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Basics of Financial Mathematics

CBSE · Class 11 · Applied Mathematics

Flashcards for Basics of Financial Mathematics — CBSE Class 11 Applied Mathematics. Quick Q&A cards covering key concepts, definitions, and formulas.

45 questions25 flashcards5 concepts

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25 Flashcards
Card 1Interest and Interest Rate

What is Interest? Define it in simple terms.

Answer

Interest is a fee charged on the money that is borrowed. When you borrow money from someone or use somebody else's money, you have to pay a service charge to them. This amount is paid back to the lend

Card 2Simple Interest

What is the formula for calculating Simple Interest?

Answer

Simple Interest = P × i × n Where: P = Principal Amount i = Interest Rate n = Number of periods Under simple interest, interest is charged only on the principal amount, not on accumulated interest.

Card 3Simple Interest

Calculate the simple interest on ₹5,000 at 8% per annum for 3 years.

Answer

Given: P = ₹5,000, i = 8%, n = 3 years Simple Interest = P × i × n = 5,000 × 8% × 3 = 5,000 × 0.08 × 3 = ₹1,200 Total Amount = Principal + Interest = ₹5,000 + ₹1,200 = ₹6,200

Card 4Compound Interest

What is the formula for Compound Amount?

Answer

Compound Amount Formula: A = P(1 + i)ⁿ Where: A = Compound Amount P = Principal Amount i = Interest Rate n = Number of Periods Compound Interest = Compound Amount - Principal Amount

Card 5Interest Comparison

What is the key difference between Simple Interest and Compound Interest?

Answer

Simple Interest: Interest is charged only on the principal amount throughout the period. Compound Interest: Interest is charged on the principal plus any accumulated interest. The interest earned in

Card 6Compound Interest

Calculate compound interest on ₹10,000 at 10% per annum for 2 years.

Answer

Given: P = ₹10,000, i = 10%, n = 2 years Compound Amount = P(1 + i)ⁿ = 10,000 × (1 + 0.10)² = 10,000 × (1.10)² = 10,000 × 1.21 = ₹12,100 Compound Interest = ₹12,100 - ₹10,000 = ₹2,100

Card 7Effective Interest Rate

What is Effective Rate of Interest?

Answer

The effective rate of interest is the real return on a savings account or investment when the effects of compounding over time are considered. It reveals the actual percentage rate owed on a loan or e

Card 8Present Value

What is Present Value? Give the formula.

Answer

Present Value describes how much a future sum of money is worth today, accounting for the time value of money. Formula: PV = CF/(1+r)ⁿ Where: CF = Cash Flow in Future Period r = Discount rate or requ

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What are the important topics in Basics of Financial Mathematics for CBSE Class 11 Applied Mathematics?
Basics of Financial Mathematics covers several key topics that are frequently asked in CBSE Class 11 board exams. Focus on the core concepts listed on this page and practise related questions to build confidence.
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Understand the core concepts first, then work through the 45 practice questions available for this chapter. Revise formulas and definitions regularly, and use flashcards for quick recall before the exam.
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There are 25 flashcards for Basics of Financial Mathematics covering key definitions, formulas, and concepts. Use them daily for 10–15 minutes for best results.

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