Theory of Finance

The value of money is studied under the following headings:

1.  Linear growth

• simple interest and simple discount.
• using straight line graphs for cost-volume analysis.
• using systems of linear equations and the intersection of straight line graphs for cost/revenue-volume analysis, focussing on break-even; demand and supply, focussing on market equilibrium.
• linear programming for optimisation.

2. Exponential Growth

• Compound Interest in present and future values.

3. Serial Growth

• Simple and Complex Annuities.
• Loans

4. Calculus

• Differentiation.
• Business Applications of differentiation.
• Integral calculus
• The area between a curve and the horizontal axis.

Tutorial group work

• The area between two curves.
  

5. Depreciation

• Linear depreciation - straight line method.
• Exponential depreciation - diminishing balance method.
• Serial depreciation - sinking funds