Algebra And Personal FiNANCE. Dr. Amit Dave Cornell Grant Georgia Piedmont Technical College Atlanta, Georgia. Importance of Financial Mathematics Many students have very limited knowledge of personal finance.
Dr. Amit Dave
Georgia Piedmont Technical College
A survey conducted in 2008 by the US Department of Education reflects continued increases in student debt.
The average entry-level job pays $46,000 a year, and average college senior graduates with nearly $23,000 in debt.
A research study conducted by Sallie May showed nearly 85% undergraduate students expressed their desire to have a college course to teach money management skills.
In 2008, the average debt at a public university was $20,200 - 20% higher than 2004.
The real world applications when incorporated with technology can be great motivator for students.
FV = Future Value
PMT = Payment
i = Interest rate
Same calculation is performed for regular IRA (401K); however since the regular IRA (401K) is based on pre-tax dollars, the entire amount ($36,552.97) is taxable. The tax rate depends on the income of the individual.
Students are asked to stop investing $500.00 per year after 25 years and invest $36,552.97 for another 10 years at 6% interest compounded annually.
FV = $65,460.80
The same formula is used to perform calculations for “n”, and i, where students are required to use logarithms.