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Basics of Financial Mathematics for CBSE Class 11 Students [2022-23]

Author : Palak Khanna

Updated On : November 9, 2022


Mathematics in Class 11 is the beginning of an entirely different academic life. You jump from easy simple interest questions to complex calculus problems. You get throttled into a world full of theorems & hypotheses, progressions & equations and similar other transitions.

We will talk about the Fundamental Concepts of Financial Mathematics Class 11 in detail in this article. We will try to explain what Financial Mathematics actually is and how you have been using it your whole life without even studying and learning in your schools and tuitions.

As per NC State University, a leading Institute in the field of Finance Mathematics, “Financial Mathematics is the application of mathematical methods to financial problems. (Equivalent names sometimes used are quantitative finance, financial engineering, mathematical finance, and computational finance.)”

In simpler words, the math that you use while some cash in your hand is Finance Mathematics. Now for you, it could be a petty change. For your father, it could be bills and family expenses. for an engineer, it could be the cost of a project. for a statistician, it could be the sum of money spent by a certain group of people under study. You get the idea, right!

CBSE does not consider Finance Mathematics as a separate subject. It instead is studied under the I umbrella of Mathematics. CBSE designs its course to help students create and progress their mathematical skills and techniques. The aim of the course is to promote the significance and utility of mathematical prowess and simplicity that makes it mandatory for almost every other existing field.

Syllabus for CBSE Class 11 Basics of Financial Mathematics

Before you dive into the subject and plan to excel at it in your coming Boards exam, it is necessary to understand the depth and Financial Mathematics basics Class 11. It is essential for you to know the syllabus of Class 11 Financial Mathematics in addition to Applied Maths Financial Statistics Class 11. The Preparation for any exam, the master of all- UPSC CSE included, can not be done without the knowledge of Syllabus.

Class 11 is the introduction of Financial Mathematics. Its Syllabus comprises topics that become the foundation of Financial Mathematics taught in higher studies. Some of the topics are familiar while some will be alien to you. But the topics that are new to you will have applications from what you have studied up to your Class XI. Some of the known topics covered under Financial Mathematics are Interest (Simple and Compound). Some of the new topics under Fundamental Concepts of Financial Mathematics Class 11 are Taxes, Bills, Asset Value, and Annuity. Let us look at the syllabus of Financial Mathematics Basics Class 11 in detail.

  • Interest and interest rate
  • Accumulation with simple and compound interest
  • Simple and compound interest rates with an equivalency
  • The effective rate of interest
  • Present value, net present value and future value
  • Annuities, calculating the value of the regular annuity
  • Simple applications of regular annuities (up to 3 periods)
  • Tax, calculation of tax and simple applications of tax calculation in Goods and
  • service tax, Income Tax
  • Bills, tariff rates, fixed charge, surcharge, service charge
  • Calculation and interpretation of electricity bill, water supply bill and other supply bills

Syllabus helps you form an opinion about the subject that sticks with your subconscious and you develop a relationship with the subject. The more time you spend with the syllabus, the better your relationship with the subject becomes. Hence it is highly recommended that you spend some quality time thoroughly studying the syllabus of Class 11 Financial Mathematics given above.

What to Expect in the CBSE Class 11 Basics of Financial Mathematics Examination?

A teacher once told me, “Syllabus is the guiding light” and it stands true for every exam on the planet earth. If you stick to the syllabus, pay attention to its nuances and cover the topics mentioned there, you are going to excel at the test. And it is a fact.

We will understand what the subject of Fundamental Concepts of Financial Mathematics Class 11 expects from you. And how you are supposed to approach the subject to be great at it. The subject expects you to develop mathematical language and symbolism to communicate and relate everyday experiences mathematically.

In your quarterly, yearly and half-yearly examinations of Financial Mathematics Basics Class 11, be ready for some loaded calculations involving numbers with recurring decimals. While the questions will be straight forward and they will even resemble some questions from your textbooks and reference books.

The questions in Financial Mathematics which is asked with Applied Maths Financial Statistics Class 11 test your adaptability to simple arithmetic with complex numbers. You should not be afraid of dealing with sums of large numbers. You should be agile and vigilant for any errors on the part of your calculation.

In addition, the subject intends you to reinforce the logical reasoning skills. You are required to formulate and validate mathematical arguments, frame examples, find counterexamples and others. You will be engaged in mathematical investigations throughout the exam. You might be to build connections within mathematical topics and with other disciplines of real life.

Financial Mathematics sees application in other fields of mathematics too in addition to Arithmetic. Algebraic methods as a means of representation and as a problem-solving tool is an elemental part of Financial Mathematics and so should it be part of your preparation strategy. It is something you should expect in Class 11 Financial Mathematics Examination.

By the time you are through with the subject, you will know how to calculate simple interest and compound interest. You will know how to find the value of an asset in the present time and also predict it for a future date. You will know to calculate annuity (upto 3 periods). You will have learned how to do your taxes, which is going to come in handy the day you start paying them. In addition, you will also learn to calculate the bills and tariff rates and surcharges and services charges and others.

Other important things that you will have learned in Financial Mathematics will be the calculation of monthly bills such as Electricity and Water Bills and other supply bills.

Study Tips for excelling at CBSE Class 11 Basics of Financial Mathematics

Financial Mathematics like every other existing subject requires consistent study and thorough learning for students to be great at it. Since Financial Mathematics is a subset of Mathematics, students need to spend some extra time learning the concepts and solving lots of problems. This makes them habitual and friendly with concepts of the subject.

Study the Syllabus: As we mentioned before, Syllabus is the most important piece of paper when it comes to acing any subject. You should know while looking at a topic whether it is relevant or not. That understanding will only be able to develop if you have studied the syllabus and are aware of every nook and corner of it.

Use your Electricity and Water Bills: Practising something original and from the real world will help you clear your doubts multi-fold when compared to solving a question from the book. Real-life examples help you understand that shift from closed environment of textbook questions and throttle at you, problems with innumerable constraint

Calculate your parents Taxes: Similar on the previous note, you should do the taxes of your parents to understand the nuances included that a textbook doesn’t teach. You should be able to handle any surprises in the exam. You should be able to solve the questions in the minimum time possible in your Class 11 Exam and Class XII Board Exam.

Solve a Reference Book: Gone are the days when you could score 100% with the help of your textbook. You are at a standard/class where you need to develop an understanding and a healthy relationship with the subject to be able to score consistently well in your exams. And solving a reference book is an elemental part of it.

Practise Previous Year papers: Previous Year papers will help you take sin in the mind of your examiner. Because every exam and examiner has a pattern which they follow and it is true of every test whether at the school level or university level or competitive scale. Solving Previous Year papers will keep you acquainted with the of questions asked and the methods used to calculate the answer.

Don’t depend on calculators. Use your head: The more you solve sums in your head, the better you make it become. Consider it as a workout for the brain. And the way bicep curls help build your bicep, those sums that you are doing in your head increase calculative capacity, storage ability and cache memory of your brain. Which in turn help you solve even bigger and more complex questions later.

Study Materials for CBSE Class 11 Basics of Financial Mathematics

In your journey to acing the exam, Books are your biggest friend and mock papers are your cheerleaders. In addition and in place of hours of tuition and classes and online lectures and practise sessions and quizzes of school and Olympiads of organisations, books stay the best.

Books help you stay in your lane because subjects such as mathematics have no boundary and you never know when you are reading outside your syllabus and gathering irrelevant information. Text Books, Reference Books, clubbed with your syllabus is your chandrahaas in the examination. Let us take a look at the list of reference books you should be reading/ studying while preparing for the Financial Mathematics Exam.

  • Suncos, Handbook for Mathematics
  • Master the NCERT Mathematics from Flipkart

Sample Questions for CBSE Class 11 Basics of Financial Mathematics

Follow the list of CBSE Class 11 Basics of Financial Mathematics sample questions provided to you. Let them help you develop an independent idea and understanding of the subject before you begin studying it. As mentioned in the syllabus, the topics under Class 11 Financial Mathematics range from Simple Interest, Compound Interest and reach up to the level of annuities, taxes, and rebates.

We have found a few questions from most topics to help you understand the type of question and knowledge that a Financial Mathematics Exam at Standard 11 expects from you.

  1. At what rate per cent per annum will a sum of money double in 8 years.
  2. A) 12.5% B) 13.5%
  3. C) 11.5% D) 14.5%
  4. If the amounts for a fixed principal after 3 and 2 years at a certain rate of compound interest are in the ratio 21: 20. The rate of interest is

A 7% B 4%

C 5% D 6%

  1. The money in the savings accounts increases by an annual interest rate of i per cent. If the interest accrues monthly, which of the following equations shows the present value, PV, of the money in the account based on the future value, FV, after a period of m months?
  2. Suppose you invested $1000 per quarter over a 15 year period. If money earns an annual rate of 6.5% compounded quarterly, how much would be available at the end of the time period. How much is the interest earned?
  3. Mr Sharma deposited Rs 20000 as a fixed deposit in a bank at 10% per annual. If 30% is deducted as income tax on the interest earned, find his annual income.

Sample Question Paper for CBSE Class 11 Basics of Financial Mathematics

Sample papers are the best resource for practising for subjects such as Maths. Experts including higher secondary teachers, book authors, university lecturers come together to form sample papers for students to practise.

By solving Class 11 Financial Mathematics Sample Papers, students will get an idea about the exam pattern, level of difficulty, types of questions asked in the examination. This will help them gauge their preparation and make adjustments to their strategy. 

Sample papers used to be an important pillar of my preparation strategy during my higher secondary years. Daily Practise of Mocks/ Sample Papers used to be a decisive factor of how I was going to spend my day. In fact, it also decided the agenda of the day for me. This not only helped me achieve a massive 94/100 in my Class 11 exam, and 87/100 in my Class XII exam, but also helped me get an edge over most of my engineering colleagues later in my life

Hence, it is advisable for you to keep a regular flow of practice sessions with sample papers in your Financial Mathematics preparation strategy and ace the exam later on.

Frequently Asked Questions

Acknowledge your negative thoughts. Process them. Reason with them. You'll realise how unrealistic they are. Challenge the thoughts that say you are a failure and you can't succeed. Remind yourself that it is just an exam and you have self-promises to keep and miles to go before you sleep.
So, you do badly. That’s it. But it is not the end of the world. People make mistakes, sometimes, even blunders, but that doesn’t make them less of people. Learn from your mistakes and use them as guiding light for your next exam.
Set a timer. Keep all your stationery with you. Do not leave your desk until the timer stops. Answer each and every question as guided. Ask your folks not to disturb you while you are giving the exam. Do not exceed the timer. Do not cheat. Do not take help from books.

Consider yourself a teacher while analysing your Financial mathematics Sample papers. Check each and every step. Do not assume anything. If something is missing in the solution, or something is not as clear as it should be, penalise yourself for that. Calculate the total marks and reduce 10% against exam related frenzy.

Additionally, Divide the topics asked into three lists of . Strongholds would be the ones you are best at and no question can steal marks away from you in these topics. Territorial would be a list of topics that you are good at but still has room for improvement. Alien topics would be the list of topics that are totally new to you and you never know how to begin in questions from these topics.

It is okay. You know what your stronghold, territorial and alien subjects are. Make a realistic expectation of how you should be performing in the tests. And keep updating that list on the basis of your performance
Remember. This is your exam. The person that is most affected by the result is you. What matters is how you feel about your result and performance. When it comes to family, everything becomes dramatic, no doubt. What you can do is ; Be open and honest with them. Converse your feelings about the result and what you think went wrong, if any did. Reassure them of your concerns and efforts. Most importantly, Don’t have any negative bias against your parents because sometimes people need just a little more reassurance.
  • Don’t keep on thinking about the future.
  • Believe in yourself.
  • Try to put your best effort.
  • Learn from your previous experience papers and work more on your weak areas.
  • Always remember that no one can see the future but what you can do is, prepare best for tomorrow.


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