MONEY AND FINANCE

MONEY AND FINANACE:

Money is a fundamental and very important part of our everyday lives. We need money to survive as we use it to buy food, clothing, shelter etc. Every country in the world has their own currencies and in order to use money in other countries, we have to do currency exchange to use the correct currency for each country. In Namibia we use Namibian dollars (N$).

FINANCE: Refers to the management, creation, and study of money, investments and other financial instruments. It encompasses activities related to the acquisition, allocation and the use of funds in various sectors, including personal finance, corporate finance, and public finance. The main goal of finance is to optimize the use of resources to achieve financial goals. 

It is very important for one to understand both money and finance, to be able to manage money and their finances.

In the mathematical way, the many ways to calculate the different ways to handle money, for example you can calculate your profit, loss, selling price of items, the simple interest and so on. We are going to learn the different ways in how to calculate the mentioned terminologies and their definitions. 

Profit: This is when the revenue generated from the business exceeds the expenses, cost and taxes from the business. In simpler terms, it is when the selling price is more than the cost price, the business will make a profit. To find out if the business has made profit, one should subtract the cost price from the selling price.

Loss: A business will make a loss when their selling price is lower than the price from which they purchased their products (cost price). To find out if you made a loss, subtract the selling price from the cost price.

Simple Interest: Simple interest is a way to calculate the interest on a loan or investment based on the original amount known as the principal. It is calculated using the formula below:

                 Principal(P) x Rate(R) x Time(T)

                                    100

Compound Interest: This is the interest calculated on both the initial principal and the accumulated interest from previous periods. The formula for compound interest is:

Amount(A)= Principal(P) (1 + Rate / 100) ^n.

THE END 
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