FINANCIAL MATHEMATICS
(STAT 2032 / STAT 6046)
TUTORIAL SOLUTIONS WEEK 5
Question 1
Calculate values for the following functions:
a) a7 at interest rate of 7.5% per annum effective.
b) Ia 5 at interest
STAT2032/6046 - Solutions to Mid-Semester Examination First Semester 2013
1
Question 1 (12 marks)
(a) (i) [2 marks] Show that at a nominal interest rate of i(m) per annum
convertible m times per year,
STAT2032/6046 - Solutions to Selected Questions - Lecture
Week 5
1. For a price of $100, you receive monthly interest payments of $1 in
arrears for 5 years and a lump sum payment of $X at the end of 5
FINANCIAL MATHEMATICS
(STAT 2032 / STAT 6046)
TUTORIAL SOLUTIONS WEEK 3
Question 1
Find the present value of 1000 due at the end of 10 years if
(a) i (2) = 0.09 , (b) i (6) = 0.09 , and (c) i (12) = 0
FINANCIAL MATHEMATICS
STAT 2032 / STAT 6046
LECTURE NOTES WEEK 4
PERPETUITIES
An annuity where payments continue forever is called a perpetuity.
The present value of a perpetuity where 1 is payable at
STAT 2032/6046:
Financial Mathematics
Abhinav Mehta
Week 2
Question
What deposit made today will provide for a payment of $1000 in
1 year and $2000 in 3 years, if the effective compound rate of
intere
FINANCIAL MATHEMATICS
STAT 2032 / STAT 6046
LECTURE NOTES WEEK 3
SUMMARY OF FORMULAE
The important relationships between the variables introduced so far are given below. These
also appear on page 1 of
FINANCIAL MATHEMATICS
STAT 2032 / STAT 6046
LECTURE NOTES WEEK 2
NOMINAL RATES OF INTEREST
For contracts where interest payments are credited or compounded more frequently than once
a year, eg monthly
FINANCIAL MATHEMATICS
STAT 2032 / STAT 6046
LECTURE NOTES WEEK 1
CASH FLOW MODELS
A cash flow model is a mathematical projection of payments arising from a financial
contract or block of contracts.
Pa
RESEARCH SCHOOL OF FINANCE, ACTUARIAL STUDIES
AND APPLIED STATISTICS
FINANCIAL MATHEMATICS
(STAT 2032 / STAT 6046)
TUTORIAL SOLUTIONS WEEK 6
Question 1
The present value of two payments of $100 each t
FINANCIAL MATHEMATICS
STAT 2032 / STAT 6046
LECTURE NOTES WEEK 7
MEASURING INVESTMENT PERFORMANCE
It is often necessary to be able to measure the investment performance of a fund over a
period.
Fund v
FINANCIAL MATHEMATICS
STAT 2032 / STAT 6046
LECTURE NOTES WEEK 8
FIXED INTEREST SECURITIES
Governments and corporations will often wish to raise or borrow money from investors to
fund their spending p
FINANCIAL MATHEMATICS
STAT 2032 / STAT 6046
LECTURE NOTES WEEK 5
EQUATIONS OF VALUE
Cash flow models were briefly introduced in week 1. Recapping, in a cash flow model
payments received are income and
FINANCIAL MATHEMATICS
STAT 2032 / STAT 6046
LECTURE NOTES WEEK 3
SUMMARY OF FORMULAE
The important relationships between the variables introduced so far are given below. These
also appear on page 1 of
FINANCIAL MATHEMATICS
STAT 2032 / STAT 6046
LECTURE NOTES WEEK 6
LOAN REPAYMENTS
A common transaction involving compound interest is a loan that is repaid by regular
instalments, at a fixed rate of in
Australian National University
Research School of Finance, Actuarial Studies and
Applied Statistics
STAT2032/6046: Financial Mathematics
Review Questions (Week 4 Week 6)
WEEK 4
Question 1
Evaluate the
Australian National University
Research School of Finance, Actuarial Studies and
Applied Statistics
STAT2032/6046: Financial Mathematics
Review Questions (Week 7 Week 9)
WEEK 7
Question 1
Deposits of
STAT2032/6046 - Solutions to Additional Questions Lecture Week 3
1. A debt collection agency pays a doctor $5,000 for invoices that the doctor has not
been able to collect on. After two years, the col
STAT2032/6046 - Solutions to Additional Questions Lecture Week 1
1. An investment of $50 grows to $X at an effective simple rate of 10% per annum.
After 20 years the value of this investment is:
a. $2
Australian National University
Research School of Finance, Actuarial Studies and
Applied Statistics
STAT2032/6046: Financial Mathematics
Review Questions (Week 10 Week 12)
WEEK 10
Question 1
On 1 Janu
THE AUSTRALIAN NATIONAL UNIVERSITY
SCHOOL OF FINANCE, ACTUARIAL STUDIES
AND APPLIED STATISTICS
FINANCIAL MATHEMATICS (STAT 2032 / STAT 6046)
ASSIGNMENT SOLUTIONS
Solution to (a)
Since we are working i
FINANCIAL MATHEMATICS
(STAT 2032 / STAT 6046)
TUTORIAL SOLUTIONS WEEK 6
Question 1
The present value of two payments of $100 each to be made at the end of n years and 2n
years is $100. If i=0.08, find
FINANCIAL MATHEMATICS
(STAT 2032 / STAT 6046)
TUTORIAL SOLUTIONS WEEK 2
Question 1
$2,500 is invested. Find the accumulated value of the investment 10 years after it is made
for each of the following
THE AUSTRALIAN NATIONAL UNIVERSITY
RESEARCH SCHOOL OF FINANCE, ACTUARIAL STUDIES
AND STATISTICS
FINANCIAL MATHEMATICS (STAT2032 / STAT6046)
SEMESTER 1, 2017
ASSIGNMENT
Due Date: Friday 19 May 2017 by
THE AUSTRALIAN NATIONAL UNIVERSITY
RESEARCH SCHOOL OF FINANCE, ACTUARIAL STUDIES
AND STATISTICS
FINANCIAL MATHEMATICS (STAT2032 / STAT6046)
SEMESTER 2, 2017
ASSIGNMENT
Due Date: Thursday 20 October 20
FINANCIAL MATHEMATICS
STAT 2032 / STAT 6046
LECTURE NOTES WEEK 3
SUMMARY OF FORMULAE
The important relationships between the variables introduced so far are given below.
These also appear on page 1 of
FINANCIAL MATHEMATICS
STAT 2032 / STAT 6046
LECTURE NOTES WEEK 4
PERPETUITIES
An annuity where payments continue forever is called a perpetuity.
The present value of a perpetuity where 1 is payable at
STAT2032/6046:
Financial Mathematics
Bronwyn Loong
Lectures Week 7
Capital budgeting - comparing investment projects
Criteria for comparison:
Accumulated prot
Net present value
Internal rates of re
FINANCIAL MATHEMATICS
STAT 2032 / STAT 6046
LECTURE NOTES WEEK 5
EQUATIONS OF VALUE
Cash flow models were briefly introduced in week 1. Recapping, in a cash flow model
payments received are income and
REVIEW OF MATHEMATICS
Natural Logarithms
1. ln( xy ) =ln( x )+ln(y )
x
2. ln =ln( x )ln(y )
y
( )
3. ln x n = nln( x )
( )
4. ln e x = e
ln( x )
=x
Exponents
1. x m x n = x m+n