Continuous Payments
November 10th, 2010
I had the following question from a student:
I am having some trouble understanding this question. I know how they solve the question but I am trying to solve it using the accumulation factor. In the solutions, they solve for the accumulation factor by taking an integral from n-10 of the force of interest. Using the trick you showed in your seminar, I found a(t) to be 1+t/8. Could you explain how the accumulation factor is used when it comes to these types of questions. The whole idea of continuous payments seems to bother me.
Here was my response:
