Accumulation function: Difference between revisions

Revision as of 07:28, 14 August 2008

Revision as of 07:30, 14 August 2008

Line 1:

The '''accumulation function''' ''a''(''t'') is a function defined in terms of time ''t'' expressing the ratio of the value at time ''t'' ([[future value]]) and the initial investment ([[present value]]) (see also [[time value of money]]). It is used in [[interest theory]].

Thus the value at time ''t'' where the initial investment is ''k'' is given by:

Line 25:

:<math>a(t)=(1+i)^t.</math>

==See also==

*[[time value of money]]

[[Category:Mathematical finance]]