Financial Calculus

Bank Management and Administration, Publication in the Diário da República - Bolonha 2008/09 [DR. 20757/2008 07.08.2008]

5 ECTS; 2º Ano, 1º Semestre, 30,0 T + 30,0 P

Lecturer

Prerequisites
There are no prerequisites, however, it is recommended the previous frequency of Mathematics curricular units.

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
Frequency Assessment:
- Six Mini-tests during class period, with a quotation of 5 for each, which count to the final score the best four (40% of the final grade).
- A final test (60% of the final grade).
Score < 10 => Exam or Recourse Exam.

Bibliography
- Matias, R. (2015). Cálculo Financeiro, Teoria e Prática. Lisboa, Portugal: Escolar Editora
- Couto, E. e Crespo, N. e Barroso, M. (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
? Theoretic presentations by the teacher through expositive and interrogative methods, with the board support and with audiovisual support
? Resolution of practical exercises
? Realization for assessment of six "mini-tests" during the class period.

Software used in class
Not applicable.