Mathematics Stack Exchange
Mathematics Stack Exchange

Questions tagged [finance]

Questions related to the various aspects of financial mathematics. Topics include option pricing, arbitrage theory, market completeness and stochastic analysis.

Mathematical finance, also known as quantitative finance, deal with finance and financial markets in a mathematical manner.

Some examples of mathematical finance are the fundamental theorem of asset pricing which provides the conditions for a market to be arbitrage-free and complete, and the Black–Scholes equation, which uses partial differential equations to describe the price of an option over time.

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2637 questions
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Gremlins are investing in stock

Gremlin Industries will pay a dividend of \$1.80 per share this year. It is expected that this dividend will grow by 4% each year in the future. The current price of gremlins stock is \$22.40 per share. What is Gremlin's equity cost of capital? The…
Jake Nagel
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Calculate present value for a recurring income

Say I have a recurring annual income of "i", it is annually readjusted by the interest of "r". The discount rate is "d". What is the formula to get the net present value assuming this income never ends?
Ricardo
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Finding the mortgage interest rate

Given the principal and term payment and number of terms, how can I calculate the interest rate of this mortgage? Been searching the internet for formulas, but to no avail. What is being calculated on the page linked to below is what I would like to…
totoro
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Calculating Upside Potential

I have a story problem in my finance class. I can't figure out how to determine if my math is correct or not. The problem is: You purchase stock for 0.015 (one and a half cent) per share. You purchased 7,500 shares. Several decades later you sell…
JQuery Mobile
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Accumulated value of annuity

An annuity pays 1 for the first n years, 2 for the second n years and 3 for the third n years with the effective annual interest rate $i$. Find the accumulated value of this annuity at time $3n$ directly and show that the accumulated value of this…
SpankyS
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Calculating duration and interest Rate for an investment

I'm trying to build a calculator to determine different Factors for specific Investments. I have a Formula to calculate the Grand Total, but I can't see any way to get either the Duration or the interest rate from this, as Long as there is both an…
Andy
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What is my interest rate?

Since my bank is not proud enough to display their interest rate on their home page anymore I am struggling to figure this out. I have an escrow account that looked like 639.14 960.77 1282.4 1604.03 1925.66 2247.29 639.14 960.77 …
Mike
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Bonds and zero rates

I don't get how to do this one, is a bond similar to compounding interest?
terrible at math
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Find sweet spot between 'Effect' and 'Resource Consumption'

This question is rather of economical nature. Let's say we have a function $f(x)$ that describes the result of some action depending on the amount of resource used $x$, for example: $$f(x)=\frac{300}{100+x}$$ The smaller the result, the…
Kagaratsch
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Future Values of Annuities

Michelle has decided to invest $3000 at the end of each year for the next five years in a saving account that pays 8% annually, compounded semi-annually. How much is the annuity worth after 5 years? (Hint: be careful, interest conversion period, and…
Rose
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Using Ito Formula to compute $E[cos(B_t)]$

During the semester my prof (for a basic Mathematical Finance course) gave us some more challenging type questions to think about if we plan to take future courses on the topic. One of the questions he told us to look at was $E[cos(B_t)]$. He said…
Math Student
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Annuity Future Value Factor

Question: How much money will you have at the end of four years if you deposit $1,000 a year (at the end of each year) into a bank account paying 10% interest? We could answer this by calculating the future value of each individual deposit: $$1000…
Emily
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Compound interest

I've watched the khan academy pre-calculus playlist about compound interest and constant e on youtube Khan Academy. First he said that you can compute the final payment like this: Let P = Principal, let r = interest rate in decimal, let t = time…
anonymous
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successive reduction percentage

I would like to aplly successively to reudction percentage to a price and I want to find the "global" reduction. Apply a reduction of 19.6% and a 20% is different to apply a reduction of 39.6%. So, i try to calculate the cumulative coefficient…
Raphaël
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Lump Sum + Series of Payments Future Value = X Amount

say I have $X saved already and I will from now on save a constant amount each year (Amount Y). I also want to have amount Z saved in the future. The question is how long do I need to save? I want to do the whole thing in excel with excel formulas…
Killerpixler
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