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This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License. math exams: Question FM 11/20/2011 04:53

Sunday, November 20, 2011

Question FM 11/20/2011 04:53

Calculate the present value at t=0 of a continuous payment stream made at the constant rate of $\rho_{t}=\$10$ per year from time 0 to time 20 years. The force of interest is given by $\delta_{t}=0.05$

Ans: $\frac{10}{0.05}[1-e^{-1}]$

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