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Chapter 2. Cashflows.
Manual for SOA Exam FM/CAS Exam 2.
Chapter 2. Cashflows.
Section 2.6. Continuous payments.
c 2009. Miguel A. Arcones. All rights reserved.
Extract from:
"Arcones' Manual for the SOA Exam FM/CAS Exam 2,
Financial Mathematics. Fall 2009 Edition",
available at http://www.actexmadriver.com/
c 2009. Miguel A. Arcones. All rights reserved. Manual for SOA Exam FM/CAS Exam 2.
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Chapter 2. Cashflows. Section 2.6. Continuous payments.
Continuous payments
Suppose that the payments are made very often. Then by
approximation, instead of a sum, we have an integral. It is like the
payments are made continuously. Let V (t) be the outstanding
fund balance at time t of the cashflow. Assume that contributions
are made continuously at an instantaneous rate C(t), then the
equation of value is

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

Collections: Mathematics