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1 Interest Theory A(t) is the amount function. a(t) is the accumulation function. a(t) = A(t)
 

Summary: 1 Interest Theory
A(t) is the amount function. a(t) is the accumulation function. a(t) = A(t)
A(0)
.
k at time s
kA(t)
A(s)
at time t.
vt = 1
a(t)
, t 0, is called the discount function discount function.
k at time s
kvt
vs
at time t.
Under compound interest vt = (1+i)-t
. i is the annual effective rate of interest. 1+i
is the one year interest factor. = 1 - d is the one year discount factor. d is the
annual rate of discount.
i =

  

Source: Arcones, Miguel A. - Department of Mathematical Sciences, State University of New York at Binghamton

 

Collections: Mathematics