Interest Rates and the Time Value of Money
Free SOA Exam FM (Financial Mathematics) lesson in Time Value of Money. 20 min read, ~2,958 words.
Compound interest is the FM default,. Use simple interest only when explicitly stated. Six rate symbols:,,,. Converting between them is the most tested mechanical skill. Discount factor appears in virtually every FM formula. Force of interest: constant; variable, integrate, then exponentiate. Real rate: exact formula, not.
Read the full lesson, free →
Worked examples, audio narration, and practice. No signup to read.
What this lesson covers
- Content
- Example 1
- Example 2
- Example 3
- Example 4
- Common Mistakes
- Key Takeaways
- Exam Shortcuts
Learning objectives
- 1a
Browse all free Exam FM lessons or jump into free Exam FM practice questions.