Study Guide

Objectives (course unit)

This straightforward exercise based course provides the students with information and hands-on skills of selected fundamental parts of business mathematics.

The time value of money theory forms the foundation of the course. The predetermined main objectives for the students are to learn to apply the theory, solve problems and communicate the problems, their solutions as well as the achieved new understanding effectively.

After completing the course, the students will be able to:
• Identify opportunities for mathematical problem solving involved with the time value of money concept and theory.
• Find out the present and future values of invested money in different cases of compounding.
• Compare interest rates, returns on investments and cash flows utilizing the effective rate, present value and net present value concepts.
• Find out the present and future value as well as the periodic payment of an ordinary annuity.
• Prepare simple loan amortization schedules and calculate amortizations in MS Excel.
• Communicate mathematical problems, their solutions and interpretations briefly and informatively.

Content (course unit)

• What are the simple interest, growth percentage and sum of sequence all about?
• How are various compound interest and effective rate calculations solved?
• How are the present value and net present value (NPV) determined?
• What different types of annuities are there, and how are the periodic payment and the present and future values of an ordinary annuity determined?
• How can loan amortization schedules be prepared and loans become amortized?

Assessment criteria, satisfactory (1-2) (course unit)

The student is able to determine and use the concepts and methods of mathematics of finance. The student can solve basic level compound interest and present value problems. The student can take responsibility for any of his individual duties in routine mathematics of finance activities and is able to make some contribution in a group.

Assessment criteria, good (3-4) (course unit)

The student has the competence of explaining the concepts and methods of mathematics of finance and applying them in cases of reasonable difficulty. The student works actively and cooperates responsibly and constructively both individually and in a group. The student can solve compound interest, present value and annuity exercises and problems as well as interpret the answers for the benefit of business projects and activities. His/her courses of action are well justified.

Assessment criteria, excellent (5) (course unit)

The student can analyse mathematics of business exercises and work on related business cases
individually. The student is able to choose approaches and construct equations and formulas applying the assigned mathematics of finance theory skillfully. The student can produce analyses and correct solutions to compound interest, present value and annuity problems as well as interpret the answers profoundly for the benefit of business projects and activities. The student’s courses of action are very well justified, and he/she makes noticeable contribution to group work, cooperating responsibly, constructively and flexibly in a committed manner.

Location and time

Independent studying, Online kick off and 2 tutoring sessions. Moodle exam.

Exam schedules

Moodle exam (date notified in Moodle). Retake dates will be notified later.

Assessment methods and criteria

Evaluation will be based on the submitted exercises and the final exam.

Assessment scale

0-5

Teaching methods

Exercises independently and tutoring sessions in the classroom.

Learning materials

To be shared in the Moodle page of the course.

Student workload

2 credits = ca 53 hours of work.

Content scheduling

See contents and course objectives. The schedule will be published in Moodle.

Completion alternatives

Course can be completed independently. Two optional tutoring and recap sessions will be organized before the Moodle exam.