 \$ 1,135.43 \$ 18,932.15 11 \$ 18,932.15 \$ 1,207.87 \$ 20,140.03 12 \$ 20,140.03 \$ 1,284.93 \$ 21,424.96 13 \$ 21,424.96 \$ 1,366.91 \$ 22,791.87 14 \$ 22,791.87 \$ 1,454.12 \$ 24,245.99 15 \$ 24,245.99 \$ 1,546.89 \$ 25,792.89 16 \$ 25,792.89 \$ 1,645.59 \$ 27,438.47 17 \$ 27,438.47 \$ 1,750.57 \$ 29,189.05 18 \$ 29,189.05 \$ 1,862.26 \$ 31,051.31 19 \$ 31,051.31 \$ 1,981.07 \$ 33,032.38 20 \$ 33,032.38 \$ 2,107.47 \$ 35,139.85 21 \$ 35,139.85 \$ 2,241.92 \$ 37,381.77 22 \$ 37,381.77 \$ 2,384.96 \$ 39,766.73
25. Fourth Goal – Business (Commercialrealestate.com.au) • In this project, I am interested to venture into…… • There are 2 categories in businesses, pragmatic and love. • I love to sell…. • In the pragmatic view, I would want to sell…..
26. Reducible interests
27. Reducible interest rate loan Principal Amount = \$5000 Agreed Annual Payment = \$1850 Reducible Interest Rate = 12% per annum
28. Full Settlement • 4th Year Payment = \$782 + \$93.84 = \$875.84
29. Reflection (Lesh’s translation model)
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