Firstly, if you do something 'wrong' and get completely different answers, you can still earn marks for subsequent steps in the model, and you'll still earn marks for correctly & clearly describing your incorrect model. So it's possible to pass even if you get the model wrong.
However, it obviously makes it easier to pass if you can understand the calculations required, and do them correctly. Because this exam is really a communication paper, rather than a modelling paper, the point of it is to have a bit of modelling to do, and then allow you to communicate what you've done. So the modelling isn't intended to be overly tricky or difficult, and the examiners go to some length to try ensure that what is required is clear.
So the fact that you're having difficulty following this is a bit concerning. How much experience do you have? How many of the core technical subjects have you already passed? In days gone by, it was a requirement to have passed all of those before writing CP2 - that requirement has been dropped, but that level of knowledge is still assumed. The questions tend to be real-life examples from insurance, pension, or investment scenarios (or just ordinary business cashflow models), and if you're not familiar with those, it may well be worth waiting a year or two until you are before writing it.
Alternatively, I'd suggest doing as many past papers as you can under exam conditions, and discussing with a more experienced colleague at work about how you're doing.
