Grade 12 · CAPS-aligned
Grade 12 Financial Maths — Loans, Investments & Sinking Funds
Formulas you actually need, plus a trick for spotting which one to use.
Financial maths is one of the most predictable sections in Paper 2 — 15–20 marks of formula-plugging if you can read the question. Master four formulas and you've got the topic.
Why most learners find this hard
Choosing between the annuity, loan, and lump-sum formulas under exam pressure. The numbers are easy; the decision-making is the skill.
What you'll learn
- Compound interest: A = P(1 + i)ⁿ
- Future-value annuity: F = x[((1 + i)ⁿ − 1) / i]
- Present-value annuity: P = x[(1 − (1 + i)⁻ⁿ) / i]
- Deciding which formula matches a loan, savings, or sinking fund scenario
- Effective vs nominal interest rates
Worked example
R5 000 is invested at 8% per year compound interest for 6 years. Find the future value.
- 1Use: A = P(1 + i)ⁿ
- 2Substitute: A = 5000(1 + 0.08)⁶
- 3Compute: (1.08)⁶ ≈ 1.5869
- 4A ≈ 5000 × 1.5869 ≈ R7 934.37
Answer: ≈ R7 934.37
Exam tips
- Convert the interest rate to match the compounding period — monthly questions need i/12.
- Always write the formula before substituting — markers award a mark for it.
- Use the memory function on your calculator for the intermediate value of (1 + i)ⁿ.
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