Apps. and Interpretation HL Practice Paper Book | Page 20

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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