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An Introduction to the Mathematics of Finance

There is a concise but thorough treatment of the basic compound interest functions, nominal rate of interest, and the yield (or internal rate of return) and there are many examples… Read more

Description

There is a concise but thorough treatment of the basic compound interest functions, nominal rate of interest, and the yield (or internal rate of return) and there are many examples on discounted cash flow. Also discussed are applications of the theory to capital redemption policies (with allowance for income tax, capital gains tax and index-linking), and consumer credit calculations. The final chapter provides a simple introduction to stochastic interest rate models.

Table of contents

Preface; Theory of interest rates; The basic compound interest functions; Nominal rates of interest: annuities payable pthly; Discounted cash flow; Capital redemption policies; The valuation of securities; Capital gains tax; Cumulative sinking funds; Yield curves, discounted mean terms, matching, and immunization; Consumer credit; An introduction to stochastic interest rate models; Index.

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About the authors

JM

J J McCutcheon

Affiliations and expertise
Professor Emeritus, Heriot-Watt University

WS

W F Scott

Affiliations and expertise
Universities of Aberdeen and Edinburgh