Your Practice Paper – Applications and Interpretation HL for IBDP Mathematics
u S � �
1� r : The sum to infinity of a geometric sequence u n
, given that �1� r � 1
�
1
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Financial Mathematics
� Compound Interest :
PV : Present value r %: Interest rate per annum ( per year ) n : Number of years k : Number of compounded periods in one year kn
� r � FV �PV
�1�
� : Future value
� 100 k � I �FV � PV : Interest
� Inflation : i % : Inflation rate R % : Interest rate compounded yearly ( R� i)%
: Real rate
� Annuity :
1 . Payments at the beginning of each year
2 . Payments at the end of each year
� Amortization :
1 . Payments at the beginning of each year
2 . Payments at the end of each year
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