MATH 310 Theory of Interest
Fall 2016
Lecture #4: Discount, relationship between interest and discount, compound discount, nominal rate
of discount
Reading assignment: Broverman Sections 1.5-1.8
1
Discount
Say you borrow $1000 for one year at an annual ef

MATH 310 Theory of Interest
Fall 2016
Lecture #5: Measuring investment performance, cash flows, equations of value, internal rate of return
1
Measuring investment performance
In most investments, cash flows in and out of the investment account
over timede

MATH 310 Theory of Interest
Fall 2015
Lecture #2: APR vs. APY, nominal rates of interest, conversions, continuous compounding and the
force of interest
Reading assignment: Broverman Sections 1.4 and 1.6
1
APR vs. APY
Interest rates on consumer and mortgag

MATH 310 Theory of Interest
Fall 2016
Lecture #6: Internal rate of return, net present value method, dollar weighted rate of return
1
Internal rate of return: definition and theory
The IRR attempts to answer the question, What periodic yield rate am I
ear

MATH 310 Theory of Interest
Fall 2016
Lecture #1: Simple and compound interest, accumulation and amount functions, effective rates of
interest
Reading assignment: Broverman Sections 1.0, 1.1, 1.3, 1.4
1
Basics of Interest
Interest is sometimes called the

MATH 310 Theory of Interest
Fall 2016
Lecture #3: Force of interest
Reading assignment: Broverman Sections 1.4, 1.5, and 1.6
1
Force of interest
In the last lecture we talked about continuous compounding. For an annual
rate of 6% compounded continuously,