APhigh school
Financial Literacy Systems
A systems-thinking approach to personal finance covering compound interest, cash flow management, risk and probability, and debt leverage. Builds mathematical intuition for real-world financial decisions.
4units
4topics
60questions
~2hours
Course Units
Learning objectives
- Explain the difference between simple and compound interest and why compound interest creates exponential growth
- Apply the compound interest formula A = P(1 + r/n)^(nt) to calculate future values with different compounding frequencies
- Use the Rule of 72 to estimate doubling time for investments and distinguish it from tripling or other growth targets
- Compare APR and APY to evaluate the true cost of loans and the true return on savings accounts
- Explain how inflation erodes the real value of savings and adjust compound interest calculations for real vs nominal returns
Topics in this unit
Learning objectives
- Distinguish between income and wealth and explain why high earners can still have negative net worth
- Build a personal cash flow statement that tracks income, fixed expenses, variable expenses, and net savings rate
- Design a flexible budget using the 50/30/20 framework and explain how to adjust when income or expenses change
- Calculate the target size of an emergency fund based on monthly expenses and explain why liquidity matters
- Evaluate the tradeoffs between saving, investing, and paying down debt at different interest rates
Topics in this unit
Learning objectives
- Calculate expected value by weighting possible outcomes by their probabilities
- Explain the risk-return tradeoff and why higher returns require accepting greater uncertainty
- Use standard deviation to compare the riskiness of different investments with similar average returns
- Distinguish between systematic and unsystematic risk and explain how diversification reduces only the latter
- Apply expected value calculations to personal insurance decisions and explain when self-insuring makes financial sense
Topics in this unit
Learning objectives
- Distinguish between secured and unsecured debt and explain how each affects interest rates and lender risk
- Calculate and interpret key leverage metrics including debt-to-equity ratio and interest coverage ratio
- Demonstrate through numerical examples how financial leverage amplifies both gains and losses on equity
- Analyze an amortization schedule and explain why early loan payments are predominantly interest
- Explain how credit scores are calculated and identify strategies to build and maintain a strong credit history
Topics in this unit