Module: Mathematics of Finance: An Introduction

Module Specifications.

Current Academic Year 2024 - 2025

All Module information is indicative, and this portal is an interim interface pending the full upgrade of Coursebuilder and subsequent integration to the new DCU Student Information System (DCU Key).

As such, this is a point in time view of data which will be refreshed periodically. Some fields/data may not yet be available pending the completion of the full Coursebuilder upgrade and integration project. We will post status updates as they become available. Thank you for your patience and understanding.

Date posted: September 2024

Module Title	Mathematics of Finance: An Introduction
Module Code	MS216 (ITS) / MTH1038 (Banner)
Faculty	Science & Health	School	Mathematical Sciences
Module Co-ordinator	Mary Hall
Module Teachers	-
NFQ level	8	Credit Rating	5
Pre-requisite	Not Available
Co-requisite	Not Available
Compatibles	Not Available
Incompatibles	Not Available

None
Repeat of class test.

Description

MS216 aims to provide students with a grounding in elements of financial mathematics and its related applications, particularly the calculation of present and accumulated values for various streams of cash flows. Applications will include the use of a variety of annuity functions in loan calculations and investment project appraisal problems.

Learning Outcomes

1. Show how interest rates or discount rates may be expressed in terms of different time periods.
2. Calculate the present value and the accumulated value of a stream of equal or unequal payments using specified rates of interest, and the net present value at a real rate of interest, assuming a constant rate of inflation.
3. Define and use the more important compound interest functions including annuities certain.
4. Define an equation of value.
5. Describe how a loan may be repaid by regular instalments of interest and capital.
6. Apply discounted cashflow techniques to solve investment project appraisal problems.

*Type*	*Hours*	*Description*
Workload	Full-time hours per semester
Lecture	24	Lecture material on course content.
Tutorial	11	Tackle 4 tutorial sheets over the Semester.
Total Workload: 35

All module information is indicative and subject to change. For further information,students are advised to refer to the University's Marks and Standards and Programme Specific Regulations at: http://www.dcu.ie/registry/examinations/index.shtml

Indicative Content and Learning Activities

Interest Rates
Nominal and effective rates of interest and discount; constant force of interest; simple equations of value; yield.

Basic Compound Interest Functions
Level, deferred and increasing annuities; present and future values; equations of value and yield.

Loans
Loan schedules; present values and accumulations; APR.

Discounted Cash Flow
Net cash flows; comparison of investment projects; net present values; yields; discounted payback period; real and money interest rates.

Assessment Breakdown
Continuous Assessment	20%	Examination Weight	80%

Type	Description	% of total	Assessment Date
Course Work Breakdown
In Class Test	In-Class Test	20%	Week 10

Reassessment Requirement Type
Resit arrangements are explained by the following categories: Resit category 1: A resit is available for both* components of the module. Resit category 2: No resit is available for a 100% continuous assessment module. Resit category 3: No resit is available for the continuous assessment component where there is a continuous assessment and examination element.
* ‘Both’ is used in the context of the module having a Continuous Assessment/Examination split; where the module is 100% continuous assessment, there will also be a resit of the assessment
This module is category 1

Indicative Reading List

JJ McCutcheon and W E Scott: 1999, An Introduction to the Mathematics of Finance, Butterworth-Heinemann, 0 7506 0092

Other Resources

None