Basics of Financial Mathematics for CBSE Class 11: Definitions, Syllabus, Weightage

Author : Tanya Kaushal

Updated On : March 23, 2024

SHARE

Reader's Digest: Want to elevate your math game? Explore the Basics of Financial Mathematics for CBSE Class 11. 🧮

Financial Mathematics may sound like a daunting subject, but understanding its basics is essential for managing personal finances and forms a crucial part of the CBSE Class 11 curriculum.

CBSE does not consider Finance Mathematics as a separate subject. It instead is studied under the umbrella of Mathematics.

CBSE designs its course to help students create and progress their mathematical skills and techniques. The subject aims to promote the significance and utility of mathematical prowess and simplicity that make it mandatory for almost every other existing field.

In this blog, we'll delve into the fundamentals of Financial Mathematics for CBSE Class 11 students, explore its practical applications, take a sneak peek at the upcoming syllabus for 2024, and provide valuable study tips to help you excel in your examinations.

Here's what we'll be covering:

  • Basics of Financial Mathematics for CBSE Class 11: An introduction to the foundational concepts you'll encounter in this subject.
  • Practical Uses of Financial Mathematics for CBSE Class 11: Discover how these mathematical principles are applied in the real world and why they are so important.
  • Syllabus of CBSE Class 11 Basics of Financial Mathematics 2024: Get a glimpse of what's in store for you in the upcoming academic year.
  • Expectation from Class 11 Basics of Financial Mathematics CBSE: A breakdown of the exam format and what you can anticipate.
  • Best Study Tips for CBSE Class 11 Fundamentals of Financial Mathematics: Practical advice to help you prepare effectively and achieve your desired results.

Definition of Financial Mathematics for CBSE Class 11

The Basics of Financial Mathematics for CBSE Class 11 encompass a range of concepts and tools designed to understand and analyze monetary value over time.

It gives students a fundamental understanding of the mathematics behind interest calculations, investments, annuities, and financial decision-making.

This foundational knowledge is imperative for students to grasp more advanced financial concepts and to make informed economic choices in the real world.

Explanation with Examples:

For instance, consider the concept of simple interest. If a student borrows ₹10,000 at a simple interest rate of 10% per annum for 3 years, how much interest would he/she owe at the end of this period?

Using the formula I=P×R×T, where I is the interest, P is the principal amount, R is the rate, and T is the time in years, the student would calculate =₹10,000×10/100×3=₹3,000I=₹10,000×10/100×3=₹3,000 as the interest.

Similarly, compound interest, another essential concept, considers interest on the initial principal and accumulated interest from previous periods.

If the same ₹10,000 were invested at a compound interest rate of 10% annually, the amount after one year would be ₹11,000 (10% of 10,000 added to the principal).

The interest for the second year would then be calculated on this new amount, making it ₹1,100 (10% of 11,000), leading to a second-year total of ₹12,100, and so on.

cuet online coaching

cuet online coaching

What are the Objectives of Studying Basics of Financial Mathematics for CBSE Class 11?

The objectives of studying the Basics of Financial Mathematics for CBSE Class 11 are as follows:

  • Explore the History of Interest Rates: Understand the origin and historical context of interest rates, gaining insights into how they have evolved.
  • Grasp Various Forms of Interest Rates: Learn about the different types and forms of interest rates, building a comprehensive knowledge base.
  • Apply Interest Rate Concepts in Real Life: Comprehend how interest rates are practically applied in real-life situations, making the subject matter relevant and applicable.
  • Delve into Economic Theories: Gain an overview of various economic theories associated with interest rates, offering a broader perspective.
  • Recognize Financial Mathematics' Relevance: Explain financial mathematics's significance in business and personal life, highlighting its practical importance.
  • Understand Key Financial Concepts: Develop a clear understanding of fundamental concepts related to financial mathematics, laying the foundation for more advanced learning.
  • Compute Income Tax and GST: Explain the steps involved in calculating Income Tax and GST, providing students with essential financial literacy skills.
  • Apply Financial Tools: Develop an understanding of practical applications of financial tools such as net present value, present value interest factor, future value interest factor, and annuity.
  • Handle Utility Bills: Gain the ability to calculate utility bills, including electricity, water, and other essential expenses, enhancing financial management skills.

Read More: CBSE Class 11 Applied Math Books 

CBSE Class 11 Basics of Financial Mathematics Syllabus 2024 

Before you dive into the subject and plan to excel at it in your coming board exam, it is necessary to understand the depth and Financial Mathematics basics of 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.

​​​​Here is a table summarizing the sub-topics covered in Unit VII: Basics of Financial Mathematics:

Sub-Topics Description
Interest and interest rate Origin, forms, applications, and economic theories of interest rates.
Accumulation with simple and compound interest Meaning, significance, formulae, and calculations under simple and compound interest rates.
Annual Equivalent Rate Understanding the annual equivalent rates and their application in various financial products.
Simple and compound interest rates with equivalency Applying equivalency concepts to simple and compound interest rates.
The effective rate of interest Concept and practical applications, especially in calculating coupon interests on bonds/debentures.
Present value, net present value, and future value Concepts, compounding, discounting, usage of PVAF/FVAF tables, computation of net present value.
Annuities, calculating the value of regular annuity Immediate, Annuity Due, Deferred Annuity, Perpetuity, and General Annuity.
Simple applications of regular annuities (up to 3 periods) Practical application of regular annuities up to 3 periods.
Tax, calculation of tax, and simple applications of tax calculation Fundamentals of taxation, Income Tax, and GST, with practical examples.
Bills, tariff rates, fixed charges, surcharges, service charge Types of bills, tariff rates, fixed charge, service charge, and their applications in various sectors of the Indian economy.
Calculation and interpretation of utility bills Components of electricity, water supply, and other supply bills, with consumer protection laws.
Interest rates on various savings, fixed, and recurring deposit products; computation of income tax Comparing interest rates, calculating income tax, and utility bills using realistic data.

Read More: CBSE Class 11 Applied Mathematics

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

In the CBSE Class 11 Basics of Financial Mathematics examination, here's what you can expect:

  • Adherence to Syllabus: Stick to the syllabus and its details. Cover all the topics mentioned to excel in the exam.
  • Mathematical Language: Develop the ability to communicate and relate everyday experiences mathematically. This includes understanding mathematical language and symbolism.
  • Complex Calculations: Be prepared for calculations involving numbers with recurring decimals. While questions may resemble those from your textbooks, they may involve more complex arithmetic.
  • Handling Large Numbers: Don't be afraid to deal with sums of large numbers. Be agile and vigilant in your calculations to avoid errors.
  • Logical Reasoning: Reinforce your logical reasoning skills. You must formulate and validate mathematical arguments, create examples, find counterexamples, and engage in mathematical investigations.
  • Interdisciplinary Connections: Expect questions requiring you to build connections within mathematical topics and other real-life disciplines. Financial Mathematics is not isolated; it has applications in various fields.
  • Algebraic Methods: Algebraic methods are essential for representation and problem-solving in Financial Mathematics. Be prepared to apply algebraic techniques.
  • Practical Applications: You'll learn practical applications such as calculating simple and compound interest, finding the present and future values of assets, calculating annuities (up to 3 periods), and doing taxes.
  • Utility Bills: You'll also learn to calculate monthly bills like electricity, water, and other supply bills, which have real-life relevance.

Read More: CBSE Class 11 Numerical Applications Syllabus

By approaching the CBSE Class 11 Basics of Financial Mathematics examination with a thorough understanding of the syllabus, strong mathematical skills, and the ability to apply concepts to practical situations, you'll be well-prepared to excel in this subject and gain valuable financial knowledge for life.

What Are the Best Study Tips to Boost Score in CBSE Class 11 Basics of Financial Mathematics?

Here are some study tips to help you boost your score in CBSE Class 11 Basics of Financial Mathematics:

  • Study the Syllabus: Familiarize yourself with the syllabus thoroughly. Knowing what topics are included and their weightage in the exam is essential for effective preparation.
  • Real-World Application: Use your electricity and water bills as practical examples. Solving real-life problems can provide a deeper understanding of the subject and how it applies to daily life.
  • Calculate Taxes: Try your hand at calculating your parents' taxes. This will help you grasp the intricacies of taxation beyond what's covered in textbooks. It also prepares you for unexpected questions in exams.
  • Reference Books: Don't limit your study materials to the textbook. Utilize reference books to gain a more comprehensive understanding of the subject. This is especially important as you progress to higher classes.
  • Practice Previous Year Papers: Solve previous year question papers to get a sense of the exam pattern and the types of questions that may be asked. It helps you become familiar with the format and improves your time management skills.
  • Mental Calculation: Avoid relying solely on calculators. Practice mental calculations to improve your computational skills. Solving problems mentally strengthens your ability to tackle complex questions.

Read More: CBSE Class 11 Applied Mathematics Syllabus

Study Materials for CBSE Class 11 Basics of Financial Mathematics

To excel in CBSE Class 11 Basics of Financial Mathematics, here are some recommended study materials:

  • NCERT Textbook: The NCERT textbook is the core resource for understanding the subject. Ensure you thoroughly read and understand all the concepts covered in this book. It aligns perfectly with the CBSE syllabus.
  • Suncos, Handbook for Mathematics: This handbook can be a valuable supplementary resource. It provides concise explanations, formulas, and examples, which can help you reinforce your understanding of mathematical concepts.
  • Master the NCERT Mathematics: This is another reference book that can help enhance your grasp of mathematical concepts. It may provide additional practice problems and explanations to supplement your NCERT textbook.
  • Additional Reference Books: While the provided list is a good starting point, you can also consider other reference books by renowned authors in the field of financial mathematics. Look for books that align with your learning style and provide a variety of practice questions and exercises.

Read More: CBSE Class 11  Maths Syllabus

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 to 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 questions and knowledge that a Financial Mathematics Exam at Standard 11 expects from you.

Q1) At what rate per cent per annum will a sum of money double in 8 years?

A) 12.5%

B) 13.5%

C) 11.5%

D) 14.5%

Q2) 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%

Q3) 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?

Q4) Suppose you invested $1000 per quarter over 15 years. 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?

Q5) Mr Sharma deposited Rs 20000 as a fixed deposit in a bank at 10% per annum. Find his annual income if 30% is deducted as income tax on the interest earned.

cuet mock test

cuet mock test

How to Avoid Common Errors While Solving Sample Question Paper for CBSE Class 11 Basics of Financial Mathematics?

Here's a table of common errors in the topic of CBSE Class 11 Basics of Financial Mathematics and how to solve them:

Common Error How to Solve it
Misunderstanding the formula for simple interest Review the formula for simple interest (I = PRT/100) and ensure you understand how to apply it correctly.
Confusion between simple and compound interest Differentiate between simple and compound interest concepts, understanding that compound interest includes interest on interest.
Inaccurate calculations with recurring decimals Practice working with recurring decimals to improve accuracy. Use calculators if necessary but understand the manual calculation process.
Neglecting the importance of real-life examples Utilize real-life examples, such as utility bills and taxes, to grasp the practical applications of financial mathematics.
Lack of understanding of annuities and types Study the different types of annuities (immediate, annuity due, deferred annuity, perpetuity) thoroughly, as they can be confusing.
Failing to grasp algebraic methods for problems Strengthen your algebraic skills, which are essential for solving financial mathematics problems.
Ignoring the relevance of tax calculations Pay attention to tax calculations and their real-world importance. Practice calculating taxes to become proficient.
Overdependence on calculators While calculators are helpful, don't rely solely on them. Practice mental calculations to build computational skills.
Not practising enough with reference books. Use reference books and solve many problems to reinforce your understanding of financial mathematics concepts.
Lack of clarity on compounding and discounting Ensure you understand the concepts of compounding and discounting and their practical applications in financial mathematics.
Neglecting to check calculations for errors Always double-check your calculations for errors to avoid mistakes in the final answers.

Read More: CBSE Class 11 Applied Maths Coordinate Geometry

Conclusion

In CBSE Class 11 Basics of Financial Mathematics, you embark on a journey into mathematical finance, where concepts like simple and compound interest, annuities, taxes, and utility bills take center stage. Here's a summary of key takeaways:

  • Financial Mathematics is essential in everyday life, from managing personal expenses to making business decisions.
  • CBSE integrates Financial Mathematics into its mathematics curriculum to develop mathematical skills and their real-world applications.
  • The syllabus covers various topics, including interest rates, annuities, and utility bill calculations.
  • To excel, it's crucial to understand the syllabus, practice real-world examples, and use reference books.
  • Sample questions help you gauge your understanding, and checking for common errors is vital to ensure accuracy.

Read More: CBSE Class 11 Applied Maths Calculus 

Frequently Asked Questions

What's the significance of studying Financial Mathematics for future?

How can students improve their mathematical skills for CBSE Class 11 Basics of Financial Mathematics?

Why is it important to understand compounding and discounting in Financial Mathematics?

How can students avoid common errors while solving sample question papers for CBSE Class 11 Basics of Financial Mathematics?

What are some recommended study materials for CBSE Class 11 Basics of Financial Mathematics?

Is Financial Mathematics a separate subject in CBSE Class 11?

What is Financial Mathematics, and why is it important for CBSE Class 11 students?

Basics of Financial Mathematics for CBSE Class 11: Definitions, Syllabus, Weightage

Author : Tanya Kaushal

March 23, 2024

SHARE

Reader's Digest: Want to elevate your math game? Explore the Basics of Financial Mathematics for CBSE Class 11. 🧮

Financial Mathematics may sound like a daunting subject, but understanding its basics is essential for managing personal finances and forms a crucial part of the CBSE Class 11 curriculum.

CBSE does not consider Finance Mathematics as a separate subject. It instead is studied under the umbrella of Mathematics.

CBSE designs its course to help students create and progress their mathematical skills and techniques. The subject aims to promote the significance and utility of mathematical prowess and simplicity that make it mandatory for almost every other existing field.

In this blog, we'll delve into the fundamentals of Financial Mathematics for CBSE Class 11 students, explore its practical applications, take a sneak peek at the upcoming syllabus for 2024, and provide valuable study tips to help you excel in your examinations.

Here's what we'll be covering:

  • Basics of Financial Mathematics for CBSE Class 11: An introduction to the foundational concepts you'll encounter in this subject.
  • Practical Uses of Financial Mathematics for CBSE Class 11: Discover how these mathematical principles are applied in the real world and why they are so important.
  • Syllabus of CBSE Class 11 Basics of Financial Mathematics 2024: Get a glimpse of what's in store for you in the upcoming academic year.
  • Expectation from Class 11 Basics of Financial Mathematics CBSE: A breakdown of the exam format and what you can anticipate.
  • Best Study Tips for CBSE Class 11 Fundamentals of Financial Mathematics: Practical advice to help you prepare effectively and achieve your desired results.

Definition of Financial Mathematics for CBSE Class 11

The Basics of Financial Mathematics for CBSE Class 11 encompass a range of concepts and tools designed to understand and analyze monetary value over time.

It gives students a fundamental understanding of the mathematics behind interest calculations, investments, annuities, and financial decision-making.

This foundational knowledge is imperative for students to grasp more advanced financial concepts and to make informed economic choices in the real world.

Explanation with Examples:

For instance, consider the concept of simple interest. If a student borrows ₹10,000 at a simple interest rate of 10% per annum for 3 years, how much interest would he/she owe at the end of this period?

Using the formula I=P×R×T, where I is the interest, P is the principal amount, R is the rate, and T is the time in years, the student would calculate =₹10,000×10/100×3=₹3,000I=₹10,000×10/100×3=₹3,000 as the interest.

Similarly, compound interest, another essential concept, considers interest on the initial principal and accumulated interest from previous periods.

If the same ₹10,000 were invested at a compound interest rate of 10% annually, the amount after one year would be ₹11,000 (10% of 10,000 added to the principal).

The interest for the second year would then be calculated on this new amount, making it ₹1,100 (10% of 11,000), leading to a second-year total of ₹12,100, and so on.

cuet online coaching

cuet online coaching

What are the Objectives of Studying Basics of Financial Mathematics for CBSE Class 11?

The objectives of studying the Basics of Financial Mathematics for CBSE Class 11 are as follows:

  • Explore the History of Interest Rates: Understand the origin and historical context of interest rates, gaining insights into how they have evolved.
  • Grasp Various Forms of Interest Rates: Learn about the different types and forms of interest rates, building a comprehensive knowledge base.
  • Apply Interest Rate Concepts in Real Life: Comprehend how interest rates are practically applied in real-life situations, making the subject matter relevant and applicable.
  • Delve into Economic Theories: Gain an overview of various economic theories associated with interest rates, offering a broader perspective.
  • Recognize Financial Mathematics' Relevance: Explain financial mathematics's significance in business and personal life, highlighting its practical importance.
  • Understand Key Financial Concepts: Develop a clear understanding of fundamental concepts related to financial mathematics, laying the foundation for more advanced learning.
  • Compute Income Tax and GST: Explain the steps involved in calculating Income Tax and GST, providing students with essential financial literacy skills.
  • Apply Financial Tools: Develop an understanding of practical applications of financial tools such as net present value, present value interest factor, future value interest factor, and annuity.
  • Handle Utility Bills: Gain the ability to calculate utility bills, including electricity, water, and other essential expenses, enhancing financial management skills.

Read More: CBSE Class 11 Applied Math Books 

CBSE Class 11 Basics of Financial Mathematics Syllabus 2024 

Before you dive into the subject and plan to excel at it in your coming board exam, it is necessary to understand the depth and Financial Mathematics basics of 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.

​​​​Here is a table summarizing the sub-topics covered in Unit VII: Basics of Financial Mathematics:

Sub-Topics Description
Interest and interest rate Origin, forms, applications, and economic theories of interest rates.
Accumulation with simple and compound interest Meaning, significance, formulae, and calculations under simple and compound interest rates.
Annual Equivalent Rate Understanding the annual equivalent rates and their application in various financial products.
Simple and compound interest rates with equivalency Applying equivalency concepts to simple and compound interest rates.
The effective rate of interest Concept and practical applications, especially in calculating coupon interests on bonds/debentures.
Present value, net present value, and future value Concepts, compounding, discounting, usage of PVAF/FVAF tables, computation of net present value.
Annuities, calculating the value of regular annuity Immediate, Annuity Due, Deferred Annuity, Perpetuity, and General Annuity.
Simple applications of regular annuities (up to 3 periods) Practical application of regular annuities up to 3 periods.
Tax, calculation of tax, and simple applications of tax calculation Fundamentals of taxation, Income Tax, and GST, with practical examples.
Bills, tariff rates, fixed charges, surcharges, service charge Types of bills, tariff rates, fixed charge, service charge, and their applications in various sectors of the Indian economy.
Calculation and interpretation of utility bills Components of electricity, water supply, and other supply bills, with consumer protection laws.
Interest rates on various savings, fixed, and recurring deposit products; computation of income tax Comparing interest rates, calculating income tax, and utility bills using realistic data.

Read More: CBSE Class 11 Applied Mathematics

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

In the CBSE Class 11 Basics of Financial Mathematics examination, here's what you can expect:

  • Adherence to Syllabus: Stick to the syllabus and its details. Cover all the topics mentioned to excel in the exam.
  • Mathematical Language: Develop the ability to communicate and relate everyday experiences mathematically. This includes understanding mathematical language and symbolism.
  • Complex Calculations: Be prepared for calculations involving numbers with recurring decimals. While questions may resemble those from your textbooks, they may involve more complex arithmetic.
  • Handling Large Numbers: Don't be afraid to deal with sums of large numbers. Be agile and vigilant in your calculations to avoid errors.
  • Logical Reasoning: Reinforce your logical reasoning skills. You must formulate and validate mathematical arguments, create examples, find counterexamples, and engage in mathematical investigations.
  • Interdisciplinary Connections: Expect questions requiring you to build connections within mathematical topics and other real-life disciplines. Financial Mathematics is not isolated; it has applications in various fields.
  • Algebraic Methods: Algebraic methods are essential for representation and problem-solving in Financial Mathematics. Be prepared to apply algebraic techniques.
  • Practical Applications: You'll learn practical applications such as calculating simple and compound interest, finding the present and future values of assets, calculating annuities (up to 3 periods), and doing taxes.
  • Utility Bills: You'll also learn to calculate monthly bills like electricity, water, and other supply bills, which have real-life relevance.

Read More: CBSE Class 11 Numerical Applications Syllabus

By approaching the CBSE Class 11 Basics of Financial Mathematics examination with a thorough understanding of the syllabus, strong mathematical skills, and the ability to apply concepts to practical situations, you'll be well-prepared to excel in this subject and gain valuable financial knowledge for life.

What Are the Best Study Tips to Boost Score in CBSE Class 11 Basics of Financial Mathematics?

Here are some study tips to help you boost your score in CBSE Class 11 Basics of Financial Mathematics:

  • Study the Syllabus: Familiarize yourself with the syllabus thoroughly. Knowing what topics are included and their weightage in the exam is essential for effective preparation.
  • Real-World Application: Use your electricity and water bills as practical examples. Solving real-life problems can provide a deeper understanding of the subject and how it applies to daily life.
  • Calculate Taxes: Try your hand at calculating your parents' taxes. This will help you grasp the intricacies of taxation beyond what's covered in textbooks. It also prepares you for unexpected questions in exams.
  • Reference Books: Don't limit your study materials to the textbook. Utilize reference books to gain a more comprehensive understanding of the subject. This is especially important as you progress to higher classes.
  • Practice Previous Year Papers: Solve previous year question papers to get a sense of the exam pattern and the types of questions that may be asked. It helps you become familiar with the format and improves your time management skills.
  • Mental Calculation: Avoid relying solely on calculators. Practice mental calculations to improve your computational skills. Solving problems mentally strengthens your ability to tackle complex questions.

Read More: CBSE Class 11 Applied Mathematics Syllabus

Study Materials for CBSE Class 11 Basics of Financial Mathematics

To excel in CBSE Class 11 Basics of Financial Mathematics, here are some recommended study materials:

  • NCERT Textbook: The NCERT textbook is the core resource for understanding the subject. Ensure you thoroughly read and understand all the concepts covered in this book. It aligns perfectly with the CBSE syllabus.
  • Suncos, Handbook for Mathematics: This handbook can be a valuable supplementary resource. It provides concise explanations, formulas, and examples, which can help you reinforce your understanding of mathematical concepts.
  • Master the NCERT Mathematics: This is another reference book that can help enhance your grasp of mathematical concepts. It may provide additional practice problems and explanations to supplement your NCERT textbook.
  • Additional Reference Books: While the provided list is a good starting point, you can also consider other reference books by renowned authors in the field of financial mathematics. Look for books that align with your learning style and provide a variety of practice questions and exercises.

Read More: CBSE Class 11  Maths Syllabus

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 to 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 questions and knowledge that a Financial Mathematics Exam at Standard 11 expects from you.

Q1) At what rate per cent per annum will a sum of money double in 8 years?

A) 12.5%

B) 13.5%

C) 11.5%

D) 14.5%

Q2) 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%

Q3) 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?

Q4) Suppose you invested $1000 per quarter over 15 years. 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?

Q5) Mr Sharma deposited Rs 20000 as a fixed deposit in a bank at 10% per annum. Find his annual income if 30% is deducted as income tax on the interest earned.

cuet mock test

cuet mock test

How to Avoid Common Errors While Solving Sample Question Paper for CBSE Class 11 Basics of Financial Mathematics?

Here's a table of common errors in the topic of CBSE Class 11 Basics of Financial Mathematics and how to solve them:

Common Error How to Solve it
Misunderstanding the formula for simple interest Review the formula for simple interest (I = PRT/100) and ensure you understand how to apply it correctly.
Confusion between simple and compound interest Differentiate between simple and compound interest concepts, understanding that compound interest includes interest on interest.
Inaccurate calculations with recurring decimals Practice working with recurring decimals to improve accuracy. Use calculators if necessary but understand the manual calculation process.
Neglecting the importance of real-life examples Utilize real-life examples, such as utility bills and taxes, to grasp the practical applications of financial mathematics.
Lack of understanding of annuities and types Study the different types of annuities (immediate, annuity due, deferred annuity, perpetuity) thoroughly, as they can be confusing.
Failing to grasp algebraic methods for problems Strengthen your algebraic skills, which are essential for solving financial mathematics problems.
Ignoring the relevance of tax calculations Pay attention to tax calculations and their real-world importance. Practice calculating taxes to become proficient.
Overdependence on calculators While calculators are helpful, don't rely solely on them. Practice mental calculations to build computational skills.
Not practising enough with reference books. Use reference books and solve many problems to reinforce your understanding of financial mathematics concepts.
Lack of clarity on compounding and discounting Ensure you understand the concepts of compounding and discounting and their practical applications in financial mathematics.
Neglecting to check calculations for errors Always double-check your calculations for errors to avoid mistakes in the final answers.

Read More: CBSE Class 11 Applied Maths Coordinate Geometry

Conclusion

In CBSE Class 11 Basics of Financial Mathematics, you embark on a journey into mathematical finance, where concepts like simple and compound interest, annuities, taxes, and utility bills take center stage. Here's a summary of key takeaways:

  • Financial Mathematics is essential in everyday life, from managing personal expenses to making business decisions.
  • CBSE integrates Financial Mathematics into its mathematics curriculum to develop mathematical skills and their real-world applications.
  • The syllabus covers various topics, including interest rates, annuities, and utility bill calculations.
  • To excel, it's crucial to understand the syllabus, practice real-world examples, and use reference books.
  • Sample questions help you gauge your understanding, and checking for common errors is vital to ensure accuracy.

Read More: CBSE Class 11 Applied Maths Calculus 

Frequently Asked Questions

What's the significance of studying Financial Mathematics for future?

How can students improve their mathematical skills for CBSE Class 11 Basics of Financial Mathematics?

Why is it important to understand compounding and discounting in Financial Mathematics?

How can students avoid common errors while solving sample question papers for CBSE Class 11 Basics of Financial Mathematics?

What are some recommended study materials for CBSE Class 11 Basics of Financial Mathematics?

Is Financial Mathematics a separate subject in CBSE Class 11?

What is Financial Mathematics, and why is it important for CBSE Class 11 students?

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