Question: Problem 15.32 For time t > 0, the discount function is defined by [a(t)]-i = . 1+0.01t Consider a five-year annuity with payments of 1
Problem 15.32 For time t > 0, the discount function is defined by [a(t)]-i = . 1+0.01t Consider a five-year annuity with payments of 1 at times t = 1, 2, 3, 4, 5, Consider the following: A calculates as as the sum of the present value of the individual payments. However, B accumulates the payments according to the accumulation function a(t) 1+0.01t and then multiplies the result by a. By how much do the answers of A and B differ
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