Money questions in the maths exam!

[nickglyn]

Hey guys. So these have to be one of the biggest killers in the exam, despite the last question. Stupid time payments questions and annuities!

Typically part i) and ii) are pretty simple, but it's always the third part that I have trouble with, it usually being a question where an extra amount is added after like half the time of the repayment and it muddles everything up.

Would you mind posting a quick guide as how to tackle these questions? Including specifically time payments and annuities? Much appreciated!

[RuiAce]

I had one of these questions recently so I'm going to quote what I told them.

Effectively, every finance question is just the same thing in different words.

1. We always establish our interest rate first.
2. We start writing our recursive relationship.





3. Make this go on for n years. There is ALWAYS a geometric progression that forms in these types of questions.

4. Use the GP formula

Then whatever last is always a matter of understanding the wording. You will need to provide examples here, clearly indicating where you are stuck in the wording.

And of course, they can hide the yearly/monthly/... repayment from you, the number of years from you or the interest rate from you. The process is still the exact same regardless of which is chosen.

Now, when you say part i) and ii) I have no idea what you actually are talking about. Whilst the steps are identical, how the question is laid out is completely different. Some financial maths questions don't even have a part iii).

So you're going to have to provide much more information on what exactly the third part is supposed to be. An example question may be necessary.

I can't decipher what you mean by "an extra amount" either. If by "extra amount" you mean something new gets added in, I usually abort what I originally had and start fresh.

Edit: Jamon has a guide right here