Commercial Calculus

The lessons are theoretical and practical in nature. After explaining the concepts, the students are asked to apply them to a wide range of exercises. This is a teaching methodology that is widely applied in the field of business science.

In addition, the topics taught are illustrated using concrete situations from the life of organisations, which is also a common teaching practice in the field of business sciences.

The course aims to provide students with:

1) knowledge of the financial value of time;

2) understanding of the calculation methods inherent in active and passive financial operations;

3) learning about some of the financing methods available to organisations;

4) identifying the determining factors of the financial cost inherent in the various types of financing;

5) producing and interpreting maps and other documents relating to the various types of financing;

6) understanding of the concepts and calculation processes that are fundamental to the pursuit of knowledge in the financial area.

Classes are theoretical and practical in nature. After the essential theoretical concepts have been explained, the students are confronted with a wide range of practical exercises to be solved in class, and complementary exercises are proposed in order to consolidate these concepts. This type of methodology makes it possible to fulfil the previously stated objectives.

I. Capitalization and discount

1. Return, financial transactions, and interest rate

2. Capitalisation: simple interest, compound interest and continuous capitalisation

3. Discount operations: discount at simple interest and at compound interest

II. Interest rates

1. Main issues

2. Proportional and equivalent interest rates

3.Nominal and effective interest rates

4.Average rates

5.Gross and net interest rates

6.Annual percentual rate of charge

III. Sources of short-term finance

1.Discounting of securities: bills of exchange and promissory notes

2.Effective cost of banking discount

3.Roll-over

IV. Equivalence of capital

1.Equations of value

2.Evaluation rate

V. Annuities

1.Concept, characteristics and classification criteria

2.Two fundamental cases: discounted value and accumulated value of an annuity

3.Due, deferred and perpetual annuities

VI. Long-term sources of finance: classic loans

                1. Amortization of loans with periodic repayments and periodic instalments

                2.Amortization schedules