Course 02

The value of money and interest

Understanding financial mathematics

What you will learn

• Explain why a sum of money depends on the date it is available.
• Identify the initial capital, the final capital, the rate and the duration.
• Calculate the interest in a simple-interest operation.
• Understand and calculate compound growth.
• Tell the difference between nominal, periodic and effective rates.
• Understand compounding frequency.
• Calculate a present value from a future amount.

• 1. The time value of money
• 2. Compounding and interest
• 3. Discounting
• 4. Spot rates, forward rates and the yield curve
• 5. Measuring returns
• 6. Summary, exercises and assessment

49 €