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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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Showing equation for credit spread

Question: Show that in general, we have s ≈ q × LGD. Where s= credit spread, q= one year risk neutral probability, and LGD is the loss given default.
user281831
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Number of Installment terms remaining

Consider an installment loan with the following details: Principal = $ 6,000 Rate = 9.99% Number of Terms = 60 Calculate monthly payment = $ 127.45 If the customer keeps making an equal payment of $ 127.45 every month, the loan is paid off in 60…
solver149
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Calculate when two growth rates intersect

If one publication has 15,000 subscribers and a growth rate of 15% (per year) and another publication has 20,000 subscribers and a growth rate of 4%, how long will it take the two to intersect? And how long do you calculate this?
Matt
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Mr Abdulla earns 25 750 after his salary increase of 8.5%. What did he earn before the increase?

I tried: $$25 750 × 100÷8.5 =2188,75$$ $$25 750 - 2188,75 =23 561,25$$
Izzie
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If I want to sell zero coupon bond before maturity what will it be the price for it?

Let's say I have 10yrs ZCB with a yield of 3% I hold the bond for one year what will be the price for my bond if I want to sell it ? thank you for the help.
user679611
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Loan - Early Repayment

I have been having some difficulties with figuring out how to calculate for early repayment. The question goes: You take a 6 year loan of $25,000 with 7% annual interest rate and quarterly payments starting end of year 1. I have solved for the…
strugglingstudent
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Future portfolio value with constant spending

If invested assets grow at rate r and you spend at constant rate s, both in continuous time, is there an analytical formula for the future value of a portfolio at time t? For example if you start with 100,000 dollars that would grow to 104,000…
Fortranner
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Formula to get price to sell at depending on margin

$sp$ = sell price $cp$ = cost price $p$ = profit $m$ = margin So to get $p,$ we do: $$sp - {sp\over6} - 0.08sp - 0.024sp - cp$$ or, with figures: $$12.99 - {12.99 \over6} - 12.99 \times0.08 - 12.99 \times0.024 - 8.63$$ This gives $0.84$ profit. To…
lotmids
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Financial Math Problem

Q: John is to invest $100 at the end of every 3 months for the next 12 yrs. 20 years from now he will retire. Calculate the amount of accumulated money he will have when he retires if the money is invested at 3.4% compounded quarterly. My…
Aurora
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Compounded Interest homework help problem!

How would I do the following problem: Jimmy opens a savings account with a X deposit at the beginning of the month. The account earns P% annual interest compounded monthly. At the beginning of each subsequent month, Jimmy deposits an additional $X.…
Patrick Hultquist
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How do I calculate a monthly payment from the *beginning* of the month?

I'm needing to calculate monthly payments -- but from the beginning of the month, as opposed to the end which appears to be standard. This is the standard monthly payment formula: $$M = P\frac{i(1+i)^n}{(1+i)^n-1}$$ (M=monthly payment, P=principal,…
Melissa N.
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How to Isolate y i formula

I have a formula $y-ya-x=0$ where y can be isolated to $y=-\frac{x}{a-1}$ (Thanks to wolframalpha). It have been a few years since i have been doing math, but i would like to know what the steps are in isolating y in this formula? The formula is…
Androme
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General Annuity practice question

I'm taking an introductory course in finance but I don't understand how to do this question: A used car may be purchased for 7600 cash or 600 down and 20 monthly payments of 400 each,the first payment to be made in 6 months. What annual effective…
Kaladin Stormblessed
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Find the present value of 300 pounds paid every 3 years

Using an interest rate of 7% per annum, find the present value of fifteen payments of amount £300 each payable every three years, with the first payment made at the end of the second year I thought this as equal to an annuity of 100 pounds payable in…
user641883
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Finding return from Newton's Formula

I have Newton's formula BMV = CF1 + CF2 + CF3 + .... + CFn + EMV -----. ----- ----- ----- (1+r)^t1 (1+r)^t2 (1+r)^t3 (1+r)^tn BMV -> Beginning Market Value, EMV -> Ending Market Value, CF…
Heartly Regis
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