General Preliminary Mathematics Study Cards

Investing Money – General Preliminary Maths / Investing Money – General Preliminary Maths

Interest?

/ Interest Rate?
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Money paid to an investor for the use of their money. / The percentage used to calculate the interest.
Investing Money – General Preliminary Maths / Investing Money – General Preliminary Maths
Principal? / Simple Interest?
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The money invested (orborrowed). /
Investing Money – General Preliminary Maths / Investing Money – General Preliminary Maths

Find the value oftheinvestment

/ Compound Interest?

(Definition)

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A = P + I
Amount = Principal + Interest. / The interest is addedtothe principalat the endofeach period.
Investing Money – General Preliminary Maths / Investing Money – General Preliminary Maths
Calculating Compound Interest using A=P(1 + r)n / Compound Interest Formula.
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CI = A – P

Compound Interest =

Total Amount
-
Principal /
Investing Money – General Preliminary Maths / Investing Money – General Preliminary Maths
Future Value?
(FV) / Present Value?
(PV)
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The value of an investment at maturity.
(Same as ‘A’) / The initial value of the investment.
(Same as ‘P’)
Investing Money – General Preliminary Maths / Investing Money – General Preliminary Maths
Future Value
Formula. / Compounding
Period?
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FV = PV(1 + r)n
Similar to CompoundInterest.
A = P(1 + r)n / The amount of time between calculating the interest, when working out compound interest.
Investing Money – General Preliminary Maths / Investing Money – General Preliminary Maths
CVIF? / CVIF

Formula.

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Compound Value
Interest Factor / CV = PV x CVIF

CV = Compounded Value

PV = Present Value

(For use with a table)
Investing Money – General Preliminary Maths / Investing Money – General Preliminary Maths
Shares? / Dividend?
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A non-bank investment.
Buying into a company. / Profit divided amongshareholders.
Investing Money – General Preliminary Maths / Investing Money – General Preliminary Maths
Calculating
Dividends? / Dividend Yield?
(Definition)
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The ‘true value’ of shares. Found by calculating the dividend as a percentage of the current share price. / Profit
÷
Number of shares
Investing Money – General Preliminary Maths / Investing Money – General Preliminary Maths
Dividend Yield
Calculation. / Inflation?
(Definition)
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/ Price rises in an economy over time.
Investing Money – General Preliminary Maths / Investing Money – General Preliminary Maths
Calculating
Inflation. / To order go to:
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