Understanding the Mathematics of Personal Finance

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Understanding the Mathematics of Personal Finance


A user-friendly presentation of the essential concepts and tools for calculating real costs and profits in personal finance. Understanding the Mathematics of Personal Finance explains how mathematics, a simple calculator, and basic computer spreadsheets can be used to break down and understand even the most complex loan structures. In an easy-to-follow style, the book clearly explains the workings of basic financial calculations, captures the concepts behind loans and interest in a step-by-step manner, and details how these steps can be implemented for practical purposes. Rather than simply providing investment and borrowing strategies, the author successfully equips readers with the skills needed to make accurate and effective decisions in all aspects of personal finance ventures, including mortgages, annuities, life insurance, and credit card debt. The book begins with a primer on mathematics, covering the basics of arithmetic operations and notations, and proceeds to explore the concepts of interest, simple interest, and compound interest. Subsequent chapters illustrate the application of these concepts to common types of personal finance exchanges, including:. Loan amortization and savings;. Mortgages, reverse mortgages, and viatical settlements;. Prepayment penalties;. Credit cards. The book provides readers with the tools needed to calculate real costs and profits using various financial instruments. Mathematically inclined readers will enjoy the inclusion of mathematical derivations, but these sections are visually distinct from the text and can be skipped without the loss of content or complete understanding of the material. In addition, references to online calculators and instructions for building the calculations involved in a spreadsheet are provided. Furthermore, a related Web site features additional problem sets, the spreadsheet calculators that are referenced and used throughout the book, and links to various other financial calculators. Understandin
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"A retired teacher paid $62,000 towards her pension…What will we pay her? $1.4 million in pension benefits…"

By noodling around with various online financial calculators, I see that if the teacher had saved $1000 per month for 35 years and managed to earn about 6% interest, she'd have amassed about $1.4million.

Would anyone be complaining today if the school district had paid the teacher 12 grand more per year and simply set it aside for the teacher to draw on now?

And for the younger generation to say that they shouldn't have to pay that teacher the compensation she deferred, when they benefited from the education she imparted, seems a bit selfish.

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You could have given a little more general information about the test in your introduction, so that people who have not done it could understand it nevertheless.
–> Your conclusion is VERY short…
–> Apart from that and the points below, you´ve produced a good comment!
l.3: to be good AT sth.
l.5: "something like this" is an expression that you would use in spoken language. In a formal written context, you could write "…and similar kinds of professions."
l.6/7: "…and doing financial calculations"
l.7: normalLy THERE;
l.7: SCIENCE and POLITICS
l.8: prerequisite –> good expression! ++
l.9: "BUILDING (better: constructing) technical THINGS and REPAIRING
l.10: word order –> "you ALSO have…"
l.11: THAN the COMPETITOR
last line: creativE]]>

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