Financial Calculus

Accounting
5 ECTS; 2º Ano, 1º Semestre, 60,0 TP

Lecturer
- Renato Heitor Correia Domingues

Prerequisites
There are no prerequisites but prior attendance of Mathematics modules would be a helpful foundation.

Objectives
- Calculate present and future values of one or more capitals, solving problems related to such operations;
- Equate and distinguish different types of annuities, solving problems;
- Solve problems attending to different payment modalities of a loan.

Program
1 ? Introduction
- Basic concepts.
- Interest rate and discount rate.
- Present value and future value.

2 - Capitalization processes
- Simple interest scheme.
- Banking discount and reform of trade bills.
- Compound interest scheme.
- Nominal and effective rates, proportional and equivalent rates.
- Current and real rates.
- Capitalization in the domain of continuous.

3.Annuities
- Concept and modalities.
- Annuities with constant terms.
- Entire and temporary annuities.
- Fractional and temporary annuities.
- Perpetual annuities.
- Annuities with terms in Arithmetic Progression.
- Annuities with terms in Geometric Progression.

4 - Loan amortizations
- Concept and modalities.
- Reimbursement in constant annuities.
- Reimbursement in constant periodic capital amortization.
- Other modalities and variants.
- Bond loans.

Evaluation Methodology
Midterm assessment:

2 interim tests weighing 30% each and final test 40%. All tests have a minimum grade of 7 points.
Approves the chair, who gets a weighted average equal to or greater than 10 values.



Midterm not assessment:
Written test (100%).

Bibliography
- Matias, R. (2015). Cálculo Financeiro, Teoria e Prática. Lisboa, Portugal: Escolar Editora
- Barroso, M. e Crespo, N. e Couto, E. (2009). Cálculo e Instrumentos Financeiros, da Prática para a Teoria. Lisboa, Portugal: Escolar Editora
- Quelhas, A. (2014). Manual de Matemática Financeira. Coimbra, Portugal: Livraria Almedina
- Rodrigues, A. e Nicolau, I. (2010). Elementos de Cálculo Financeiro. Lisboa, Portugal: Áreas Editora

Method of interaction
Traditional lecturing methods supported by audiovisual resources.
Resolution of practical exercises.
3 short class-tests during term-time.

Software used in class
Not applicable.