I’ve always wondered why would one be very good with mathematics but be unable to understand financial maths. Money ranging from R1 000.00 to R100 000.00 may easily be manipulated through financial maths formulas as this is only a matter of understanding the statement related to finance and being able to fully understand what the problem is regarding the money involved in the scenario.
Remember that financial maths formulas are there for a reason mainly to solve money related problems. Obviously in financial maths you will normally encounter terms such as interests rates being earned by probably R10 000.00 invested over a certain period of time whereby it accumulates interests over a period of time which can be calculated to check by how much the profit will be when the invested money matures over that period of that which is normally in months or years.
Not only does the money appreciate in value, but it may also depreciate in value to such an extend where in ten years time R70 000.00 may not be enough to buy the same item of similar quality. And again just like a car, regardless of the make of the car, Mazda 3, Toyota Corolla or any latest model of the car, depreciate in value over a period of time.
As far as financial mathematics is concerned, there’s a term called inflation rate which is normally being spoken about especially when it comes economy of the country because a lot of products in terms costs are dependent on the inflation rate. This rates has influence on the sale of fuel, bread and many other things which we consume or need almost on a daily basis.
It is questionable that can the influence of this inflation rate be altered such that it makes the prices remain or go down by making use of financial maths equations or formulas? Well, it depends in which grade you are because the are lots of formulas and you might find that at lower grades there are no formulas to deal or perform such calculations.
Financial maths is really an interesting chapter in mathematics where it trains you financially so to become an adult who’s aware of what money can buy and where you can make good investments with your money buy obviously choosing a bank suitable for you. We do have banks like Capitec Bank or ABSA bank where you can make investments.
Also, remember that in every field there are special formulas which are being used to determine many things and most of those formulas are simply based on the basic financial maths equation which are being used at lower grades by learners, students and educators.
The tricky part about financial maths is the fact that there’s no room for mistake because you’re dealing with numbers and sometimes it could be very big numbers where you can’t afford to miss even just a simple zero. Almost every number is very very much important and must be taken into consideration when performing any financial related maths equations.
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