## Mathematics of Finance |

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### Common terms and phrases

accumulated amortization amount and present annual payment annual premium annual rent annuity due approximately binomial theorem book value bought Calculate cash colog cologarithm common logarithms compound amount compound interest computation Construct a schedule convertible monthly convertible quarterly convertible semi-annually corresponding cost debt decimal places denoted depreciation fund digits dividend rate effective rate endowment policy equivalent Example 1.-Find EXERCISE Find the amount Find the annual Find the compound Find the nominal Find the present Find the purchase force of interest formula geometric progression hence interest rate interpolation investment rate logarithms mantissa maturity method money is worth months multiplying ordinary annuity paid payable annually payable semi-annually period present value principal probability purchase price rate of interest redeemable redemption price scrap value simple interest sinking fund Solve table limit term wearing value

### Popular passages

Page 203 - The characteristic of a number less than 1 is found by subtracting from 9 the number of ciphers between the decimal point and the first significant digit, and writing — 10 after the result.

Page 201 - The power of 10, for a number less than 1, is negative and is one more than the number of zeros immediately following the decimal point in the original number.

Page 202 - The characteristic of the logarithm of a number less than 1 is negative, and is numerically one greater than the number of ciphers immediately following the decimal point.

Page 72 - Nominal rate. In finance, the rate that would be realized if the interest received at the end of each conversion Interval were not profitably invested until the end of the year, while the effective rate Is the total return on the unit principal for one year. (EB Skinner, p. 59) Nominal selling price (Aust.). See Declared selling price.

Page 8 - Days, Move the decimal point in the principal three places to the left, and multiply by one sixth the number of days.

Page 169 - ... naturally lead to the following definitions : The Favorable Cases are those in which an event can happen, or has happened in an extended number of cases. The Unfavorable Cases are those in which the event can fail to happen, or has failed to happen in an extended number of cases. The Probability that an event will happen is the ratio of the number of favorable cases to the whole number of cases. Evidently the probability that an event will not happen is the ratio of the number of unfavorable...

Page 12 - The total amount due at the end of the last period is called the compound amount. The difference between the compound amount and the original principal is called the compound interest.

Page 53 - The time between payments is the payment period, and the time from the beginning of the first payment period to the end of the last period is called the term of the annuity. The future value of the annuity, the final sum on deposit, is defined as the sum of the compound amounts of all the payments, compounded to the end of the term.

Page 55 - Now consider the general case of an annuity of 1 per annum for n years at rate i. The first payment of 1 made at the end of the first year will be at interest for n — 1 years and will accumulate to...

Page 201 - ... is independent of the position of the decimal point, and depends only on the sequence of digits in the number.