AMS 318
Prepared by Mu Tian
September 18, 2014
Homework #3
Due: Wednesday, September 24, at the end of class
* Please submit your solution with detailed steps
1. Rafael opens a savings account with a deposit of $1500. He deposits $500 one year later
and $
AMS 318
Prepared by Mu Tian
November 7, 2014
Homework #8
Due: Wednesday, November 19, at the end of class
* Please submit your solution with detailed steps
1. A $ 1000 bond with a coupon rate of 8% has quarterly coupons and is redeemable after
an unspecie
AMS 318
Sample Exam, Fall 2014
Oct 13 2014
Instructions:
1. You have 1 hours 30 minutes to do the exam.
2. There are 4 questions with a total of 100 points and 1 bonus question with 10 points.
3. The exam is closed book but you are allowed to have a calcu
AMS 318
Prepared by Mu Tian
November 6, 2014
Homework #8
Due: Wednesday, November 12, at the end of class
* Please submit your solution with detailed steps
1. A $ 1000 bond with a coupon rate of 8% has quarterly coupons and is redeemable after
an unspecie
AMS 318
Prepared by Mu Tian
September 10, 2014
Homework #2
Due: Wednesday, September 17, at the end of class
* Please submit your solution with detailed steps
1. The annual eective interest rate on Rogelios loan is 6.6%. What is the equivalent
nominal dis
AMS 318
Prepared by Mu Tian
September 17, 2014
Homework #3
Due: Wednesday, September 24, at the end of class
* Please submit your solution with detailed steps
1. Rafael opens a savings account with a deposit of $1500. He deposits $500 one year later
and $
AMS 318
Prepared by Mu Tian
August 27, 2014
Homework #1
Due: Wednesday, September 3rd, at the end of class
* Please submit your solution with detailed steps
1. Suppose a(t) = t2 + t + . If $100 invested at time 0 accumulates to $152 at time 4
and $200 inv
A Basic Course in the Theory of Interest and
Derivatives Markets:
A Preparation for the Actuarial Exam FM/2
Marcel B. Finan
Arkansas Tech University
c All Rights Reserved
Preliminary Draft
Last updated
March 7, 2015
2
In memory of my parents
August 1, 200
AMS 318 HW 5
October 10, 2012
3.3.4
Time line: From t = 0 until t = 29 he deposit $1200 every year. Interest rate
is i = 0.05. From t = 30 until t = 49 he withdraws Q every years. Interest
rate is i = 0.04. At t = 49 he exhausts his saving.
*Note: Since h
AMS 318
Prepared by Mu Tian
August 27, 2014
Homework #1
Due: Wednesday, September 3rd, at the end of class
* Please submit your solution with detailed steps
1. Suppose a(t) = t2 + t + . If $100 invested at time 0 accumulates to $152 at time 4
and $200 inv
AMS 318 hw6
1. 3.6.3
Overall, there are 15 12 = 180 payments, the last 10 12 = 120 are made when the annual eective rate
1
is 6%. The corresponding monthly eective interest rate is j = (1.06) 12 1 = 0.486755%. The level end-ofmonth payment is $1,692. When
AMS 318 HW 1
October 10, 2012
1.3.3
(t) = t2 + .01t + (0) =
Since (t) is an accumulation function, (0) = 1. Hence = 1.
The interest rate i1 for the rst year is 2%. The formula for i1 is: i1 =
(1) (0)
= (1) 1. So (1) 1 = 0.02 or (1) = 1.02. It follows tha
AMS 318 FINAL EXAM Tyler Mayer
7/1/2015 1:30PM i 4:45PM
Directions: this test is closed book and closed notes. You are allowed 1 lettersized page
of formulas to be turned in with the exam. You have approximately 3 hour and 15
minutes to complete the exam,
THE
THEORY
OF
INTEREST
Second Edition
STEPHEN G. KELLISON
Study Notes Prepared by
Kevin Shand, FSA, FCIA
Assistant Professor
Warren Centre for Actuarial
Studies and Research
Contents
1 The
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
1.9
1.10
1.11
Measurement of Inter
Financial Mathematics
for Actuaries
Chapter 1
Interest Accumulation and
Time Value of Money
1
Learning Objectives
1. Basic principles in calculation of interest accumulation
2. Simple and compound interest
3. Frequency of compounding
4. Eective rate of in
1
Exam FM questions
1. (# 12, May 2001). Bruce and Robbie each open up new bank accounts at time 0. Bruce
deposits 100 into his bank account, and Robbie deposits 50 into his. Each account earns
an annual eective discount rate of d. The amount of interest
AMS 318 Name:
Fall 2013 Test 2 SBU-ID:
Instructions: There are 100 total points. You have to show your work to receive credit. There
are 7 problems and you are responsible for checking that your exam is complete.
1. (10 points) You accept a loan of $150,0
AMS 318 Name:
Fall 2013 TEST 1 SBU ID:
Instructions: There are 100 total points. You have to show your work to receive credit.
There are 7 problems and you are responsible for checking that your exam is complete.
1. (15 points) Let a(t) = 1 + 0.02t2
(a) W
AMS 318
Prepared by Mu Tian
September 10, 2014
Homework #2
Due: Wednesday, September 17, at the end of class
* Please submit your solution with detailed steps
1. The annual eective interest rate on Rogelios loan is 6.6%. What is the equivalent
nominal dis
AMS 318
Prepared by Mu Tian
October 8, 2014
Homework #6
Due: Wednesday, October 15, at the end of class
* Please submit your solution with detailed steps
1. Copy and complete the following amortization table. Be careful to note that there is no
payment at
AMS 318
Prepared by Mu Tian
September 24, 2014
Homework #4
Due: Wednesday, October 1, at the end of class
* Please submit your solution with detailed steps
1. Elwood wishes to purchase a home. She has saved up $13200 for a down payment. Based
on her earni
AMS 318
Prepared by Mu Tian
October 8, 2014
Homework #5
Due: Wednesday, October 8, at the end of class
* Please submit your solution with detailed steps
1. Annual end-of-year deposits are made to a fund paying an annual eective rate of interest
of 6%. The
AMS 318
Prepared by Mu Tian
September 24, 2014
Homework #4
Due: Wednesday, October 1, at the end of class
* Please submit your solution with detailed steps
1. Elwood wishes to purchase a home. She has saved up $13200 for a down payment. Based
on her earni
AMS 318
Prepared by Mu Tian
October 2, 2014
Homework #5
Due: Wednesday, October 8, at the end of class
* Please submit your solution with detailed steps
1. Annual end-of-year deposits are made to a fund paying an annual eective rate of interest
of 6%. The
AMS 318
Prepared by Mu Tian
October 17, 2014
Homework #6
Due: Wednesday, October 15, at the end of class
* Please submit your solution with detailed steps
1. Copy and complete the following amortization table. Be careful to note that there is no
payment a
AMS 318
Prepared by Mu Tian
October 31, 2014
Homework #7
Due: Wednesday, November 5, at the end of class
* Please submit your solution with detailed steps
1. A 2500 6.5% eight-year bond has annual coupons. If it is purchased for 2590, the investor
will an
Chapter 2
Equations of value and yield rates
Equations of value
Dollar-weighted yield rate
Time-weighted yield rate
Equations of value and yield rates
22
Introduction
In Chapter 1, we see that the account balance equals AK (t) = Ka(t) when
the investm
Chapter Sixteen
Equilibrium
Market Equilibrium
A
market is in equilibrium when total
quantity demanded by buyers equals
total quantity supplied by sellers.
Market Equilibrium
Market
p
demand
q=D(p)
D(p)
Market Equilibrium
p
Market
supply
q=S(p)
S(p)
Marke
Chapter Fifteen
Market Demand
From Individual to Market Demand
Functions
Think
of an economy containing n
consumers, denoted by i = 1, ,n.
Consumer is ordinary demand
function for commodity j is
x*j i (p1 , p 2 , mi )
From Individual to Market Demand
Fu
Chapter Ten
Intertemporal Choice
Intertemporal Choice
Persons often receive income in
lumps; e.g. monthly salary.
How is a lump of income spread over
the following month (saving now for
consumption later)?
Or how is consumption financed by
borrowing now
AMS 318 Notes
Instructor: Tyler Mayer
12/8/2015
1
1
Chapter 3. Annuities
1.1
Introduction
Def 1.1: Annuity - a series of payments made at specific intervals for a specified amount of time.
Def 1.2: Annuity immediate - An annuity whose payments are made at