Course title

Pre-requisite

Course description

Course Name:

Financial Algebra (MAT410)

Course Information:

This course is open to students in grades 11 and 12 who have completed Algebra 2.† The course is a full-year course and is offered for 1 credit.

Course Description:

Financial Algebra introduces students to the application and modeling of mathematics in the world of economics; business and finance with a critical thinking; analysis and problem-solving approach.† The class focuses on algebra; geometry and data and graphical analysis to help make logical and mathematically supported decisions in the real world.† Students will learn to apply skills already taught in previous algebra and geometry classes to economics and financial problems; with an introduction to Calculus and how it can be used to model real life problems.

This course provide an opportunity for students that are either:

• Interested in a program of study related to economics; business or finance.
• Not quite ready for the track of Honors Pre-Calculus/AP Calculus and would like a different option

Course Outline:

By the end of the course; students will:

• Have a sound understanding of mathematical techniques discussed above.
• Manipulate algebraic expressions including non-linear functions.
• Produce graphical illustrations of an algebraic expression.
• Solve simple simultaneous equation models algebraically and illustrate this solution.
• Make use of some basic principles of financial arithmetic in economic and financial problems.
• Formulate economic problems in mathematical terms and apply the tolls provided in the module for analyzing them.
• Demonstrate an understanding of many of the common functional forms used in economics and their derivatives.
• Apply the basic principles of maximization and minimization to optimization problems.
• Apply algebra (including matrices) and calculus to simple economic problems and models.
• Use integration techniques to calculate areas; including the amount of consumer surplus.
• Use the basic principles of calculus to differentiate functions and locate maximum and minimum values.
• Apply mathematical techniques to the study of economic models.
• Calculate present values and derive the effects on compound interest of different interest rates.
• Use economic theory to evaluate the results of mathematical problems and to consider whether they are realistic.
• Define and describe in detail the use of cash flow models; simple and compound rates of interest and discount as well as compare and distinguish between nominal and effective rates of interest and discount.
• Have a thorough knowledge of the various types of annuities and perpetuities and use them to solve financial transaction problems.
• Analyze in depth basic fixed interest financial transactions like Loan Valuation; Fixed Interest securities (e.g. Bonds) and employ the skills developed in this course to evaluate such transactions.† Incorporate the effects of taxation on such financial transactions.
• Explain the details of arbitrage and its use in the valuation of forward contracts.† Employ term structure of interest rates to calculate forward and spot rates.
• Define interest rate risk in terms of duration and convexity of fixed interest products.† Define immunization and assess its use in mitigating interest rate risk.
• Be able to communicate the basics of stochastic interest rate models and use it to evaluate simple cash flow models.

Textbooks/Resources:

• Amiran; Edoh Y.† Algebra and Calculus: Mathematical Modeling for Economics; Business and Finance

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School Country

School state

School city

School Address

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Requested competency code

Date submitted

Approved

Approved competency code

• MTHA
• 4 years of Math

Approved date

Online / Virtual