TAILIEUCHUNG - Lecture Financial institutions, instruments and markets (6/e): Chapter 8 - Viney

Chapter 8 - Mathematics of finance: An introduction to basic concepts and calculations. After studying this chapter you will be able to understand and carry out simple interest calculations to determine. Understand and carry out compound interest calculations to determine. | Chapter 8 Mathematics of Finance: An Introduction to Basic Concepts and Calculations 8- Learning Objectives Understand and carry out simple interest calculations to determine: accumulated amount present value yields holding period yield Understand and carry out compound interest calculations to determine: accumulated amount (future value) present value present value of an annuity accumulated value of an annuity (future value) effective rate of interest 8- Chapter Organisation Simple Interest Simple interest accumulation Present value Yields Holding period yield Compound Interest Compound interest accumulation (future value) Present value Present value of an annuity Accumulated value of an annuity (future value) Effective rates of interest Summary 8- Simple Interest Introduction Focus is on the mathematical techniques for calculating the cost of borrowing and the return earned on an investment Table defines the symbols of various formulae Although symbols vary between textbooks, formulae are consistent 8- Simple Interest (cont.) 8- Simple Interest (cont.) Simple interest is interest paid on the original principal amount borrowed or invested The principal is the initial, or outstanding, amount borrowed or invested With simple interest, interest is not paid on previous interest 8- Simple interest accumulation The amount of interest paid on debt, or earned on a deposit is: () where: A is the principal d is the duration of the loan, expressed as the number of interest payment periods (usually one year) i is the interest rate, expressed as a decimal 8- Simple interest accumulation (cont.) Example 1: If $10 000 is borrowed for one year, and simple interest of 8% per annum is charged, the total amount of interest paid on the loan would be: I = A d/365 i = 10 000 365/365 = $800 Example 2: Had the same loan been for two years the total amount of interest paid would be: I = 10 000 730/365 = $1600

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• Simple interest
• Compound interest
• Financial institutions
• Financial Instruments
• Financial markets
• Financial system
• Practical business
• Math procedures
• Practical business math procedures
• Maturity value
• Simple interest formula
• Simple discount
• Continuous interest
• Continuous interest discounts
• Three factors
• The mathematics of money
• Core mathematical tools
• Lecture Engineering economy
• Engineering economy
• Bài giảng Kinh tế kỹ thuật
• The time value of money
• Computation of simple interest
• Accumulated interest
• Financial transactions
• Whole numbers
• Their applications
• Promissory notes
• Simple discount notes
• Cấu trúc tài chính
• Phân tích tài chính
• huy động vốn
• báo cáo tài chính
• cơ cấu tài sản
• kế toán tài chính
• Business math procedures
• Lecture Practical business math procedures
• Business math
• Toán kinh tế
• Contemporary business mathematics
• Business mathematics
• Installment purchases
• Financial statements
• International business
• Bài giảng Lãi đơn
• Lợi tức đơn
• Tỷ suất lợi tức
• Công thức tính lãi đơn
• Lãi suất tương đương
• Lãi suất trung bình
• Mathematics of finance