Understanding the Mathematics of Personal Finance (eBook)
264 Seiten
John Wiley & Sons (Verlag)
978-0-470-53838-8 (ISBN)
for calculating real costs and profits in personal finance
Understanding the Mathematics of Personal Finance
explains how mathematics, a simple calculator, and basic computer
spreadsheets can be used to break down and understand even the most
complex loan structures. In an easy-to-follow style, the book
clearly explains the workings of basic financial calculations,
captures the concepts behind loans and interest in a step-by-step
manner, and details how these steps can be implemented for
practical purposes. Rather than simply providing investment and
borrowing strategies, the author successfully equips readers with
the skills needed to make accurate and effective decisions in all
aspects of personal finance ventures, including mortgages,
annuities, life insurance, and credit card debt.
The book begins with a primer on mathematics, covering the
basics of arithmetic operations and notations, and proceeds to
explore the concepts of interest, simple interest, and compound
interest. Subsequent chapters illustrate the application of these
concepts to common types of personal finance exchanges,
including:
* Loan amortization and savings
* Mortgages, reverse mortgages, and viatical settlements
* Prepayment penalties
* Credit cards
The book provides readers with the tools needed to calculate
real costs and profits using various financial instruments.
Mathematically inclined readers will enjoy the inclusion of
mathematical derivations, but these sections are visually distinct
from the text and can be skipped without the loss of content or
complete understanding of the material. In addition, references to
online calculators and instructions for building the calculations
involved in a spreadsheet are provided. Furthermore, a related Web
site features additional problem sets, the spreadsheet calculators
that are referenced and used throughout the book, and links to
various other financial calculators.
Understanding the Mathematics of Personal Finance is an
excellent book for finance courses at the undergraduate level. It
is also an essential reference for individuals who are interested
in learning how to make effective financial decisions in their
everyday lives.
LAWRENCE N. DWORSKY, PhD, has previously served as a consultant for the Defense Advanced Research Projects Agency (DARPA), Littelfuse Corporation, HRL Laboratories, and Motorola, Inc., where he was a member of the Motorola Science Advisory Board. A Fellow of the Institute of Electrical and Electronic Engineers, Dr. Dworsky has written numerous journal articles and is the author of Probably Not: Future Prediction Using Probability and Statistical Inference, also published by Wiley.
Preface.
1. Background Mathematics.
Arithmetic, Notation and Formulas.
Minus Signs.
Lists and Subscripted Variables.
Changes.
Exponents.
Summations.
Graphs and Charts.
Approximations.
Rates - Average and Instantaneous.
Inequalities and Ranges of Numbers.
Figure Captions.
Tables.
Problems.
2. Compound Interest.
Some Mathematics.
My Website Spreadsheet.
On-Line Calculators.
Scaling.
Proration.
Initial Charges and Effective Interest Rate.
In the Limit - Continuous Compounding.
Figure Captions.
Tables.
Problems.
3. Loan Amortization and Savings.
Loans.
Calculating the Payment Amount.
Paying Off a Loan Very Slowly.
My Website Spreadsheet.
A Note About Total Interest For The Year.
On-Line Calculators.
Loans With First Payment Due Immediately.
Irregular Payments.
Regular Savings.
Figure Captions.
Tables.
Problems.
4. Mortgages.
On-Line Calculators.
Fixed Rate Mortgages.
Adjustable Rate Mortgages.
Balloon Loans.
Up-Front Costs.
Tables.
Problems.
5. Prepayment Penalties.
Rule of 78.
Other Prepayment Penalties.
Figure Captions.
Tables.
Problems.
6. Credit Cards.
Transfers.
Payment Allocation.
Daily Balance.
Some Calculation Examples.
Grace Period.
Changing Interest Rates.
A Bankruptcy Spiral.
Minimum Payment.
Other Interest Calculation Approaches.
Debit Cards.
Figure Captions.
Tables.
Problems.
7. Present Value.
On-Line Calculators.
Doing It With My Spreadsheet.
The Effect of Interest Rates on Present Value Calculations.
Why All This Matters.
A Very Involved Example, Writing Your Own Spreadsheet.
Future Value.
Present Value of Prepayment Penaltires.
Figure Captions.
Tables.
Problems.
8. Comparing Loans.
Up-Front Costs.
Adjustable Rate Mortgages.
A Few Last Words.
Tables.
Problems.
9. Taxation and Inflation.
Understanding Personal Federal Income Tax Rates.
On-Line Tax Calculators.
Taxation of Earned Interest.
Deductable Interest.
Deferred Taxation Savings.
On-Line Deferred Taxation Plan Calculators.
Inflation.
Figure Captions.
Tables.
Problems.
10. Life Insurance.
What is an insurance policy?
Probability.
Introduction to the Life Tables.
Expected Values.
Term Insurance.
Time Payments.
Decreasing Term Insurance.
Insurance for the Rest of Your Life.
Whole Life Insurance.
Breaking Down the Year.
Figure Captions.
Tables.
Problems.
11. Annuities.
A Benchmark Savings Plan.
Immediate Annuity With Period Certain.
Deferred Annuities.
Life Annuities.
Payments For Couples.
On-Line Calculators.
Variable Annuities.
Figure Captions.
Tables.
Problems.
12. Reverse Mortgages and Viatical Settlements.
Reverse Mortgages.
Viatical Settlements.
Figure Captions.
Tables.
Problems.
13. Investing, Risk and Return.
Stocks.
Portfolios.
Calculators.
Dollar Cost Averaging.
Short Sales.
Stock Dividends.
Bonds.
Options.
On-Line Calculators and Listings.
Ponzi Schemes and Other Scams.
Figure Captions.
Tables.
Problems.
14. Gambling.
Probability and Odds.
Probability and Expected Return.
Pari-mutuel Betting.
Figure Captions.
Tables.
Problems.
15. Spreadsheet Calculators.
Introduction to the Spreadsheets.
Some Programming Notes.
16. Problem Solutions.
| Erscheint lt. Verlag | 4.11.2009 |
|---|---|
| Sprache | englisch |
| Themenwelt | Sachbuch/Ratgeber ► Beruf / Finanzen / Recht / Wirtschaft ► Geld / Bank / Börse |
| Mathematik / Informatik ► Mathematik ► Statistik | |
| Mathematik / Informatik ► Mathematik ► Wahrscheinlichkeit / Kombinatorik | |
| Recht / Steuern ► Wirtschaftsrecht | |
| Technik | |
| Wirtschaft ► Betriebswirtschaft / Management | |
| Schlagworte | Business & Management • Business Statistics & Math • Finance & Investments • Finanz- u. Anlagewesen • Finanz- u. Wirtschaftsstatistik • personal finance • Private Finanzplanung • Statistics • Statistics for Finance, Business & Economics • Statistik • Wirtschaftsmathematik u. -statistik • Wirtschaft u. Management |
| ISBN-10 | 0-470-53838-4 / 0470538384 |
| ISBN-13 | 978-0-470-53838-8 / 9780470538388 |
| Haben Sie eine Frage zum Produkt? |
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