Financial Mathematics Review Questions with Complete Solutions Rated 100%
9 views 0 purchase
Course
Financial Mathematics
Institution
Financial Mathematics
Financial Mathematics Review Questions with Complete Solutions Rated 100%
simple interest - Answers if the interest charged is base merely on the principal but is paid at the end of the term
focal date - Answers the point on the timeline when several pieces of money are valued in order to compar...
Financial Mathematics Review Questions with Complete Solutions Rated 100%
simple interest - Answers if the interest charged is base merely on the principal but is paid at the end of
the term
focal date - Answers the point on the timeline when several pieces of money are valued in order to
compare or add them (t=0)
time value of money - Answers the principle that, because of interest, the value of a given piece of
money changes as its location in the timeline changes, increasing when moved to the future and
decreasing when moved to the past
interest - Answers cost or charge for the use of borrowed money
principal - Answers amount of money invested or borrowed
interest rate - Answers percent of the principal that is the basis for the interest
term - Answers length of the loan in time units corresponding to the rate
promissory note - Answers document on which one party (the payer) writes his of her promise to pay
another party (the payee)the principal and interest for a loan due at some date in the future
maturity date - Answers the date that a promissory note or other maturing security must be repaid
maturity value - Answers the amount of money the borrower will pay back (principal + interest)
I = - Answers Pit
S = - Answers P(1 + it)
P = - Answers S/ (1 + it)
exact time - Answers everyday of the term except the first day (subtracting serial numbers)
approximate time - Answers each month is assumed to be 30 days
ordinary interest - Answers the length of a year is assumed to be 360 days
exact interest - Answers the length of a year is taken as 365 days
Banker's Rule - Answers exact time and ordinary interest; find serial numbers and subtract to find total
number of days then divide by 360 to find time
golden rule of finance - Answers monies cannot be added of compared unless they are valued at the
same point in time
average due date - Answers the date at which a single payment equal to the sum of several obligations
will discharge those obligations; not a function of the interest rate unless it is zero
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller TutorJosh. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $7.99. You're not tied to anything after your purchase.
