Course Outline For Mathematics For Finance

Course Number AcFn121
Course Title Mathematics for Finance

Degree Program BA degree in accounting and finance
Credits 4
Pre requisite None
At the end of this course, students should be able to
Course Objectives&  Differentiate the various techniques of mathematics that can be employed
Competences tobe in solving business problems
Acquired  Identify the way mathematical techniques are utilized
 Appreciate the importance of mathematics in solving real world business
problems
 Use different mathematical techniques for supporting managerial decisions
 Analyze real managerial problems using mathematical tools
Mathematics for Finance is one of the preliminary quantitative aids to decision
Course Description making that offers the decision-maker a method of evaluating every possible
alternative (act or course of action) by using various techniques to know the
potential outcomes. This course is designed to expose finance students to the
basic concepts and area of managerial application of mathematics for decision
making. Topics include: linear equations and their applications, matrix algebra
and its applications, Markov chain analysis, linear programming, mathematics of
finance, elements and application of calculus.
WEEKS Course Contents Reading
3 WEEKS 1. Linear Equations and Their Interpretative applications Bowen
{1ST,2ND & 3rd } 1.1. Linear Equations, Functions and Graphs (page 1- 51)
1.2. Applications of Linear Equations
1.2.1. Linear Cost Output Relations,
1.2.2. Cost, Total Revenue, and Total Profit
1.2.3. Break Even Analysis: Model and Solutions
3WEEKS 2. Matrix Algebra And Its Applications Bowen
{4TH ,5TH&6TH } 2.1. Matrix Concepts (Page 133-
2.2. Dimensions and Types of Matrix 186)
2.3. Matrix Operations and Techniques
2.4. Inverse of a Matrix
2.5. Matrix Applications
2.6. Solving Systems of Linear Equations
2.7. Markov Chains: Concepts, Models and Solutions
4 WEEKS 3. Introduction To Linear Programming Bowen (page
{7TH ,8TH&9TH } 3.1. Concepts 92-130 and
3.2. Formulation of Linear Programming Models 192-169)
3.3. The Maximization Problem
3.4. The Minimization Problem
3.5. Solution Approaches to Linear Programming Problem
3.5.1. Graphic Approach
3.5.2. Algebraic (Simplex) Approach
2 WEEKS 4. Mathematics Of Finance Highland
{7TH& 8TH } 4.1. Overview of exponential and logarithmic functions (page 427 -
4.2. Simple Interest and Discount 452 and 383-
4.2.1. Computing Simple Interest 423)
4.2.2. Promissory Notes and Bank Discount Bowen (page
4.3. Compound Interest 348-375)
4.3.1. Compound Amount (Maturity Value)
4.3.2. Present Value (Principal) of Compound Amount
4.3.3. Nominal and Effective Interest Rate
4.4. Ordinary Annuities
4.4.1. Sum of Ordinary Annuity
4.4.2. Sinking Fund Payments
4.4.3. Present Value of Ordinary Annuity
4.4.4. Amortization
4.5. Mortgage Payments
3 WEEKS 5. Elements and Applications of Calculus Bowen (page
{9TH,10TH & 11th } 5.1. Differential Calculus 506-559 and
5.1.1. Concept 685-740)
5.1.2. Rules of Differentiation
5.1.3. First and Second Derivative for Extreme
5.1.4. Business Application of Differential Calculus
5.1.5. Marginal Analysis
5.1.6. Optimization Problems
5.2. Integral Calculus
5.2.1. Concept
5.2.2. Indefinite and Definite Integration
5.2.3. Rules of Integration
5.2.4. Business Applications of Integral calculus
5.2.5. Finding Total functions
5.2.6. Area problems
Teaching/Learning The teaching and learning methodology include lecturing, discussions, problem
Methodology solving, and analysis. Take-home assignment will be given at the end of each
chapter for submission within a week. Solution to the assignments will be given
once assignments are collected. Cases with local relevance will also be given for
each chapter for group of students to present in a class room. The full and active
participation of students is highly encouraged.
Assessment/Evaluation The evaluation scheme will be as follows:

Component Weight coverage
Test 1 10% Chapter 1
Test 2 10% Chapter 2
Assignment 10 % Chapter 3 & 4
Assignment 10% Chapter 5
Quiz 1 10%
Final Exam 50% All chapters
Instructor He/she will come to the class regularly on time and deliverthe lecture in a well-
responsibility organized manner. Besides, at the endof each class he/she gives reading
assignment for the nextclass. He/she will make sure that proper assessments is
given. He/she is also responsible to give feedback for each assessment.
Student The success of this course depends on the students’ individual and collective
responsibility contribution to the class discussions. Students are expected to participate
voluntarily, or will be called upon, to contribute to set exercises and problems.
Students are also expected to read the assigned readings and prepare the cases
before each class so that they could contribute effectively to class discussions.
Students must attempt assignments by their own. Proficiency in this course
comes from individual knowledge and understanding. Copying the works of
others is considered as serious offence and leads to disciplinary actions.

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Course Number AcFn121

Course Title Mathematics for Finance

Assessment/Evaluation The evaluation scheme will be as follows:

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