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Module Specifications

Archived Version 2020 - 2021

Module Title Mathematics of Finance:An Introduction
Module Code MS216
School School of Mathematical Sciences

Online Module Resources

Module Co-ordinatorProf John CarrollOffice NumberX139
NFQ level 8 Credit Rating 5
Pre-requisite None
Co-requisite None
Compatibles None
Incompatibles None
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.



Workload Full-time hours per semester
Type Hours Description
Lecture24Lecture material on course content.
Tutorial11Tackle 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. CT1: (i) to (iii)

Basic Compound Interest Functions
Level, deferred and increasing annuities; present and future values; equations of value and yield. CT1: (v) to (vii)

Loans & Annuities Payable pthly
Loan schedules; annuities payable phtly; present values and accumulations; APR. CT1: (vi) & (viii)

Discounted Cash Flow
Net cash flows; comparison of investment projects; net present values; yields; discounted payback period; real and money interest rates. CT1: (iv) & (ix)

Assessment Breakdown
Continuous Assessment100% Examination Weight0%
Course Work Breakdown
TypeDescription% of totalAssessment Date
Reassessment Requirement
Resit arrangements are explained by the following categories;
1 = A resit is available for all components of the module
2 = No resit is available for 100% continuous assessment module
3 = No resit is available for the continuous assessment component
Unavailable
Indicative Reading List

  • ActEd Study Materials: 0, Subject CT1 Course Notes, Actuarial Education Company,
  • JJ McCutcheon and W E Scott: 1999, An Introduction to the Mathematics of Finance, Butterworth-Heinemann, 0 7506 0092
Other Resources

33513, Webpage, John Carroll, 0, MS216 Lecture Notes & Slides, DCU, www.dcu.ie/~carrollj/ms216.html, 33514, Webpage, John Carroll, 0, Tutorial Sheets & Past Papers (with answers), www.dcu.ie/~carrollj/ms216.html,
Programme or List of Programmes
AFBA in Accounting and Finance
EPLBA in Economics, Politics and Law
EPLYABA in Economics, Politics and Law (Int)
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