Financial Literacy-Future Value of Annuity-Math Assessment-Revision-Exam Style

Grades: 10th to 12th

Financial Mathematics Problem Solving can be used for:

• Assessment: As a formal task to evaluate student understanding.
• Revision: For targeted practice and review.
• As Exam Question

The marking scheme is editable. Feel free to adjust it to your preferred criteria or school requirements.

Focus Area: Compound Interest Investments with Periodic Deposits (Annuities)

To assess students’ understanding of annuity calculations, include:

• Determining the total investment within a specific period
• Determining a rule of annuity related to the case
• Determining time required to achieve a specific amount of investment based on the interest rate and fixed deposits.
• Calculating the monthly deposit needed to achieve a specific amount of investment within a specified time frame.

Skill Development:

• Applying algebraic techniques to solve financial problems.
• Using geometric progressions to model an annuity.
• Rounding money to the nearest cent.
• Converting interest rates and time periods between different formats.

Also comply with Australian Curriculum:

Use a recurrence relation to model an annuity, and investigate (numerically or graphically) the effect of the amount invested, the interest rate, and the payment amount on the duration of the annuity (ACMGM099)

With the aid of a financial calculator or computer-based financial software, solve problems involving annuities (including perpetuities as a special case); for example, determining the amount to be invested in an annuity to provide a regular monthly income of a certain amount. (ACMGM100)

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