Teaching of financial mathematics using Maple

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Teaching of financial mathematics using Maple

• Roman HAEK, Vladimíra PETRÁKOVA
• University of South Bohemia in Ceské Budejovice,
  Pedagogical Faculty
• The Czech Republic

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Aim of the contribution

• To present first results of our project
• Multimedia tool for teaching of financial
  mathematics

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Motivation
To help our students to understand the core of
basic concepts of financial mathematics and to be
in touch with the newest financial products.
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Financial mathematics at our university
1) Special Bc. studying program Financial
mathematics which prepares students to work
in financial branch. 2) Studying program
Teaching of mathematics at grammar and
secondary school (In the Czech Republic
financial mathematics is included in
curricula of both grammar and secondary schools.
Like an up to date application of arithmetic
and geometric progression).
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Our experience with teaching of FM
Basic concepts - Simple interest, compound
interest, efficient interest rate - Savings -
Credits Mortgage credit, consumer lending,
credit card - Notes - Bonds, Stocks
Our experience Most of these concepts of
financial mathematics are difficult to
understand for students.
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Our decision

• To prepare a tool which enables students deeper
  insight into
• the basic concepts of FM.
• Demands
• interactivity
• topicality
• openness
• Solution
• Interactive web page (http// www.pf.jcu.cz/fim)
  with examples solved in Maple. Each of examples
  is (will be) accompanied with links to
  corresponding Maple document, Maplet and a file
  with the Maple code of solution.

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Use of the Maple software

• Advantages
• point and click mathematics enables to do own
  experiments
• without familiarity with syntax
• Maplets focused on particular quality
• Numerical solution of more complicated tasks
• - our university has the multiple licence of
  Maple
• Disadvantages
• Maplets run only on a computer with the Maple
  instalation

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Example Bonds
Selection of tasks should respect the next
rule We should not use the Maple software to
routine computing. We expect some benefits in
deeper understanding the subject. EXAMPLE The
bond with maturity term 10 years, face value
1000 EUR and coupon rate 10 was purchased for
the price of 900 EUR. - Calculate duration of
this bond. - Estimate a change in the bond price
corresponding with an increase in redemption
yield until maturity of bond by 3.