In our daily lives, money is inevitable. They are people with cash surplus (excess money) and people with cash deficit (lack of money). Those who lack some money try to obtain financing with the lowest cost and those with excess money search for various investment alternatives offering the highest return. To help finding the best financing and investment, one should understand financial concepts covered in this book such as present value, future value, annuity, perpetuity, flat interest rate, effective interest rate, yield, return, and stock market index.
All chapters in this book were compiled from the author’s experiences as an investor in domestic and overseas capital market, financial planner/advisor, and finance manager at several institutions as well as a lecturer in financial mathematics and business mathematics for the last ten years. The Indonesian version of this book has been adopted as a main reference in many schools of business, management, and accounting at the faculty of economics nationwide and at the Department of Business Administration, the Faculty of Social and Political Sciences, University of Indonesia. At the Faculty of Economics, University of Indonesia, this book is used at the Diploma Program (D-III), the Undergraduate Program (S-1), and the Graduate Program (S-2) of the Management Department and Accounting Department.
Other than as a textbook in universities, this book is also aimed for investors, bankers, financial planners, and financial practitioners as well. Financial mathematics can be a useful guide for those who would like to study financial management and investment management.
Anyone having finished this book will find many financial calculations easy. With the knowledge of this book, they can be very skillful to do financial planning and to compute net present value (NPV) and internal rate of return (IRR) of a project, yield and return of investment, either in money market (short term) or in capital market (long term).