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The math of financial literacy
1. The Math of
Financial Literacy
By: Engr. Edgar Caburatan Carrillo II, ChE
Master of Science in Mechanical Engineering
De La Salle University Manila, Philippines
2. Flow of Discussion
1.Brief Introduction
2. Three wealth creation strategy
3. Comparison and Analysis of Strategies
4. Conclusion
5. 3 Wealth Creation Strategy
1. Simple Interest
2. Compound Interest
3. EC Wealth Model
(1 )
FV PV i
Y
FV n
FV
FV FV i Y
n n s
365
Y D x
12
(1 )
1
1
1
s s
Y s S m
x
s
9. EC Wealth Model
P= Php 50,000 Ds= P 3.33/day
I=10% Sm= 33.33x 30=1000
n=40 years Ys= 1000*12= 12,000
FV1= P(1+i)+ Ys
FV1= 50,000(1+.1)+12,000= 67,000
FV2= 67,000(1.1)+12,000=87,000
Fvn= P 7.57 M
Dividend: 757,407.30/year
Monthly: 63,117.28/month
10. Analysis of Wealth Creation model
Inflation: Food= 50*3=150/day*30= 4,500
Cost of Food each month in 2014= Php 4,500
Cost of Food each month after 40 years:
FV=PV(1+i)^n= 4,500(1+.05)^40= 31,679.95
1. Simple Interest
Php= 416.67 (You will not survive)
2. Compound Interest
Php= 18,858.02(You will not survive)
3. EC Wealth Model
Php= 63,117.28(You will survive)
11. Conclusion
The three wealth Creation model can grow your wealth but among
the three, EC Wealth Model was proven to be the most efficient
way producing massive wealth.
The EC Wealth Model can only be implemented if Disciple,
hardwork and consistent monthly savings will be done. This is to
secure your retirement, securing your future and the future of your
children's children.