Syllabus for Math 325 (Theory of Interest)

Fall 2022 Semester at Lycoming College


Course Content

The theory of interest in both finite and continuous time is explored together with some applications to economics and finance; specifically, these concepts are applied in the use of the various annuity functions and in the calculation of present and accumulated value for various streams of cash flows as basis for future use in reserving, valuation, pricing, duration, asset/liability management, investment income, capital budgeting, and contingencies.  Prerequisite: C or better in MATH 129.



Course Goals

Goals for this course include developing critical thinking skills, and the abilities to apply both the techniques of calculus (i.e., derivatives, integration, infinite series) and the available computer software (e.g., spreadsheets) with various annuity functions, and in the calculation of present and accumulated value for various streams of cash flows.



Who Should be Taking This Course

This course is designed to cover topics on one of the exams of the Society of Actuaries.  This course can be used as one of the requirements for the actuarial mathematics major and also as an elective requirement for the mathematics major.  The prerequisite for this course is a passing grade in MATH 129 (Calculus II).  Students who do not satisfy the course prerequisite will have their names removed from the roster.













Find your instructor’s office hours at , and write them here for future reference.





Tutoring is available this semester at the Math Center.



Disability Support Services

In keeping with the Americans with Disabilities Act (and its amendments) and Section 504 of the Rehabilitation Act, Lycoming College is committed to providing reasonable accommodations for students with documented disabilities that impact their learning experiences. The Office of Academic Services Deans coordinates disability support services (DSS), and students can contact (570) 321-4358 or to set up a confidential conversation about the disclosure and accommodation process. The Office of Academic Services Deans is located in the second floor of the Krapf Gateway Center. Further information regarding DSS is available at:



Required Materials

Each student must have

·      a copy of the textbook: The Theory of Interest, 3rd edition, by Stephen G. Kellison (ISBN: 978-007-127627 OR 978-0-07-338244-9, OR MHID: 007-127627-0)

·      a three-ring binder containing copy of this syllabus, the course schedule, class notes, completed assignments, etc. (Note: Since students will need to use this binder every day in class and will be allowed to use this binder for exams, the binders should be kept up-to-date and complete.)

·      a TI-84 calculator or a financial calculator is highly recommended (but other calculators may be satisfactory)

·      a computer account on the college network in order to access Excel and copies of several files which can be accessed as follows:

     Go to drive named Courses (L:) on the college network.

     Go to the folder named FAC_PRGS.

     Go to the folder named Sprechini.

     Go to the folder named MATH_325.



Course Links

Course Schedule

Free Tutoring

Some Well-Known Sums and Series

Amortization Table





Point Values and Policies


Homework assignments are posted on the course schedule.  Credit for some homework is given after answering the corresponding questions in Moodle, and credit for other homework is given after submitting the written work to the instructor.  Late work is never accepted for any reason.  If within 24 hours a student gives a legitimate reason (as judged by the instructor) for not submitting an assignment on time, an alternative assignment and due date may be given to allow student to earn the missed points; assignments not submitted should be completed for practice and answers checked with a classmate, a tutor, or the instructor.  Homework assignments count for 40% of the final grade; however, a student who misses submitting more than 10 homework assignments automatically fails the course.

Semester Tests

Several semester tests are given, one about every two or three weeks; specific dates are available from the course schedule.  For each missed test, a grade of zero is recorded, unless (1) the instructor is presented with documented evidence of a medical reason for not completing the test at the scheduled time, and (2) arrangements to make up the test are made within 24 hours of the originally scheduled exam time.  Semester exams count for 40% of the final grade.

Final Exam

The final exam (administered during final exam week) counts for 20% of the final grade.


The final course grade percentage is reduced by 4% for each unexcused absence after the third unexcused absence; an absence is considered to be excused when the instructor accepts an email from the student explaining the reason for the absence.  It is the student’s responsibility to find out what was missed in class and keep up with the coursework.  A student with more than 8 unexcused absences automatically fails the course.

Somewhere around 2700-3000 total points can be earned.  The course letter grade is determined from the percentage of points earned out of the total number of possible points as follows:


                                                              A = above 93.33%                                A– = 90% to 93.33%


          B+ = 86.67% to 90%                  B = 83.33% to 86.67%                               B– = 80% to 83.33%


          C+ = 76.67% to 80%                  C = 73.33% to 76.67%                               C– = 70% to 73.33%


          D+ = 66.67% to 70%                 D = 63.33% to 66.67%                               D– = 60% to 63.33%


                                                              F = below 60%



Tips for Success in This Course

(1) Keep up with the homework - understanding every homework assignment as completely as you can is the key to grasping the course material.  Even though there will be some homework assignments that you may not be required to submit, do them anyway, since they will help you master the material.  Check all your homework answers with a tutor before submitting an assignment.

(2) As part of your preparation for tests and the final exam, do all exercises suggested for practice by the instructor, and start working on these early; don't wait for the night before the test or exam.

(3) Get your questions answered quickly by the tutor, the course instructor, or a classmate.

(4) Keep your binder up-to-date and well-organized.



General Standards and Policies

          All work submitted must be of professional quality.  All paper must be neat, without ragged edges, rips, tears, smudges, stains, etc.  All answers must be clear, complete, and concise; handwriting must be legible.  If the instructor can't read it, it's wrong.  Assignments may be down-graded if these standards are not met.

          It can be very helpful for some students to work together on daily assignments and to study together; this is encouraged when it does not result in one student simply copying another's work with no understanding.  Acts of academic dishonesty will result in a grade of F for the course, and a letter to the Provost describing the circumstances.  If you are having problems in the course, talk to the instructor; don't involve yourself in academic dishonesty. With each assignment submitted, students are expected to write a short note at the end of the assignment indicating from whom help was received and to whom help was given (but this does not affect the grade for the assignment).  The following is from the FACULTY HANDBOOK in the section titled Student Course Load:


"It is expected that students will spend, in preparation for courses, two hours of study time outside the classroom for every hour of credit in the classroom."


This means that you should be prepared to spend, on average, eight hours per week outside of class working on a four-credit course; however, this will vary from student to student and from course to course.  Your time will be spent reading the text, reviewing class notes, and completing homework exercises.


If you encounter a problem while working on assignments, do not spend more than 20 or 30 minutes trying to solve the problem; if you cannot solve a problem in 20 or 30 minutes, even with the help of a tutor or classmate, work on something else and show the problem to the instructor of the course as soon as possible.