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Mathematical Interest Theory

A book by Leslie Jane Federer Vaaler

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An excellent choice for a textbook in the mathematics of finance

  • Jun 25, 2010
Rating:
+5
It would be interesting to know if the near financial collapse of late 2008, the subsequent public outrage and move to re-regulate the financial industry has led to an increase in the enrollment in courses in the mathematics of finance. The basic concept of human curiosity should drive an increased interest in how the financial industry works. This book will satisfy that curiosity.
Calculus is not used until the last chapter and then only slightly. The real mathematical prerequisite is the ability to engage and understand lengthy formulas, specifically those involving complex summations. Operationally, the formulas are executed using a Texas Instruments BA II Plus and there is an introductory chapter covering the basics of how to use one. Knowledge of the financial concepts of interest, annuities, loans, bonds, stocks, arbitrage and what drives changes in interest rates is also essential.
This book would be an excellent selection for a textbook in a course of the mathematics of finance. A large number of exercises appear at the end of the chapters and solutions t many of them appear in an appendix. The chapter headings are:

*) The growth of money
*) Equations of value and yield rates
*) Annuities
*) Annuities with different payment and conversion periods
*) Loan repayment
*) Bonds
*) Stocks and financial markets
*) Arbitrage, term structure of interest rates, and derivatives
*) Interest rate sensitivity

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About the reviewer
Charles Ashbacher ()
Ranked #78
Charlie Ashbacher is a compulsive reader and writer about many subjects. His prime areas of expertise are in mathematics and computers where he has taught every course in the mathematics and computer … more
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About this book

Wiki

This is an excellent book on interest theory, one of the four book recognized by the Society of Actuaries and Casualty Acruarial Society as a basis of study for the interest theory component of their joint FInancial Mathematics (FM) exam. What I particularly like about Mathematical Interest Theory is that many problems are intrinsically multi-stepped requiring use of several core functions. By providing a multitude of superior problems, the authors are able to familiarize the student not only with core actuarial function, but also develop their skills in studying the interaction between these functions and real-world problems. --Russell Jay Hendel, UMAP Journal

Students pursuing an actuarial career as well as those seeking a mathematically based finances course stand to benefit from this informative, up-to-date, and above all, skillfully written treatise. Instructors and students of interest theory owe Daniel and Vaaler a debt of gratitude for their fine efforts. --Susan Staples, Texas Christian University
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Tags

Books, Mathematics, Interest Rate, Risk Management, Interest Rates, Actuarial Science

Details

ISBN-10: 0883857545
ISBN-13: 978-0883857540
Author: Leslie Jane Federer Vaaler
Genre: Business & Investing
Publisher: Mathematical Association of America
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