Chap 4 Flashcards
Simple interest AV
AV = X(1+ti)
Compound interest AV
X(1+I)^t
PV compound interest
V^t = X/ (1+I)^t Or X(1+I)^-t
Simple interest pv
(1 + ti)^-1
Relationship between v and I
V = 1/1+i
Relationship between v and d
V= 1-d
Relationship between i and V
I= 1/V -1
Relationship between d and i
D = I/1+I
Relationship d and v
D = 1-v
PV using rate of discount
PV = (1-d)^t
Av using rate of discount
AV = (1-d)^-t
Force of interest using i
Alpha = ln(1+i)
Relationship between i and alpha
1+i = e^alpha
Relationship between v and I
V = (1+i)^-1 = e^-alpha
Accumulating/ Av using a force of interest
AV = e^alpha*t
PV / discounting using force of interest
PV = e^-alpha*t
AV using varying force of interest
A (t) = exp ^int alpha
Between 0 and t
Discounting using varying force of interest
PV = exp^- integrate alpha
Beteeen 0 and t
