Loan Repayment & Bond Valuation Unit Review | Exam FM | Financial Mathematics - JK Math

Loan Repayment & Bond Valuation Unit 3 Review (Financial Mathematics)

In this video we review the concepts of Financial Mathematics regarding loan repayment (amortization) and bond valuation that I cover in lessons 20 through 24 of my FM video series. This includes level (and non-level) payment loan amortization, bond valuation, market price of bonds, amortization for bonds, and callable bonds. If you have not watched my lesson and examples videos on these topics, be sure to do that first!

This video series is designed to help students understand the concepts of mathematics of investment and credit, as well as provide a starting point in preparation for the Actuarial Exam FM (Financial Mathematics).

Financial Mathematics requires a proficient understanding of Calculus concepts such as derivative and integration techniques. This implies that a solid understanding in various algebra skills, including manipulating equations, basic factoring methods, solving logarithmic equations, and more, are also required to fully comprehend and learn the concepts of the Financial Mathematics course.

Video Chapters:
00:00:00 Unit 3 Topics (Intro)
00:01:51 Reviewing Formulas
00:27:39 Problem 1
00:35:41 Problem 2
00:49:14 Problem 3
00:59:11 Problem 4
01:07:37 Problem 5
01:21:11 Problem 6

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- Josh from JK Mathematics

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[JKMath]

►►📝Download my 6 Week Exam FM Studying Schedule for FREE here:

[EthanSims-jh]

Taking my first actuary exam in a month and it's been so difficult to find free high-quality resources out there to study. Thank you for your contribution! These videos have helped me tremendously.

[chrismarrone]

For the last problem what I did to find interest rate was 270.08(1+i)^9 = 384.40. I feel like that's an easier method considering the geometric relationship of the principal repaid column of an amortization table. Then you can take that answer and plug it into 384.40 = X(V^1 +V^2 +V^3) to find what the annual payment X is.

[makmak]

Hi Josh! I've been watching your videos and have been wondering where you generally get your sample questions from / how much they are based on the format of the exam's questions. Thanks!

[kunallobo]

Hey Josh, thanks to your videos I am finally able to pass the FM sample exams. I hope for the best in the real exam in a few weeks. Out of curiousity do you have any videos doing the SOA Probability exam that comes up next? Or do you have any recommendations of where to find similar resources on that one that you provided for FM.

[frest-kt]

Hi JK. I really like your content. I was wondering, what whiteboard software do you use?

[LeluchV-khlo]

For the 3rd problem, would it be correct if upon calculating the price of the bond using 50 as amount of coupons for a total of 40 coupons with the yield rate of 0.07 convertible semiannually and finding it to be 1351 to say it’s premium (1351>1000) so we calculate the price at the earliest date possible which is at t = 28?