II. Course Title: Mathematics of Investment Pre-Requisite: Math 5
III. Course Description:
This course is designed to provide a basic course in theory and applications
on all kinds of business transactions involving: interest rates, annuities, bonds, depreciation, general annuity perpetuity, and amortization and sinking fund so that the students will be equipped with principles on investment and mathematical skills to be able to judge whether a potential investment will be profitable or not.
IV. Course Objectives:
At end of the course, the student should be able to:
Cognitive (Knowledge):1. list, discuss and differentiate all kinds of financial
transactions on different interest rates, annuities, bonds, deprecation, general annuity, and perpetuity. 2. translate and apply theories and principles in mathematics of investment in local international setting 3. criticize, synthesize and formulate financial transactions, which are beneficial to potential investors. Affective (Attitude): 1. develop a work attitude of doing things correctly, honestly and independently 2. generate more interest in studying mathematics of investment as a primary tool of the Business profession 3. gain trust and confidence in expressing one’s ideas and view without fear of rejection. Psychomotor (Skills):1. demonstrate mathematical skills in solving any problems on simple and compound interest and discounts, different kinds of annuities, bonds, depreciation, general annuity and perpetuity.
V. Course Outline No. of Hours
A. Simple Interest and Simple Discount 3
1. Differentiate Simple Interest and Simple Discount 2. Differentiate between ordinary interest and exact interest 3. Problems on Simple
B. Calculations of time between two days: 2
1. Actual method 2. Approximate method
C. Amount and Present value at Simple Interest 2
D. Simple Discount 1 E. Promissory Note 1 F. Meaning of Compound Interest and Simple Annuities 2 G. Finding Compound Amount, Compound Interest, 3 Present Value and Compound Discount H. Calculating: 4 1. Time and Interest Rate 2. Nominal and Effective Rates 3. Equivalent Rates I. Equation of Value 3 J. Introduction in the General Concepts in kinds of Annuity. 1 K. Finding amount of present value of an ordinary annuity 3 L. Meaning of terms and symbols on Simple Annuities 1 M. Computation of Periodic Payments 2 N. Finding the Amount and Present Value of an annuity 2 O. Finding the Interest Rate and Term of an Ordinary Annuity 3 P. Amortization and sinking Fund: 6 1. Definition 2. Preparation of Amortization Table 3. Preparation of Sinking Fund Table 4. Problem Solving Q. Bonds and Bond Valuation: 6 1. Definition 2. General Concepts 3. How to price bonds for sale 4. Determining flat price accrued interest and quoted price
R. Meaning and methods of depreciation 2
S. Perpetuity 2 T. General Annuities Amount and Present Value 3
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Total 54
VI. References
A. Books
Aduana, N.L. (2012) Mathematics of Investment: Procedural
Approach, C.& E Publishing Inc. Aice,Ma.T.(2010) Mathematics of Investments. Rex Bookstore, Nicanor Reyes, Manila. Phils. Sirug, W.S (2010) Mathematics of Investment, Revised Edition, Mindshapers Co. Inc. Intramuros, Manila.Phils Bautista,L.SM.(2010) Mathematis of Investment, 2nd Edition, C &E Publishing Inc. Young, Felina.C.(2009) Mathematics of Investments Made Smple 1 Rex Bookstore.Inc. Shestopaloff, Y.K (2009). Science of Inexact Mathematics of Investment Performance Measurement AKVY Press, Toronto, Canada
B. Web Resources
William L. Hart. Mathematics of Investment. Retrieved September
19, 2014 from https://archive.org/stream/mathematicsofinv004275mbp/mathe maticsofinv004275mbp_djvu.txt Edward Lewis Dodd,. Fundamentals in the Mathematics of Investment. University of Texas. Retrieved September 19, 2014 from: http://www.jstor.org/stable/2974341