Financial Mathematics (ACTU 371)

Aim of the course:

This course introduces the student to the concepts and procedures of the time value of money calculations used in Mathematics of Finance. It gives an understanding of topics in interests, annuities and perpetuities, loan with amortization and sinking funds methods, bonds and related securities.

Topics that will be covered in the course:

Chapter 1: Time Value of Money

Rate of interest, simple interest, compound interest, force of interest, accumulation function, present value, future value, discount factor, discount rate, convertible m-thly, nominal rate, effective rate, inflation, equation of value

Chapter 2: Level Annuities

Annuity immediate, annuity due, perpetuity, perpetuity, annuity payable m-thly, annuity payable continuously.