MATHEMATICAL MODELING IN UNDERSTANDING REAL-LIFE FINANCIAL PROCESSES

Abstract

The integration of mathematical modeling in education plays a significant role in helping students understand complex financial processes that they will encounter in real life. This article explores how mathematical models can be applied to various aspects of finance, providing students with the tools to better navigate financial decisions. The research focuses on three key components of financial mathematical models: interest rates, savings and loans, and inflation. Interest rate models, including simple and compound interest, as well as the assessment of investment risks, form the foundation for understanding how money grows over time. Additionally, the study delves into the importance of savings and loans, emphasizing the significance of making informed decisions regarding deposits, savings, and responsible credit usage. Inflation models demonstrate the dynamic nature of prices and their impact on purchasing power, allowing students to recognize the effects of inflation on their financial stability.

Furthermore, the article examines how these models are employed in teaching. Topics such as the growth of money through savings and deposits, selecting optimal interest rates, making loan decisions, and understanding price changes are explored. The application of these models equips students with practical skills, enhancing their financial awareness and decision-making abilities. By bridging the gap between mathematics and everyday life, mathematical modeling fosters a deeper understanding of finances, ultimately helping students make informed financial choices and develop stronger financial literacy. Through this approach, students are empowered to make sound decisions, building a foundation for their future financial success