Students
ACST8081 – Mathematics of Finance
2026 – Session 1, In person-scheduled-weekday, North Ryde
General Information
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| Unit convenor and teaching staff |
Unit convenor and teaching staff
Jiwook Jang
|
|---|---|
| Credit points |
Credit points
10
|
| Prerequisites |
Prerequisites
Admission to MActPrac
|
| Corequisites |
Corequisites
|
| Co-badged status |
Co-badged status
|
| Unit description |
Unit description
This unit begins with coverage of the basics of data analysis and modelling. It continues with a rigorous mathematical development of compound interest theory, using calculus where appropriate, applying the theory to more complex financial problems. Topics include the force of interest and its relationship to interest rates, inflation and capital gains tax, discrete and continuous term certain annuities, project appraisal, loans, bonds, yield curves, matching and immunisation and the definitions of various insurance and annuity contracts. Students will be required to use an Excel spreadsheet to solve problems throughout the unit. The concepts developed in this unit are required in several subsequent units in the actuarial degree. Students gaining a credit average in both ACST8081 and ACST8082 (minimum mark of 60 on both units) will satisfy the requirements for exemption from the professional subject CM1 of the Actuaries Institute. |
Important Academic Dates
Information about important academic dates including deadlines for withdrawing from units are available at https://www.mq.edu.au/study/calendar-of-dates
Learning Outcomes
On successful completion of this unit, you will be able to:
- ULO1: Demonstrate an understanding of compound interest theory.
- ULO2: Identify and describe various types of annuities and apply them to solve complex financial problems involving annuities.
- ULO3: Apply the compound interest theory to a range of practical problems in finance, including loans, analysis of investment projects, valuation of fixed interest securities, yield curves, the no-arbitrage pricing method, forward contracts and immunisation theory.
- ULO4: Describe the basic principles of actuarial modelling.
- ULO5: Define simple life table functions and various assurance and annuity contracts.
- ULO6: Explain how the compound interest theory can be applied to a wide range of practical problems in financial mathematics.
General Assessment Information
Late Submission Penalties (written assessments)
If you submit your assessment late, 5% of the total possible marks will be deducted for each day (including weekends), up to 7 days. Submissions more than 7 days late will receive a mark of 0.
Example 1 (out of 100):
If you score 85/100 but submit 20 hours late, you will lose 5 marks and receive 80/100.
Example 2 (out of 30):
If you score 27/30 but submit 20 hours late, you will lose 1.5 marks and receive 25.5/30.
Extensions
Automatic short extension: Some assessments are eligible for automatic short extension. You can only apply for an automatic short extension before the due date.
Special Consideration: If you need more time due to serious issues and for any assessments that are not eligible for Short Extension, you must apply for Special Consideration. Need help? Review the Special Consideration page for further details.
Assessment Tasks
| Name | Weighting | Hurdle | Due | Groupwork/Individual | Short Extension | AI assisted? |
|---|---|---|---|---|---|---|
| Skills development: Quantitative analysis with Excel | 20% | No | 02/04/2026 | Individual | Yes | Open AI |
| Formal examination: Test | 20% | No | Tuesday 5 May 1:00pm | Individual | No | Observed |
| Formal examination | 60% | No | Examination Period | Individual | No | Observed |
Skills development: Quantitative analysis with Excel
Assessment Type 1: Problem-based task
Indicative Time on Task 2: 20 hours
Due: 02/04/2026
Weighting: 20%
Groupwork/Individual: Individual
Short extension 3: Yes
AI assisted?: Open AI
The purpose of this assessment is for you to develop expertise in solving complex financial problems in Excel.
You will apply compound interest theory to practical financial problems involving annuities using formulas in Excel.
Skills in focus:
- Digital skills
- Work readiness
- Discipline knowledge
Deliverable(s): Excel Spreadsheet
Individual assessment
On successful completion you will be able to:
- Demonstrate an understanding of compound interest theory.
- Identify and describe various types of annuities and apply them to solve complex financial problems involving annuities.
- Apply the compound interest theory to a range of practical problems in finance, including loans, analysis of investment projects, valuation of fixed interest securities, yield curves, the no-arbitrage pricing method, forward contracts and immunisation theory.
- Explain how the compound interest theory can be applied to a wide range of practical problems in financial mathematics.
Formal examination: Test
Assessment Type 1: Examination
Indicative Time on Task 2: 10 hours
Due: Tuesday 5 May 1:00pm
Weighting: 20%
Groupwork/Individual: Individual
Short extension 3: No
AI assisted?: Observed
The purpose of this assessment is for you to demonstrate your understanding and knowledge of key topics from the unit.
You will participate in a formal test. Feedback on your performance will help you assess your progress through the unit content.
Deliverable(s): Test
Individual assessment
On successful completion you will be able to:
- Demonstrate an understanding of compound interest theory.
- Identify and describe various types of annuities and apply them to solve complex financial problems involving annuities.
- Apply the compound interest theory to a range of practical problems in finance, including loans, analysis of investment projects, valuation of fixed interest securities, yield curves, the no-arbitrage pricing method, forward contracts and immunisation theory.
- Describe the basic principles of actuarial modelling.
Formal examination
Assessment Type 1: Examination
Indicative Time on Task 2: 28 hours
Due: Examination Period
Weighting: 60%
Groupwork/Individual: Individual
Short extension 3: No
AI assisted?: Observed
The purpose of this assessment is for you to formally demonstrate the expertise you have gained in this unit.
You will participate in a 3-hour exam held during the University Examination period. Important information about the exam will be made available on the unit iLearn page. You should also review the MQ Exams website for general tips.
Deliverable(s): Formal exam
Individual assessment
On successful completion you will be able to:
- Demonstrate an understanding of compound interest theory.
- Identify and describe various types of annuities and apply them to solve complex financial problems involving annuities.
- Apply the compound interest theory to a range of practical problems in finance, including loans, analysis of investment projects, valuation of fixed interest securities, yield curves, the no-arbitrage pricing method, forward contracts and immunisation theory.
- Describe the basic principles of actuarial modelling.
- Define simple life table functions and various assurance and annuity contracts.
- Explain how the compound interest theory can be applied to a wide range of practical problems in financial mathematics.
1 If you need help with your assignment, please contact:
- the academic teaching staff in your unit for guidance in understanding or completing this type of assessment
- the Writing Centre for academic skills support.
2 Indicative time-on-task is an estimate of the time required for completion of the assessment task and is subject to individual variation.
3 An automatic short extension is available for some assessments. Apply through the Service Connect Portal.
Delivery and Resources
There is no required textbook.
Unit materials are available for download from iLearn.
Students will be required to use iLearn, Excel and a non-programmable calculator.
Unit Schedule
1. Introduction to data analysis, Principles of actuarial modelling, Cash flow models
2. Interest rates
3. Discounting and accumulating
4. Level annuities
5. Varying annuities
6. Loan schedule (Assignment due - Thursday 2 April 11:55pm)
Semester Break
7. Project appraisal, Bonds, equity and property
8. Term structure of interest rates
Semester Break
9. Class Test (Tuesday 5 May 1:00-3:00pm), Forward contracts
10. Forward contracts, Bond statistics
11. Bond statistics, Immunisation
12. The life table; Assurance contracts
13. Annuity contracts; Revision
Policies and Procedures
Macquarie University policies and procedures are accessible from Policy Central (https://policies.mq.edu.au). Students should be aware of the following policies in particular with regard to Learning and Teaching:
- Academic Appeals Policy
- Academic Integrity Policy
- Academic Progression Policy
- Assessment Policy
- Fitness to Practice Procedure
- Assessment Procedure
- Complaints Resolution Procedure for Students and Members of the Public
- Special Consideration Policy
Students seeking more policy resources can visit Student Policies (https://students.mq.edu.au/support/study/policies). It is your one-stop-shop for the key policies you need to know about throughout your undergraduate student journey.
To find other policies relating to Teaching and Learning, visit Policy Central (https://policies.mq.edu.au) and use the search tool.
Student Code of Conduct
Macquarie University students have a responsibility to be familiar with the Student Code of Conduct: https://students.mq.edu.au/admin/other-resources/student-conduct
Results
Results published on platform other than eStudent, (eg. iLearn, Coursera etc.) or released directly by your Unit Convenor, are not confirmed as they are subject to final approval by the University. Once approved, final results will be sent to your student email address and will be made available in eStudent. For more information visit connect.mq.edu.au or if you are a Global MBA student contact globalmba.support@mq.edu.au
Academic Integrity
At Macquarie, we believe academic integrity – honesty, respect, trust, responsibility, fairness and courage – is at the core of learning, teaching and research. We recognise that meeting the expectations required to complete your assessments can be challenging. So, we offer you a range of resources and services to help you reach your potential, including free online writing and maths support, academic skills development and wellbeing consultations.
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IT Help
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Unit information based on version 2026.02 of the Handbook