{"id":121,"date":"2023-10-27T08:34:20","date_gmt":"2023-10-27T08:34:20","guid":{"rendered":"https:\/\/openbook.ums.edu.my\/financialmathematicsineconomics\/back-matter\/appendix-2\/"},"modified":"2024-09-25T08:38:56","modified_gmt":"2024-09-25T08:38:56","slug":"appendix-2","status":"publish","type":"back-matter","link":"https:\/\/openbook.ums.edu.my\/financialmathematicsineconomics\/back-matter\/appendix-2\/","title":{"raw":"Appendix: Glossary of Formulas and Definitions","rendered":"Appendix: Glossary of Formulas and Definitions"},"content":{"raw":"\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n
No.<\/span><\/strong><\/td>\r\nFormula<\/span><\/strong><\/td>\r\nDefinition<\/span><\/strong><\/td>\r\n<\/tr>\r\n
1.<\/td>\r\n[latexpage] \\[\u00a0 I = P \\times r \\times t \\]<\/td>\r\nSimple interest<\/td>\r\n<\/tr>\r\n
2.<\/td>\r\n[latexpage]\r\n\\[\r\nS = P + I = P + (Prt) = P(1 + rt)\r\n\\]<\/td>\r\nFuture value of simple interest<\/td>\r\n<\/tr>\r\n
3.<\/td>\r\n\r\n

[latexpage]<\/p>\r\n\r\n

\\[\r\nP = \\frac{S}{1+rt}\r\n\\]<\/pre>\r\n<\/td>\r\n
Present value of simple interest<\/td>\r\n<\/tr>\r\n
4.<\/td>\r\n\r\n

P = S(1 - dt)<\/p>\r\n<\/td>\r\n

Present value of simple discount<\/td>\r\n<\/tr>\r\n
5.<\/td>\r\n\r\n

[latexpage]<\/p>\r\n\r\n

\\[ S = \\frac{P}{1-dt}\\]<\/pre>\r\n<\/td>\r\n
Future value of simple discount<\/td>\r\n<\/tr>\r\n
6.<\/td>\r\n$S = P(1 + i)^{n}$<\/td>\r\nCompound interest<\/td>\r\n<\/tr>\r\n
7.<\/td>\r\n$S = P(1 - \\frac{{d}^{m}}{m})^{-n}$<\/td>\r\nCompound discount at discount rate<\/td>\r\n<\/tr>\r\n
8.<\/td>\r\n$r_{E} = (1 + \\frac{r}{m})^{m} - 1$<\/td>\r\nEffective rate<\/td>\r\n<\/tr>\r\n
9.<\/td>\r\nD = Sdt<\/td>\r\nBank discount<\/td>\r\n<\/tr>\r\n
10.<\/td>\r\nList price x Discount rate<\/td>\r\nTrade discount<\/td>\r\n<\/tr>\r\n
11.<\/td>\r\n$s_{\\bar{n}\\mid{i}} = \\frac{(1+{i})^{n}-1}{i}$<\/td>\r\nFuture value of an ordinary annuity<\/td>\r\n<\/tr>\r\n
12.<\/td>\r\n$a_{\\bar{n}\\mid{i}} = \\frac{1-(1+{i})^{-n}}{i}$<\/td>\r\nPresent value of an ordinary annuity<\/td>\r\n<\/tr>\r\n
13.<\/td>\r\n$s_{\\ddot{n}\\mid{i}} = s_{\\bar{n}\\mid{i}}(1+i)$<\/td>\r\nFuture value of an annuity due<\/td>\r\n<\/tr>\r\n
14.<\/td>\r\n$a_{\\ddot{n}\\mid{i}}$ <\/em>= $a_{\\bar{n}\\mid{i}} (1+i)$<\/em><\/td>\r\nPresent value of an annuity due<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n ","rendered":"\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
No.<\/span><\/strong><\/td>\nFormula<\/span><\/strong><\/td>\nDefinition<\/span><\/strong><\/td>\n<\/tr>\n
1.<\/td>\n\n

  <\/span>   <\/span>\"\[ I = P \times r \times t \]\"<\/p>\n<\/td>\n

Simple interest<\/td>\n<\/tr>\n
2.<\/td>\n\n

  <\/span>   <\/span>\"\[<\/p>\n<\/td>\n

Future value of simple interest<\/td>\n<\/tr>\n
3.<\/td>\n\n

\n

   <\/span>   <\/span>\"\[<\/pre>\n<\/td>\n
Present value of simple interest<\/td>\n<\/tr>\n
4.<\/td>\n\n

P = S(1 – dt)<\/p>\n<\/td>\n

Present value of simple discount<\/td>\n<\/tr>\n
5.<\/td>\n\n

\n

   <\/span>   <\/span>\"\[ S = \frac{P}{1-dt}\]\"<\/pre>\n<\/td>\n
Future value of simple discount<\/td>\n<\/tr>\n
6.<\/td>\n\"S = P(1 + i)^{n}\"<\/td>\nCompound interest<\/td>\n<\/tr>\n
7.<\/td>\n\"S = P(1 - \frac{{d}^{m}}{m})^{-n}\"<\/td>\nCompound discount at discount rate<\/td>\n<\/tr>\n
8.<\/td>\n\"r_{E} = (1 + \frac{r}{m})^{m} - 1\"<\/td>\nEffective rate<\/td>\n<\/tr>\n
9.<\/td>\nD = Sdt<\/td>\nBank discount<\/td>\n<\/tr>\n
10.<\/td>\nList price x Discount rate<\/td>\nTrade discount<\/td>\n<\/tr>\n
11.<\/td>\n\"s_{\bar{n}\mid{i}} = \frac{(1+{i})^{n}-1}{i}\"<\/td>\nFuture value of an ordinary annuity<\/td>\n<\/tr>\n
12.<\/td>\n\"a_{\bar{n}\mid{i}} = \frac{1-(1+{i})^{-n}}{i}\"<\/td>\nPresent value of an ordinary annuity<\/td>\n<\/tr>\n
13.<\/td>\n\"s_{\ddot{n}\mid{i}} = s_{\bar{n}\mid{i}}(1+i)\"<\/td>\nFuture value of an annuity due<\/td>\n<\/tr>\n
14.<\/td>\n\"a_{\ddot{n}\mid{i}}\" <\/em>= \"a_{\bar{n}\mid{i}} (1+i)\"<\/em><\/td>\nPresent value of an annuity due<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

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