Summer Research Proposal

Mathematics of Investing

by

Tom Wilkening

Summer 2000

Faculty Advisors: David Lovelock, Larry Wright

Faculty members Lovelock, Mendel, and Wright are creating materials for a new mathematics course entitled An Introduction to the Mathematics of Investing, to be offered to juniors in science, engineering, and mathematics in Spring 2001. This course will introduce various mathematical ideas using investing as the vehicle.

With my background in both Mathematics and Finance I find the prospect of working with these materials both stimulating and educational. Because there is no appropriate textbook in this area, the members of the group are creating their own theorems, explanations, examples, and problems. Initially I will work through the written materials to see how they have brought together the two different areas I have studied.

Because the prerequisite for the course is Calculus II, I believe I have the background to produce some original results of my own, with guidance from the members of the group. This undergraduate research experience will lay the foundation for more substantial research when I attend graduate school.

Initially I will be looking at compound interest, and internal rate of return, paying particular attention to existence and uniqueness theorems.