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Financial Mathematics I (ACTL20001)

Undergraduate level 2Points: 12.5On Campus (Parkville)

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Overview

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Semester 1
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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

Generic skills

  • 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: 20 March 2025