Financial Mathematics Terms: Effective Versus Nominal Rates of Interest

One of the most confusing topics for many people when starting to learn about financial mathematics is the various ways of measuring compound interest.

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

New Video: Macaulay Duration is a Decreasing Function of the Coupon Rate r

Actuarial Exam 2/FM Prep, Video #166

Early today I posted my 166th video on problem solving for actuarial exam 2/FM (financial mathematics) on YouTube.

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 durationRead the rest