Discount interest, Financial instruments, Hedging etc.

Hi all

I am currently studying for F7 for Dec 2010 exam. When studying, I came across stuffs like calculating discount interest (interest rate of 10% over 5 years) and the many different financial instruments and hedging accounting.

I have no clue how to calculate discount interest and no background whatsoever on the financial instruments, and how to calculate them ( e.g. loan $157,763 at 4% interest rate, required to repay $200,000 in 5 yrs — how do you arrive at effective interest rate 9.5%?). Pretty sure these weren’t covered in the earlier papers.

Hence I’m asking for help. Is there a good introductory book for such topics? I don’t even know where to begin to search, are these topics considered as economics? or accounting?

It’d would be a great help if you could share with me how you yourself get knowledge of such things. Because all of the things I mention are assumed that you know in the textbooks and I’m having a hard time grasping the calculations and understanding the financial instruments.

Thank you in advance.
Kaitlyn