C5 - Discounting and Accumulating PDF
C5 - Discounting and Accumulating PDF
C5 - Discounting and Accumulating PDF
𝑣 𝑡2
𝐶
𝑣 𝑡1
1
which can be written in the form 𝐶 = 𝐶𝑣 𝑡2 𝐴(0, 𝑡1 )
𝐴(𝑡1 ,𝑡2 )
-n 0 n
𝛿 𝑡 = 0.04 0 < 𝑡 ≤ 10
𝛿 𝑡 = 0.001(𝑡 − 10)2 +0.04 10 < 𝑡
𝑡 𝑇
= exp − න 𝛿 𝑠 𝑑𝑠
0 0
= 1 − 𝑣(𝑇)
• Obtain:
𝑇
𝐶 = 𝐶 න 𝛿 𝑡 𝑣(𝑡)𝑑𝑡 + 𝐶𝑣(𝑇)
0