Financial Mathematics for Actuaries

ABOUT THE COURSE:Financial Mathematics for Actuaries introduces students to the fundamental principles of interest theory and time-value of money. The course equips learners with tools to analyze and solve problems involving accumulation, discounting, annuities, loans, bonds, and duration. Emphasis is placed on both conceptual understanding and practical problem-solving aligned with professional actuarial standards. By the end, students will be prepared to apply these concepts in finance, actuarial practice, and risk management contexts. INTENDED AUDIENCE:Upper‑UG students in Mathematics/Statistics/Economics/CS; actuarial aspirants; early‑career analysts.PREREQUISITES:Level 12th, Mathematics (basic level)INDUSTRY SUPPORT:Insurance and reinsurance (LIC, GIC Re, Swiss Re),actuarial consulting (EY, Deloitte, PwC), analytics/KPOfirms (Genpact, EXL).

Syllabus

Week 1:Time value of money; accumulation & discount factors.

Week 2:Nominal vs effective rates; force of interest.

Week 3:Equations of value; unknown n / i problems.
Week 4:Level annuities-immediate &-due; present vs accumulated value.
Week 5:Level annuities-immediate &-due; present vs accumulated value.
Week 6: Varying annuities (increasing/decreasing, arithmetic & geometric progression); deferred annuities.
Week 7:Loan amortisation: level payment schedules, interest-first vs principal-first methods.
Week 8:Sinking funds; outstanding balance by prospective & retrospective methods.
Week 9:Bond basics: price, redemption amount, coupon, book value; premium/discount theorems.
Week 10:Yield-to-maturity; callable bonds introduction.
Week 11:Duration and modified duration; convexity preview; immunisation intuition.
Week 12:Integrated review