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Course Details
COURSE NAME Mathematics of Investment
COURSE DESCRIPTION This course provides the students with the basic understanding of the
applications of mathematical concepts and skills in economics, business and
accounting especially in terms of the use of mathematics in financial
transactions. It includes determining the time value of money using simple and
compound interest and discounting, amortization and sinking fund.
NUMBER OF UNITS 3 units (Lec.)
PREREQUISITE College and Advanced Algebra

B. Course Outcomes
At the end of this course, the students should be able to:
1. Differentiate simple interest from simple discount.
2. Compute simple interest using actual or approximate time.
3. Compute ordinary and exact interest.
4. Determine whether the promissory note is interest bearing or a non-interest bearing.
5. Solve problems on simple interest and simple discount using appropriate formulas.
6. Determines the compound amount and compound interest of an investment.
7. Computes the present value and compound discount.
8. Differentiates annuity certain from contingent annuity.
9. Computes for the amount, present value, periodic payment, interest rate, and term of annuity.
10. Computes for outstanding balance by either be prospective or retrospective method.
11. Constructs the sinking fund schedule.
12. Prepare schedule for the bond premium and discounts on bonds.
C. Course Outline
1-4 Simple Interest and Simple Discount
 Definition of terms
 Simple Interest
 Ordinary and Exact Interest
 Actual and Approximate Time
 Interests Between Dates
 Present Value
 Simple Discount
 Promissory Note
5-8 Compound Interest
 Definition of Terms
 Compound Amount and Compound Interest
 Present Value and Compound Discount
 Interest Rate
 Time
 Equivalent Rates
 Equations of Value
9-12 Simple Annuities
 Definition of Terms
 Two Groups of Annuities
 Classification of Simple Annuity
 Amount and Present Value of an Ordinary Annuity
 Periodic Payment of an Ordinary Annuity
 Interest Rate of an Annuity
 Term of an Annuity
 Amount, Presents Value and Periodic Payment of an Annuity Due
 Amount, Present Value and Periodic Payment of a Deferred Annuity
13-15 Amortization and Sinking Fund
 Definition of Terms
 Amortization of a Debt
 The Outstanding Balance
 Sinking Fund
16-18 Bonds
 Definition of Terms
 Bond Valuation
 Premium or Discount Equation
 Amortization of Premiums

D. Suggested Teaching Strategies

 Lectures, Forum, Class discussion, Group sharing, Oral reports
E. Suggested Assessment/Evaluation
 Quizzes, Performance task, long exams, major exam
F. References
 Cervillon, C., Aoanan, G.,,2003, Mathematics of Investment a work text, Philippines: Echanis
Press, Inc.