Class Notes (834,986)
ACTSC 231 (37)
Lecture

# act231-lecture1.pdf

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School
Department
Actuarial Science
Course
ACTSC 231
Professor
R Keith Freeland
Semester
Spring

Description
Actsci 231 LECTURE NOTESProf Keith Freeland Lecture 1CHAPTER 1 Time Value of Money11Lenders are willing to lend their money because the borrower pays them a feelike rent called interestEx If we deposit 100 into a savings account paying 5 interest per year then after 1 year our acct bal will be 105t0 we have 100t1 we have 105Thus money has a time valueWe describe this time value using an accumulation function or an amount functionDefn we dene the accumulation function at to be the accumulated value at time t of an investment of 1 made at time 0Note a01and we usually assume the function to be continuous If the interest rate is positive then this is an increasing functionDefn We dene the amount function At to be the accumulated value at time t of an investment of P made at time 0We usually assum
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