Actuarial Science 2053 Lecture Notes - Lecture 10: Discounting, Promissory Note, Raw Image Format
20 Jan 2016
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In other words, we wish to determine how much we need to invest today, p, in order to have s at the end of n-interest periods, if we can earn i per period. Notes factor: the term (1 + i) n is called the discount, p is called the discounted value or, we are discounting at a compound present value of s interest rate. You are interested in purchasing an investment that will pay you ,750 on. Since a date is given in this question, we will need to calculate the value of n. Suppose you can buy a plot of land today for. ,000 cash or you can put ,000 down and make a payment of ,300 at the end of 3, Example 2. 3. 4 is an example of a long-term promissory note. On january 15 2014, a promissory note is written for , due with interest at j12 = 6%,
