Context

Introduction

Financial Mathematics is an area of mathematics that applies its concepts to the study of money over time. The idea of this project is for you to apply mathematical concepts to understand and calculate various situations involving money such as interest, discounts, loans, investments, savings, etc.

Financial Mathematics is useful for various everyday situations, both for organizing your personal finances and for making decisions in a company. For example, understanding how compound interest works can help when deciding the best way to pay off a debt or choose a type of investment.

Moreover, the use of spreadsheets for organizing and calculating these operations is a valuable tool. Excel, for example, is one of the most used programs in the job market for data manipulation and analysis. Therefore, by learning how to use it, you will be acquiring highly sought-after skills in the job market.

Connection to the Real World

Financial mathematics is present in many aspects of our daily lives. When we pay our bills, take out loans, make decisions about investments, or try to save money, we are practicing financial mathematics. Understanding these concepts can help us make more informed decisions and retain more of our money in the long run.

Entering the world of finance, companies apply these concepts to make investment decisions, evaluate projects, understand the value of money over time, and assess risks. Therefore, financial mathematics is crucial for effective business management.

Activity

Activity Title: Mathematical Entrepreneur Fair

Project Objective

This project aims to provide a space for applying knowledge of financial mathematics and the use of spreadsheets in simulating a business environment. Students will create and manage a fictional business, developing a business plan, a budget, and conducting scenario simulations.

Detailed Project Description

Students will be divided into groups of 3 to 5 people, and each team will have one week to develop the project. The idea is for each group to create a fictional business, whether it be a technology startup, a clothing store, a restaurant, among others. For this, a financial planning of this business must be carried out using financial mathematics tools and spreadsheets to assist in calculations and data organization.

Required Materials

1. Computer with internet access.
2. Spreadsheet software (Excel, Google Sheets, or similar).
3. Research materials (books, articles, websites, etc.).

Detailed Step-by-Step

1. Formation of groups and choice of the type of business to be created.
2. Research on the chosen type of business, including aspects such as initial costs for opening the business, operating costs, selling prices of products or services, etc.
3. Creation of the business plan, containing the business description, target audience, marketing strategy, and financial plan.
4. Development of the business budget using a spreadsheet. The budget should include initial costs, monthly costs, revenue forecast, break-even calculation, as well as other relevant financial indicators such as profitability and return on investment.
5. Conduct scenario simulations by varying cost and revenue values and analyze these scenarios using financial mathematics concepts.
6. After completing the analysis and calculations, the groups should create a presentation of their business and the financial results for the class.

Project Deliverables

At the end of the project, each group must deliver:

1. The business plan of their venture.
2. The spreadsheet with the budget and financial analyses performed.
3. A presentation to the class about their business and the financial conclusions obtained.

In addition to the business plan and presentation, the groups must write a report containing:

• Introduction: Description of the business and justification for the choice of business type. It should also comment on the relevance of financial mathematics and the use of spreadsheets in business planning.
• Development: Here the business plan, budget, financial analyses, and simulations carried out should be detailed. It should explain the financial mathematical theory used and how spreadsheets were used at each stage.
• Conclusion: In this section, students should review the main learnings from the project, the challenges encountered, the proposed solutions, and comment on the business's viability based on the financial analyses conducted.
• Bibliography: This section should include the research sources used for the project development.