Theory of Interest | 
| Author: Stephen G. Kellison
Publisher: McGraw-Hill/Irwin
Category: Book
Buy Used: $14.95
New (18) Used (38) from $14.95
Avg. Customer Rating:  21 reviews
Sales Rank: 176896
Media: Hardcover
Edition: 2
Number Of Items: 1
Pages: 448
Shipping Weight (lbs): 1.6
Dimensions (in): 9.7 x 6.7 x 0.9
ISBN: 0256091501
Dewey Decimal Number: 332.8
EAN: 9780256091502
ASIN: 0256091501
Publication Date: May 1, 1991
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Product Description
The book is a thorough treatment of the mathematical theory and practical applications of compound interest, or mathematics of finance.
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| Customer Reviews: Read 16 more reviews...
 The very best there is for Exam FM June 29, 2006
A number of aspiring actuaries who attempt to pass the second exam (Exam FM: Financial Math) attempt to side step the reading of this over priced textbook and substitute it with study aides and other cram books. I would recommend that they refrain from doing so as this text is lucid, the exercises are quite comprehensive, and above all, the occasional examples are rather identical to the problems one can anticipate on the test. I took Exam FM recently and this is the only text i refered to, and i felt that my preparation was rather complete thanks to a reading of the syllabus material. The book flows like water, though chapter 4 (section 4.4) and chapter 5 might be a bit tedious to read because of the complication in the material presented, thankfully that second rarely contributes substantially to the test. in fact, after chapter 3, chapter 4 (sections 4.1-4.3), it is best to jump to chapter 5, 6, 7, and then 9. Once this study is complete, the material presented in section 4.4 and chapter 5 and sections 8.7, 8.8, 8.10 must be examined to maintain fluidity of the material.
the only reason i give the book 4 stars instead of 5 is due to its price which is rather high.
There may be better options. May 31, 2006
12 out of 12 found this review helpful
In order to save the reader some time I have condensed the information contained in the twenty previous reviews to the bare essentials. For those of you who are taking the SOA/CAS Exam F/2, there are some things you should be aware of before you dedicate yourself to studying from this book.
1. The book is poorly written. Almost everyone, including me, agrees. The author does not have a way with words, he does not know how to motivate the material and he often chooses the most confusing and roundabout way of explaining the concepts (if he explains them at all). Furthermore, the notation can be quite confusing. He is not consistent with his variables.
2. The book focuses on theory. Expect to spend your time following proofs and derivations of formulas. The problem sets in the book focus on proofs and derivations. Have a firm grasp on Calc 1, Calc 2 and all the algebra that is entialed because Kellison will not spend the time to spell out his proofs and derivations step by step.
3. You need a supplement for working example problems. There are not enough computational problems in this book. Get a good manual that will prepare you specifically for the exams you are taking. Manuals will give you pointers about managing your time and can help you avoid common traps and pitfalls that arise during computations. I recommend getting an Atex or ASM manual. For instance, Harold Cherry's ASM Manual covers all of the topics found in Kellison, at greater depth, in the same order, and in plain english.
4. Many people have passed the exams using only manuals. Other's have passed using manuals and other texts such as "Schaum's Outline of Mathematics for Finance" or "Mathematics of Finance" by Cissell. Very few people pass without doing lots of practice problems
5. Others have passed the exam by using only this book. So it seems that this book is sufficient, but not necessary for preparing for the exam. Ultimately, you must be the judge. WHile it is certainly true that if you master this book you will be rewarded by a rich understanding of the theory of interest my personal recommendation for those studying for the exams is to devote most of your time and energy to practice problems. I would recommend using this book to flesh out your understanding as you go.
 Good book, BUT... March 25, 2006
Yes, I gave the book a five star rating but only b/c it's one of the very few actual textbooks out there devoted to this subject alone.
Like a reviewer(s) already said, there aren't nearly enough examples in this book that match the type of questions that are on the actuarial exam... BUT, this book is great if you can use it in addition to OTHER practice problem sets that you find on your own. It's very interesting and it's kind of cool to read from the perspective that it's not common to have a calculator that handles some of the calculations that are required for this book's teachings.
I had a math elective that was basically geared for exam 2. Our teacher was nice enough to provide us with tons of practice sets. He also assigned lots of problems from the book, but the practice sets he gave were pretty much the foundation for the exams he gave (and identical to the actuarial exam 2).
If you are self-studying, you will definitely need to get outside practice sets otherwise you will be hung up on a lot of this book's mathematical theory questions (mainly resulting in your kicking yourself for looking for a needle in a haystack when the answer of the problem actually only required you to look for hay in the haystack... yes, I have the problem of trying to think over a problem... I'M WORKING ON IT!!!)
Great book November 7, 2005
4 out of 14 found this review helpful
Despite the complete lack of nudity or violence, kept my attention for 7 straight hours. I recommand reading it on the beach, perhaps in the 7 hours directly preceeding your exam 2.
 Got me through exam 2, but book is not user-friendly September 22, 2005
14 out of 15 found this review helpful
Background: As I was studying for exam 2, I was at the same time completing my master's in math. I say this not because the math in Kellison is difficult at all -- it's not -- but I am very accustomed to reading textbooks on my own and digesting them.
This book, the sample test on the website, and my BA II Plus calculator got me through (the new) exam 2 with a 9. If that's what you want to do, then this book will help you do it. The material is there. I just worked through all of the exercises in the book for the sections that were in the exam syllabus. If I couldn't get through an exercise, I circled it and came back later. Sometimes I could do the exercise the second time through. Sometimes I just gave up. Close to exam time, I put Kellison aside and worked through the sample exam on the SOA website over and over until I had the problems almost memorized.
You definitely need the sample exam, or sample problems, or something besides just this book though. This book has the material in it, but the feel for the problems and test-taking strategies have got to come from somewhere else. The problems in Kellison are relatively tough and theoretical compared to the exam. When you do problems from Kellison, you won't have time pressure, whereas on the test you will. Also, the sample exam helps you learn how to eliminate wrong answers, which is a very useful skill but something you can't find in Kellison at all.
While Kellison can present the material to do well on the exam, he is not really so good at helping you understand it. For example, the concept of discount is still something of a mystery to me on a gut level. I eventually decided to learn it purely as a function of interest, a concept I grasp very well, but some friendly hints from Kellison would have been helpful. In fact a more friendly, warm tone from Kellison in general would have been helpful. It is not user-friendly.
The advanced stuff in chapter 9 is pretty much a waste, especially immunization. I still don't understand it. Fortunately, if I remember correctly, it didn't show up much on the exam, except maybe duration, which is easy to memorize. I would suggest ignoring chapter 9 totally, except for what you need to do the sample exam, and just make sure you really understand the other stuff.
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