Mathematics of Finance & Investment

Objectives:
The aim of this course is to understand the basic concepts and principles in the calculation of simple and compound interest for the identification of investment alternatives and the selection of the best to streamline investment decisions.

Topics

1. Introduction and definitions 

1. The general law of simple interest

1. True and commercial interest

1. Present value and discount-the sum of annuities certain using fixed and variable simple interest rates

1. Some practical applications on simple interest including methods of redemption of short term loans, modification of  loans and saving accounts

1. The general law of compound interest: the sum, present values and discount –the nominal rate of compound interest

1. The calculation of the sum and present value of annuities –certain with fixed and variable compound rates of interest

1. The nominal Interest Rate (Inom), The Periodic Rate (Iper) and the Effective Annual Rate (EAR)