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Mathematical Interest Theory: Second Edition

MAA Press: An Imprint of the American Mathematical Society
Now available in new edition: TEXT/57
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Mathematical Interest Theory: Second Edition
MAA Press: An Imprint of the American Mathematical Society
Now available in new edition: TEXT/57
• Book Details

AMS/MAA Textbooks
Volume: 142009; 475 pp

Now available in Third Edition: TEXT/57

Mathematical Interest Theory gives an introduction of how investments grow over time. This is done in a mathematically precise manner. The emphasis is on practical applications that give the reader a concrete understanding of why the various relationships should be true. Among the modern financial topics introduced are: arbitrage, options, futures, and swaps. The content of the book, along with an understanding of probability, will provide a solid foundation for readers embarking on actuarial careers. On the other hand, Mathematical Interest Theory is written for anyone who has a strong high-school algebra background and is interested in being an informed borrower or investor. The content is suitable for a mid-level or upper-level undergraduate course or a beginning graduate course.

Mathematical Interest Theory includes more than 240 carefully worked examples. There are over 430 problems, and numerical answers are included in an appendix. A companion student solution manual (see TEXT/15) has detailed solutions to the odd-numbered problems. Most of the examples involve computation, and detailed instruction is provided on how the Texas Instruments BA II Plus and BA II Plus Professional calculators can be used to efficiently solve the problems. This is important for readers wishing to pass the SOA/CAS joint financial mathematics exam FM/2. However, this part of the book can be skipped without disturbing the flow of the exposition.

Ancillaries:

• Chapters
• Chapter 0. An introduction to the Texas Instruments BA II Plus
• Chapter 1. The growth of money
• Chapter 2. Equations of value and yield rates
• Chapter 3. Annuities (annuities certain)
• Chapter 4. Annuities with different payment and conversion periods
• Chapter 5. Loan repayment
• Chapter 6. Bonds
• Chapter 7. Stocks and financial markets
• Chapter 8. Arbitrage, the term structure of interest rates, and derivatives
• Chapter 9. Interest rate sensitivity

• Reviews

• This is an excellent book on interest theory; one of the four books recognized by the Society of Actuaries and the Casualty Actuarial Society as a basis of study for the interest theory component of their joint Financial Mathematics (FM) exam. What I particularly like about 'Mathematical Interest Theory' is that many problems are intrinsically multi-stepped requiring use of several core functions. By providing a multitude of superior problems, the authors are able to familiarize the student, not only with core actuarial function, but also develop their skills in studying the interaction between these functions and real-world problems.

Russell Jay Hendel, UMAP Journal
• Students pursuing an actuarial career as well as those seeking a mathematically based finances course stand to benefit from this informative, up-to-date, and above all, skillfully written treatise. Instructors and students of interest theory owe Daniel and Vaaler a debt of gratitude for their fine efforts.

Susan Staples, Texas Christian University
• We use the Vaaler and Daniel text as our primary learning resource for actuarial science majors as they prepare for the SOA FM/CAS2 financial mathematics exam. Each concept is followed by several illustrative and detailed examples that help students master the big ideas in interest theory.

Mark Maxwell, Director of Actuarial Science, Robert Morris University
• Requests

Review Copy – for publishers of book reviews
Desk Copy – for instructors who have adopted an AMS textbook for a course
Examination Copy – for faculty considering an AMS textbook for a course
Accessibility – to request an alternate format of an AMS title
Volume: 142009; 475 pp

Now available in Third Edition: TEXT/57

Mathematical Interest Theory gives an introduction of how investments grow over time. This is done in a mathematically precise manner. The emphasis is on practical applications that give the reader a concrete understanding of why the various relationships should be true. Among the modern financial topics introduced are: arbitrage, options, futures, and swaps. The content of the book, along with an understanding of probability, will provide a solid foundation for readers embarking on actuarial careers. On the other hand, Mathematical Interest Theory is written for anyone who has a strong high-school algebra background and is interested in being an informed borrower or investor. The content is suitable for a mid-level or upper-level undergraduate course or a beginning graduate course.

Mathematical Interest Theory includes more than 240 carefully worked examples. There are over 430 problems, and numerical answers are included in an appendix. A companion student solution manual (see TEXT/15) has detailed solutions to the odd-numbered problems. Most of the examples involve computation, and detailed instruction is provided on how the Texas Instruments BA II Plus and BA II Plus Professional calculators can be used to efficiently solve the problems. This is important for readers wishing to pass the SOA/CAS joint financial mathematics exam FM/2. However, this part of the book can be skipped without disturbing the flow of the exposition.

Ancillaries:

• Chapters
• Chapter 0. An introduction to the Texas Instruments BA II Plus
• Chapter 1. The growth of money
• Chapter 2. Equations of value and yield rates
• Chapter 3. Annuities (annuities certain)
• Chapter 4. Annuities with different payment and conversion periods
• Chapter 5. Loan repayment
• Chapter 6. Bonds
• Chapter 7. Stocks and financial markets
• Chapter 8. Arbitrage, the term structure of interest rates, and derivatives
• Chapter 9. Interest rate sensitivity
• This is an excellent book on interest theory; one of the four books recognized by the Society of Actuaries and the Casualty Actuarial Society as a basis of study for the interest theory component of their joint Financial Mathematics (FM) exam. What I particularly like about 'Mathematical Interest Theory' is that many problems are intrinsically multi-stepped requiring use of several core functions. By providing a multitude of superior problems, the authors are able to familiarize the student, not only with core actuarial function, but also develop their skills in studying the interaction between these functions and real-world problems.

Russell Jay Hendel, UMAP Journal
• Students pursuing an actuarial career as well as those seeking a mathematically based finances course stand to benefit from this informative, up-to-date, and above all, skillfully written treatise. Instructors and students of interest theory owe Daniel and Vaaler a debt of gratitude for their fine efforts.

Susan Staples, Texas Christian University
• We use the Vaaler and Daniel text as our primary learning resource for actuarial science majors as they prepare for the SOA FM/CAS2 financial mathematics exam. Each concept is followed by several illustrative and detailed examples that help students master the big ideas in interest theory.

Mark Maxwell, Director of Actuarial Science, Robert Morris University
Review Copy – for publishers of book reviews
Desk Copy – for instructors who have adopted an AMS textbook for a course
Examination Copy – for faculty considering an AMS textbook for a course
Accessibility – to request an alternate format of an AMS title
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