Classes are Tu-Th 10 - 11.15am in SEC 202.

My office is PGH 696 and Office hours are Tu - Th 1-2pm or by
appointment.

Office telephone is 713-743-3475.

The prerequisite for the class is Calculus II or equivalent.

That is you need to know about algebraic formulae, take
derivatives, use 1-variable calculus.

The aim of the course is to describe, understand and work
with the essential formulae for

calculations involving interest. There is no text-book for
the class but notes on many

topics will be posted here.

The course does not treat any probabilistic models. Rather it
treats financial models where an

outcome is "guaranteed". This means that one obtains formulae for
various situations

- such as mortgage or other loan interest payments - and then
looks at how the "numbers" change when

the conditions of the loan (interest rates, number of payments,
principal etc) change

The theory of compound interest is closely related to many
different issues related to exponential

growth and also to logarithms - which are the inverse functions to
exponential functions.

The course will concentrate on the valuation of loans,
mortgages and bonds of various types.

Spreadsheet modeling of bond payments and loans will be
described. Leverage calculations

and some portfolio analysis will be explained.

The course covers most of the topics in one of the first actuarial
exams.

The homework problems will require that you be able to work with
spreadsheets on a computer.

LibreOffice or Microsoft Excel are good choices

The answers to the first homework may be found here .

The grader's answers for Homeworks 2 and 3 are here and here.

There will be an,
in-class, mid-term exam on Tuesday October 17th and a (comprehensive)
final exam is

scheduled on Tuesday December 12th
from 11 to 1.30pm.
Homework sets will be given on a regular basis

and will require use of spreadsheet programs. Grades
will be based 30%
on homeworks, 30%
for the mid-term

exam and 40%
for the final exam. There will not be any make-up exams; see
me beforehand if you are likely

to have scheduling
conflicts for an exam.

program entails and how this course fits into the actuarial exams, look at the web page for the

UT actuarial program at

http://www.ma.utexas.edu/dev/actuarial/

If you have any questions, please call me at **713-743-3475 **or
send
e-mail to

**auchmuty@uh.edu.**