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Topics include compound interest functions; valuation of a series of payments, including where the cash flows and/or the force of interest are continuous functions of time; equations of value; financial analysis of loan contracts and investment projects; characteristics of major asset types.
Intended learning outcomes
- Apply relevant pre-requisite mathematical knowledge in the solution of a range of practical problems;
- Describe and apply the main methods of finding the accumulation or present value of money under simple and compound interest and discount;
- Derive and apply formulae to calculate the accumulation or discounted value of a series of payments, including the cases of continuous payments and variable interest rates
- Analyse and solve equations of value for rates of interest
- Construct and analyse a loan schedule, including cases when terms of a loan are altered;
- Show how discounted cashflow techniques can be used in investment project appraisal;
- Demonstrate a knowledge and understanding of real and money interest rates;
- Explain the key features of the main types of financial assets, including shares, bonds, property and derivatives
High level of development: written communication; problem solving; application of theory to practice; synthesis of data and other information; use of computer software.
Last updated: 10 December 2019