Mexican Financial System
What date Banxico was created?
September 1st 1925
It is the type of interest calculated exclusively on the original principal amount.
Simple Interest
General VAT (IVA) percentage applied across most of the Mexican territory.
16%
Commission responsible for protecting and defending the rights of financial service users in Mexico.
CONDUSEF
IVA percentage applicable in Mexico's Northern Border Free Zone via tax stimulus decree.
8%
Regulatory body that acts as the "referee," supervising, regulating, and sanctioning banks and brokerage houses in Mexico.
CNBV
Mathematical effect where generated interest is added to the principal to earn new interest ("money making money").
Compound Interest
Mathematical operation required to remove a 16% VAT from a price that already includes it (Gross Price)
dividing by 1.16
Maximum percentage of net income recommended by CONDUSEF to dedicate to debt payments to avoid over-indebtedness.
30% to 35%
A computer costs $17,400 MXN in Guadalajara with 16% VAT included. What is its net price?
$15,000 MXN ($17,400 \div 1.16$)?
Government institution that backs and guarantees bank deposits for savers up to 400,000 UDIs per person, per bank.
IPAB
Empirical rule to calculate how many years it will take for an investment to double by dividing the number 72 by the annual interest rate.
Rule of 72
True or False: A 20% discount plus an additional 10% equals a direct 30% discount
False? (It equals a 28% effective discount)
Percentage indicator reflecting the total annual cost of a loan, including interest rates, commissions, and insurance.
CAT (Total Annual Cost / APR-equivalent
A desk costs $23,760 MXN in Ciudad Juárez with 8% VAT included. What is its net price?
$22,000 MXN ($23,760 \div 1.08$)?
What's Banxico structure and the years of service
1 Governor & 4 Deputy Governors
Governor 6 years Deputy Governors 8 years
If you invest $10,000 MXN at 10% annual simple interest for 5 years, what is the total accumulated amount?
$15,000 MXN? ($M = 10,000 \times [1 + (0.10 \times 5)]$)
If a pair of sneakers costs $2,320 MXN with 16% IVA included, what is the net price without IVA and the exact tax amount?
Net Price of $2,000 MXN and $320 MXN of IVA?
Financial term describing a person who pays 100% of their credit card statement balance before the payment due date to avoid paying interest.
Full-Payer" ("Totalero"
If a product costs $2,500 MXN before VAT, how much money do you save by buying it in Tijuana (8%) instead of Mexico City (16%)?
$200 MXN ($2,900 in CDMX vs $2,700 in Tijuana)?
Benchmark interest rate set by Banxico overnight to influence the cost of credit and inflation in the Mexican economy.
Interest Rate (or Reference Rate)
Formula to find the final amount M for C = 5,000 at an 8% annual rate compounded quarterly (n=4) for 3 years.
M = C(1 + i n)^nt or M = 5,000(1 + 0.084)^12?
Common error people make when trying to calculate the original price before IVA
subtracting 16% directly from the VAT-inclusive price
CONDUSEF website platform used to check complaints, sanctions, and ratings of banks before hiring a product.
Financial Entities Bureau (www.buro.gob.mx)
Exact mathematical operation to obtain the net price of a $10,800 MXN invoice issued at the border with an 8% IVA.
dividing $10,800 by 1.08 (Result: $10,000 MXN net)