JAIIB-Accounting

1

• JAIIB-Accounting Finance for Bankers
• MODULE-A
• BUSINESS MATHEMATICS
• Calculation of Simple Interest
• Calculation YTM
• Capital Budgeting Techniques
• Depreciation Methods

2

• BUSINESS MATHEMATICS
• Importance of Interest Calculation in a Bank
• Types of Interest Simple / Flat Interest
• - Compound Interest
• Importance of Rule 72
• Annuities its importance

3

• BUSINESS MATHEMATICS
• Annuities are essentially series of fixed
  payments required from you or paid to you at you
  at a specified frequency over the course of a
  fixed period of time
• FV of Annuities
• PV of Annuities

4

• BUSINESS MATHEMATICS
• Chapter 2 Calculation of YTM
• Sources of Finance
• - Debt Bonds / Debentures
• - Capital
• - Loans
• Bonds Face Value, Coupon Rate, Maturity /
  Period, Redemption Value, Market Value

5

• BUSINESS MATHEMATICS
• Theorems for Bond Value
• When the required Rate of Return is equal to the
  coupon rate, the value of the Bond is equal to
  its par value.
• When the required rate of return (Kd) is greater
  than the coupon rate, the value of the bond is
  less than its par value.
• When the required rate of return is less than the
  coupon rate, the value of the bond is greater
  than its par value etc.,

6

• BUSINESS MATHEMATICS
• 3. Capital Budgeting Techniques
• Decision Making to acquire or not to acquire
  the capital goods.
• Present Value P M / (1r)n
• - Pay Back Period
• - IRR
• - NPV
• - PI
• - Sensitivity Analysis

7

• BUSINESS MATHEMATICS
• 4. Depreciation Different Methods
• a. Straight Line Method
• b. Declining / Diminishing Balance Method
• c. Accelerated Depreciation.
• d. Sum of years Digit method
• AS-6 deals with Depreciation Accounting