[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"detail-sidebar-cat-0-en-105":3,"doc-seo-398721-105":59,"doc-detail-398721-en":131},{"code":4,"msg":5,"data":6},0,"success",[7,13,18,23,28,33,38,43,48,51,55],{"id":8,"doc_module":4,"doc_module_name":9,"category_name":10,"show_sort_weight":11,"slug":12},1,"Document","Story & Novel",90,"story-novel",{"id":14,"doc_module":4,"doc_module_name":9,"category_name":15,"show_sort_weight":16,"slug":17},2,"Literature",80,"literature",{"id":19,"doc_module":4,"doc_module_name":9,"category_name":20,"show_sort_weight":21,"slug":22},4,"Exam",70,"exam",{"id":24,"doc_module":4,"doc_module_name":9,"category_name":25,"show_sort_weight":26,"slug":27},5,"Comic",60,"comic",{"id":29,"doc_module":4,"doc_module_name":9,"category_name":30,"show_sort_weight":31,"slug":32},6,"Technology",50,"technology",{"id":34,"doc_module":4,"doc_module_name":9,"category_name":35,"show_sort_weight":36,"slug":37},7,"Healthcare",40,"healthcare",{"id":39,"doc_module":4,"doc_module_name":9,"category_name":40,"show_sort_weight":41,"slug":42},8,"Research & Report",30,"research-report",{"id":44,"doc_module":4,"doc_module_name":9,"category_name":45,"show_sort_weight":46,"slug":47},9,"Religion & Spirituality",20,"religion-spirituality",{"id":46,"doc_module":4,"doc_module_name":9,"category_name":49,"show_sort_weight":46,"slug":50},"World Cup","world-cup",{"id":52,"doc_module":4,"doc_module_name":9,"category_name":53,"show_sort_weight":52,"slug":54},10,"Lifestyle","lifestyle",{"id":56,"doc_module":4,"doc_module_name":9,"category_name":57,"show_sort_weight":24,"slug":58},19,"General","general",{"code":4,"msg":60,"data":61},"ok",{"site_id":62,"language":63,"slug":64,"title":65,"keywords":66,"description":67,"schema_data":68,"social_meta":124,"head_meta":126,"extra_data":128,"updated_unix":130},105,"en","a-basic-course-in-the-theory-of-interest-and-derivatives-actuarial-exam-fm2-study-guide","A Basic Course in the Theory of Interest and Derivatives - Actuarial Exam FM/2 - Study Guide","","Introductory course material for the theory of interest and annuity, designed for junior-level study of the mathematics of finance. Presents a structured progression from interest meaning, accumulation and amount functions, effective/nominal rates, and present value, through discounting, force of interest, and time-varying rates. Extends into annuity-immediate and annuity-due, deferred and perpetuities, solving for unknown payments or rates, and detailed analysis of varying and continuous annuities. Includes later coverage of discounted cash flow, IRR uniqueness, loan repayment methods, bond pricing, and interest-rate sensitivity measures.",{"@graph":69,"@context":123},[70,84,106],{"@type":71,"itemListElement":72},"BreadcrumbList",[73,77,79,82],{"item":74,"name":75,"@type":76,"position":8},"https://docshare.wps.com","Home","ListItem",{"item":78,"name":9,"@type":76,"position":14},"https://docshare.wps.com/document/",{"item":80,"name":20,"@type":76,"position":81},"https://docshare.wps.com/document/exam/",3,{"item":83,"name":65,"@type":76,"position":19},"https://docshare.wps.com/document/a-basic-course-in-the-theory-of-interest-and-derivatives-actuarial-exam-fm2-study-guide/398721/",{"url":83,"name":65,"@type":85,"image":86,"author":91,"headline":65,"publisher":94,"fileFormat":97,"inLanguage":63,"description":67,"dateModified":98,"datePublished":99,"encodingFormat":97,"isAccessibleForFree":100,"interactionStatistic":101},"DigitalDocument",{"url":87,"@type":88,"width":89,"height":90},"https://docshare.wps.com/thumbnails/a-basic-course-in-the-theory-of-interest-and-derivatives-actuarial-exam-fm2-study-guide/398721.png","ImageObject",300,407,{"name":92,"@type":93},"PakDamar76","Person",{"url":74,"name":95,"@type":96},"DocShare","Organization","application/pdf","2026-10-28","2026-09-27",true,{"@type":102,"interactionType":103,"userInteractionCount":105},"InteractionCounter",{"@type":104},"ViewAction",18,{"@type":107,"mainEntity":108},"FAQPage",[109,115,119],{"name":110,"@type":111,"acceptedAnswer":112},"Who is this course designed for and what level of math is expected?","Question",{"text":113,"@type":114},"It is designed for an introductory course in the theory of interest and annuity, suitable for a junior level course in the mathematics of finance.","Answer",{"name":116,"@type":111,"acceptedAnswer":117},"How should the study guide be used to learn the material efficiently?",{"text":118,"@type":114},"Read each section, work through the embedded examples, then attempt the problems. Answer keys are provided to check numerical answers.",{"name":120,"@type":111,"acceptedAnswer":121},"How are problems from previous actuarial exams identified?",{"text":122,"@type":114},"Problems taken from previous exams are indicated by the symbol z.","https://schema.org",{"og:url":83,"og:type":125,"og:title":65,"og:site_name":95,"og:description":67},"article",{"robots":127,"canonical":83},"index,follow",{"doc_id":129,"site_id":62},398721,1790555339,{"code":4,"msg":5,"data":132},{"doc_id":129,"user_id":133,"nickname":92,"user_avatar":134,"doc_module":4,"category_id":19,"category_name":20,"doc_title":65,"doc_description":67,"doc_content":135,"file_id":136,"file_url":137,"file_type":138,"file_size":139,"view_count":105,"is_deleted":4,"is_public":8,"is_downloadable":8,"audit_status":8,"page_count":140,"language":141,"language_code":63,"site_id":62,"html_lang":63,"table_of_contents":142,"faqs":143,"seo_title":144,"seo_description":67,"update_tm":145,"read_time":146,"preview_page_count":4},962090893057,"https://ap-avatar.wpscdn.com/davatar_155a257f0dc6eb9ab79c44ca47cae57d","A Basic Course in the Theory of Interest and Derivatives  \nMarkets:  \nA Preparation for the Actuarial Exam FM/2  \nMarcel B. Finan  \nArkansas Tech University  \n􀀍cAll Rights Reserved Preliminary Draft  \nLast updated  \nFebruary 27, 2011  \n2  \nIn memory of my parents  \nAugust 1, 2008 January 7, 2009  \nPreface  \nThis manuscripts is designed for an introductory course in the theory of interest and annuity. This manuscript is suitablefor a junior level course in the mathematics of 􀀌nance.  \nA calculator, such as TI BA II Plus, either the solar or battery version, will be useful in solving many of the problems in this book. A recommended resource link for the use of this calculator can be found at  \n[http://www.scribd.com/doc/517593/TI-BA-II-PLUS-MANUAL](http://www.scribd.com/doc/517593/TI-BA-II-PLUS-MANUAL).  \nThe recommended approach for using this book is to read each section, work on the embedded examples, and then try the problems. Answer keys are provided so that you check your numerical answers against the correct ones.  \nProblems taken from previous exams will be indicated by the symbol z:  \nThis manuscript can be used for personal use or class use, but not for commercial purposes. If you 􀀌nd any errors, I would appreciate hearing from you: m􀀌nan@atu.edu  \nThis project has been supported by a research grant from Arkansas Tech University.  \nMarcel B. Finan Russellville, Arkansas March 2009  \n4 PREFACE  \nContents  \nPreface 3  \nThe Basics of Interest Theory 9  \n1 The Meaning of Interest ................................... 10  \n2 Accumulation and Amount Functions ............................ 14  \n3 E􀀋ective Interest Rate (EIR) ................................ 22  \n4 Linear Accumulation Functions: Simple Interest ...................... 28  \n5 Date Conventions Under Simple Interest .......................... 35  \n6 Exponential Accumulation Functions: Compound Interest ................ 41  \n7 Present Value and Discount Functions ........................... 50  \n8 Interest in Advance: E􀀋ective Rate of Discount ...................... 56  \n9 Nominal Rates of Interest and Discount .......................... 66  \n10 Force of Interest: Continuous Compounding ....................... 78  \n11 Time Varying Interest Rates ................................ 93  \n12 Equations of Value and Time Diagrams .......................... 100  \n13 Solving for the Unknown Interest Rate .......................... 107  \n14 Solving for Unknown Time ................................. 116  \nThe Basics of Annuity Theory 143  \n15 Present and Accumulated Values of an Annuity-Immediate ............... 144  \n16 Annuity in Advance: Annuity Due ............................. 157  \n17 Annuity Values on Any Date: Deferred Annuity ..................... 168  \n18 Annuities with In􀀌nite Payments: Perpetuities ...................... 176  \n19 Solving for the Unknown Number of Payments of an Annuity .............. 184  \n20 Solving for the Unknown Rate of Interest of an Annuity ................. 192  \n21 Varying Interest of an Annuity ............................... 202  \n22 Annuities Payable at a Di􀀋erent Frequency than Interest is Convertible ........ 206  \n23 Analysis of Annuities Payable Less Frequently than Interest is Convertible ....... 210  \n6 CONTENTS  \n24 Analysis of Annuities Payable More Frequently than Interest is Convertible ...... 218  \n25 Continuous Annuities .................................... 228  \n26 Varying Annuity-Immediate ................................ 234  \n27 Varying Annuity-Due .................................... 249  \n28 Varying Annuities with Payments at a Di􀀋erent Frequency than Interest is Convertible 257  \n29 Continuous Varying Annuities ............................... 268  \nRate of Return of an Investment 275  \n30 Discounted Cash Flow Technique ............................. 276  \n31 Uniqueness of IRR ..................................... 285  \n32 Interest Reinvested at a Di􀀋erent Rate .......................... 292  \n33 Interest Measurement of a F","cbCaihkM6DQQAadB","https://ap.wps.com/l/cbCaihkM6DQQAadB","pdf",6815751,647,"English","# Preface\n# The Basics of Interest Theory\n## The Meaning of Interest\n## Accumulation and Amount Functions\n## Effective Interest Rate (EIR)\n## Linear Accumulation Functions: Simple Interest\n## Date Conventions Under Simple Interest\n## Exponential Accumulation Functions: Compound Interest\n## Present Value and Discount Functions\n## Interest in Advance: Effective Rate of Discount\n## Nominal Rates of Interest and Discount\n## Force of Interest: Continuous Compounding\n## Time Varying Interest Rates\n## Equations of Value and Time Diagrams\n## Solving for the Unknown Interest Rate\n## Solving for Unknown Time\n# The Basics of Annuity Theory\n## Present and Accumulated Values of an Annuity-Immediate\n## Annuity in Advance: Annuity Due\n## Annuity Values on Any Date: Deferred Annuity\n## Annuities with Infinite Payments: Perpetuities\n## Solving for the Unknown Number of Payments of an Annuity\n## Solving for the Unknown Rate of Interest of an Annuity\n## Varying Interest of an Annuity\n## Annuities Payable at a Different Frequency than Interest is Convertible\n## Analysis of Annuities Payable Less Frequently than Interest is Convertible\n# Rate of Return of an Investment\n## Discounted Cash Flow Technique\n## Uniqueness of IRR\n## Interest Reinvested at a Different Rate\n## Dollar-Weighted Interest Rate\n## Time-Weighted Rate of Interest\n# Bonds and Related Topics\n## Types of Bonds\n## Various Pricing Formulas of a Bond\n## Amortization of Premium or Discount\n## Valuation of Bonds Between Coupon Payment Dates\n# Loan Repayment Methods\n## Finding the Loan Balance Using Prospective and Retrospective Methods\n## Amortization Schedules\n## Sinking Fund Method\n## Loans Payable at a Different Frequency than Interest is Convertible\n# Measures of Interest Rate Sensitivity\n## Effect of Inflation on Interest Rates\n## Term Structure and Yield Curves\n## Macaulay and Modified Durations\n## Redington Immunization and Convexity","[{\"question\":\"Who is this course designed for and what level of math is expected?\",\"answer\":\"It is designed for an introductory course in the theory of interest and annuity, suitable for a junior level course in the mathematics of finance.\"},{\"question\":\"How should the study guide be used to learn the material efficiently?\",\"answer\":\"Read each section, work through the embedded examples, then attempt the problems. Answer keys are provided to check numerical answers.\"},{\"question\":\"How are problems from previous actuarial exams identified?\",\"answer\":\"Problems taken from previous exams are indicated by the symbol z.\"}]","A Basic Course in the Theory of Interest and Derivatives - Actuarial Exam FM/2 - Study Guide | PDF",1790488507,1630]