BEX2001 Lecture 3: BEX2001 Lecture note 3
1 Sep 2018
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Why money maths? (importance of money maths to financial literacy and decisions that you make) Tv: but its also important for long term, so as you"ve start working you will accumulate annual payments. Albert einstein on compound interest - when you borrow money, you pay interest: when you lend money, you earn interest. Interest is typically measured as % of the principal, and to correctly define it you also need to specify the period over which this is calculated. Starting with the principal, after interest is calculated and paid, it is added to the original amount make a new larger principal. This larger principal now garners slightly more interest. Imagine you have in the bank and they agree to pay you 20% interest per year. With simple interest, interest is paid at the end of a specified term, although if the term is more than 12 months, interest may be paid annually.
