Teaching basic finance with Excel, and without pain

Sugden, Stephen John (2012) Teaching basic finance with Excel, and without pain. In Proceedings of the 2012 Hawaii International Conference on Education, Hawaii International Conference on Education, Honolulu, Hawaii, pp. 1-9.

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Abstract

The five quantities of interest in elementary finance problems are present value, future value, amount of periodic payment, number of periods and the rate of compound interest per period. A recursive approach to computing each of these five quantities in a modern version of Excel, for the case of ordinary annuities, is described. The aim is to increase student understanding and build confidence in the answer obtained, and this may be achieved with only linear relationships and in cases where student knowledge of algebra is essentially zero. Annuity problems may be solved without use of logarithms and black-box intrinsic functions; these being used only as check mechanisms. The author has had success with the method at Bond University and surrounding high schools in Queensland, Australia.

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ID Code: 73245
Item Type: Conference Paper
Refereed: Yes
Keywords: Present Value, Future Value, Periodic Payment, Number of Periods, Compound Interest, Finance, Excel, HERN
ISSN: 1541-5880
Divisions: Current > Schools > School of Mathematical Sciences
Current > QUT Faculties and Divisions > Science & Engineering Faculty
Copyright Owner: Copyright 2012 [please consult the author]
Deposited On: 08 Jul 2014 22:25
Last Modified: 14 Jul 2014 03:48

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