Bill Kinney's Blog on Mathematics, Applications, Life, and Christian Faith
Financial Mathematics is the study and use of algebra and calculus-related tools for modeling common financial transactions, including investments, loans, annuities, bonds, and stocks.
A coupon bond can be purchased as an investment that pays “coupons”, which are fixed amounts of money, at certain equally-spaced times during the term of the investment, plus a redemption … Read the rest
Terms like “effective interest rate”, “nominal interest rate”, “continuous interest rate”, and “real interest rate” show up in various articles and textbooks. Exploring the distinctions and relationships between effective and nominal interest rates is the … Read the rest
Wow! One-hundred and sixty-six videos on financial mathematics for actuaries?!?! Yes! This has been an almost two-year YouTube project so far. Here’s the video that I posted earlier today, about an advanced topic called Macaulay duration… Read the rest
I certainly get excited when items are on sale, though I am wary of situations where the original price might be high to begin with.
The mathematics of discounts can be confusing for many people. I once had a student who was very fast at … Read the rest
Functional-thinking is one key to doing many other useful things. Tools such as substitutions, the quadratic formula, and logarithms also come in handy.
These tools are used in engineering and science. For example, in the evaluation of useful integrals (such as those that come up in … Read the rest
It is of utmost importance to become comfortable with abstract ideas, symbols, and the mental manipulation of these things. You should know the rules of algebra so well that they become automatic. Furthermore, visual representations of the concepts are often essential to seeing why facts are true and … Read the rest
