A Study of Mathematical Modelling in Financial Management

Student: Ya'u Zakari (Project, 2025)
Department of Mathematical Sciences
Ahmadu Bello University, Zaria, Kaduna State

Abstract

This project is out of the necessity to addressed the problem encounter by financial institutions and business managers in managing finance. Mathematical modeling tools applied in financial management were critically examine. The mathematical model design offers to a great extent, solution to these problems. This project work went further to discuss modeling tools such as derivatives (as applied in marginal analysis), based on mathematical analysis or rules with practical application that affect people’s everyday life. The importance of application of mathematical modeling in financial management is to predict the profitability, losses in business transaction and most importantly to check the validity of transaction in financial institution. It is also in making decision related to derivative securities, investment, risk management which provide with better understanding of mechanisms of financial operations, the concept of ordinary differential equation, derivative, graphical and simplex method of solving linear programming model were discussed and their application in solving optimization problems. This project concentrate on the use and misused of this model for influencing the forecasting and decision-making in financial institutions.

Keywords
Mathematical Modelling Finances Financial Management Linear Programming Marginal Analysis Marginal Cost Marginal Revenue Marginal Profit Profit Maximization Price Elasticity of Demand.
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