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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interest being compounded half yearly.

What is the compound interest on $15000/-$ at $12\%$ P.a for one and half years, interest being compounded half yearly? (Ans: $C I = 2865.24$) I Selected this Procedure to solve: If a sum of $x$ is lent for $h$ years at the rate of $y\%$ per annum…
user309295
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Financial Math, convertible quarterly with multiple cash flows

On April 1, 2006 Francine opened a savings account paying $9.2\%$ convertible quarterly with a deposit of $\$4500$. On October 1, 2007, she withdrew $\$2400$. On July 1, 2008, she deposited $\$3000$. What was the account balance on January 1, 2011?…
CcS
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3 answers

Interest Question

If somebody owes \$55k and pays it back in four years with 6.4% interest p.a, how much would it be if its compounded quarterly? So I used $$A=P(1+i/4)^{4(4)}$$ and plugged it in as $$A=55000(1+.064/4)^{16}$$ but my answer was \$591,000? And I'm…
Matthew
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1 answer

Question related to profit/loss.

Guys see this question: For what sum should goods worth Rs. 1150 be insured at 8% so that in case of loss the owner may recover the premium as well as the goods? I can't understand the meaning of the question. I don't want any hints or…
codetalker
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1 answer

YTM and YTC. how do you discount the coupon rate?

A corporation sold a 30-year bond with a coupon rate of 8% (4% semiannually) two years ago. The bonds are callable at 105% of par value 5 years after issue and 103% of par value 10 years after issue. The bonds are currently priced at 120% of par…
whoopcrack
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1 answer

Financial Math - Nominal and Effective Rates

I am currently studying for the actuarial exam FM with the mathematical interest theory textbook from MAA. I have been doing a bunch of problems and the one below is giving me a lot of trouble to figure out. I have tried defining the nominal…
user91178
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1 answer

Tax rate question

How do you solve this question? A company has taxable income $758,000. The federal tax is 35% of that portion left after the state tax has been paid. The state tax is 15% of that portion after federal tax has been paid. Find the federal and state…
T. Smith
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1 answer

Z_t is not a function

In your paper https://arxiv.org/pdf/1710.03870.pdf, at definition 4.0.3 page 12, I think there a little error. $$Z_t(\hat{Y}_0) = \begin{cases} 1, & A:=\bigcup_{k=1}^n\{R_t^{k,a}\ge 1\} \cap \bigcup_{k=1}^n\{R_t^{k,b}\ge 1\} \not=…
Jeremie
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1 answer

(Repost) Finance annual payment amount

Example 2.6 A business owner takes out a loan of 450'000 on January 1 at a fixed-interest rate of 9% per year. It is payable over 15 years level payments due on each December 31 for the first 14 years and a final payment of 50'000 due on December 31…
Jaehaerys
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Price-Volume-Mix Analysis in managerial accounting - choice of the right formula for mix

My question is about Price-Volume-Mix analysis in the area of managerial accounting or business controlling. Other people also call it profit-margin variance analysis, and other names might exist. But the goal of the analysis is to understand the…
Sean
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2 answers

How do I isolate for the interest with either the the future value or present value equations?

I'm having troubles understanding how to isolate for the interest with either the future value or present value equations. Say we know what $K$ and $n$ are, and I'm trying to find $j$: $$\frac{(1+j)^n-1}{j}=K$$ or $$\frac{1-v^n}{j} = K$$ where $v =…
user281096
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How much should they have in the account?

The Meek brothers are planning a trip around the world. They hope to work some as they go, but believe that they should have accessible $\$800$ per month so they can live in relative comfort for the year they plan to be gone. How much should they…
slor
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1 answer

Expected gain in holding one unit of share for two years

could you tell me how it will works mathematically, Share price of a company changes by increase of Rs.10 or decrease by Rs.10 with probability 0.5. The waiting time for a change to take place is exponentially distributed with expected waiting time…
Learner1
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3 answers

An Easy Calculation?

This should be easy. I've been assured that this is correct, but I don't see how. $\$40,000$ plus a $\$200.00$ administrative fee plus $3\%$ for four months on $\$40,200 = \$40,602$. I think it should be $40,000 + 200 + (0.03 \times 40,200 \times…
Jay Moché
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What if monthly contribution is taken into account

This it the formula for final value when there is no monthly contribution ! $$finalvalue={initial amount *{(1+rate of Interest )^ {(compoundfrequency∗years)}}\over compound frequency)}$$! What will be formula if monthly contribution is taken into…
Bharad Waj
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