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