Question 1Examination 1 style
The value, in dollars, of a car after years is modelled by . Which statement describes this model?
VCE General Maths financial modelling
Every financial model in the course is a first-order recurrence relation: a value multiplied by one plus the interest rate per period, plus or minus a payment. Loans, annuities, investments and depreciation are the same idea with different signs.
| Examination 1 | 40 multiple-choice questions, 90 minutes |
|---|---|
| Examination 2 | 60 marks of short and extended answers, 90 minutes |
| Study score | Each examination 30%; coursework 40% |
| Technology | CAS and a scientific calculator, one bound reference |
One relation, many settings
- Reducing balance depreciation: multiply by one minus the rate each period.
- Flat rate and unit cost depreciation: subtract the same amount each period or each unit of use.
- A reducing balance loan: add the period's interest, then subtract the repayment.
Try 2 questions
Question 2Examination 1 style
$640 000 is invested in a perpetuity that earns interest at 4.5% per annum, compounding quarterly. The same payment is made from it at the end of every quarter, forever. What is the quarterly payment?
Next step
Questions people ask
What is the difference between nominal and effective interest rates?
The nominal rate is the stated annual rate; the effective rate is the annual growth once interest compounds more often than yearly, so it is higher for monthly compounding.
Is financial modelling on both examinations?
Yes. It is 8 of the 40 questions on Examination 1 and 12 of the 60 marks on Examination 2.