Financial Mathematics I
- Credits: 6
- Ending: Examination
- Range: 2P + 2C
- Semester: winter
- Year: 3
- Faculty of Economic Informatics
Teachers
Included in study programs
Teaching results
Completion of the course Financial Mathematics I presupposes the development of financial thinking in time.
Knowledge and understanding
Progress in the field of new knowledge is evident after completing the course. Students will understand the dependence of capital on time, the principle of financial equivalence, annuities, the concept of current and future value of discrete and continuous financial flows and their valuation. They will also gain skills in constructing repayment plans for loans of various types.
Competence
Based on the above knowledge, students are able to solve the assigned tasks for current and future values of annuities in discrete and continuous interest rates, repayment of loans and valuation of financial flows within the new acquired competencies.
Skills
As part of the educational process, they will acquire such skills that will enable students to solve and become familiar with the functions of financial mathematics, in procedures involving the time structure of financial flows, repayment of loans and to be able to use the procedure of financial equivalence.
Indicative content
1. Interest rate and factors, interest theory
2. Constant, variable interest rate intensity, accumulation factor and value discounting
3. Valuation of financial flows, income equation of transaction, IRR
4. Annuity-certain and annuity-due, factor of present and future value
5. Deferred annuity, continuously paid annuity
6. Perpetuity certain, perpetuity due and continuously paid perpetuity
7. Unknown annuity interest rate, numerical methods
8. Arithmetically increasing annuity certain, annuity due and perpetuities
9. Annuities with continuous payments, geometrically increasing annuity
10. Annuity payable pthly, loan schedule for level annuity
11. Loan schedule for pthly annuity, low start loan
12. Impact of inflation, taxes and depreciation on investment projects
13. Time structure of interest rates, yield curve
Support literature
1. Pinda, Ľ.: Finančná matematika I. Letra Edu 2021, ISBN: 978-80-89962-82-2
2. Pinda, Ľ.: Finančná matematika investičných projektov. Bratislava: IURA EDITION, spol. s r.o. 2010, ISBN: 978-80-8078-319-8
3. Garrett, S. J.: An Introduction to the Mathematics of Finance. Oxford: Elsevier, Butterworth – Heinemann, 2013, ISBN: 978-0-08-098240-3
4. Ruckman, CH. - Fransis, J.: A Practical Guide for Actuaries and other Business Professionals. BPP Professional Education.2004, ISBN: 978-0975313602
Syllabus
1. Interest rate and factors, interest theory 2. Constant, variable interest rate intensity, accumulation factor and value discounting 3. Valuation of financial flows, income equation of transaction, IRR 4. Annuity-certain and annuity-due, factor of present and future value 5. Deferred annuity, continuously paid annuity 6. Perpetuity certain, perpetuity due and continuously paid perpetuity 7. Unknown annuity interest rate, numerical methods 8. Arithmetically increasing annuity certain, annuity due and perpetuities 9. Annuities with continuous payments, geometrically increasing annuity 10. Annuity payable pthly, loan schedule for level annuity 11. Loan schedule for pthly annuity, low start loan 12. Impact of inflation, taxes and depreciation on investment projects 13. Time structure of interest rates, yield curve
Requirements to complete the course
10% written work,
10% semester seminar work, resp. project,
10% continuous processing of tasks, worksheets resp. case studies.
70% written exam.
Student workload
26 hours of lectures,
26 hours of exercise,
65 hours of self-study in preparation for the exam,
13 hours preparation for seminars,
13 hours elaboration of a semester project,
13 hours preparation for written work.
Total loan( in hours): 156
Language whose command is required to complete the course
slovenský
Date of approval: 10.02.2023
Date of the latest change: 15.05.2022