Introduction

Financial mathematics touches almost every transaction you make, from a bank fixed deposit to buying a home on loan. At its core lies one simple idea: money that belongs to one person can be temporarily used by someone else, in exchange for periodic payments — this is what makes interest possible, and interest underpins nearly every financial decision, whether you are saving, borrowing, or running an entire finance business on it. This chapter builds the essential toolkit for reasoning about money over time — starting with perpetuities and sinking funds, and going on to bond valuation, EMIs, growth rates, shares and deben …