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Time Value Of Money: Application And Rationality- An Approach Using Differential Equations And Definite Integrals

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  • Parvez, Mahbub

Abstract

The time value of money is one of the most important concepts in finance. Money that a firm has in its possession today is more valuable than future payments because today’s money can be invested to earn positive returns in future. The principles of time value analysis have many applications, ranging from setting up schedules for paying off loans to decisions about whether to acquire new equipment. Problems concerning Time Value of Money, which involves calculation of these concepts, are usually solved by algebraic formulae. This paper attempts to solve such problems using differential equations & definite integral techniques and makes a comparison with the results obtained by the traditional method.

Suggested Citation

  • Parvez, Mahbub, 2006. "Time Value Of Money: Application And Rationality- An Approach Using Differential Equations And Definite Integrals," MPRA Paper 10794, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:10794
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    File URL: https://mpra.ub.uni-muenchen.de/10794/1/MPRA_paper_10794.pdf
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    Cited by:

    1. Oliver Cruz-Milan & Sergio Lagunas-Puls, 2021. "Effects of COVID-19 on Variations of Taxpayers in Tourism-Reliant Regions: The Case of the Mexican Caribbean," JRFM, MDPI, vol. 14(12), pages 1-23, December.
    2. EROGLU, Abdullah & ERDAS, Mehmet Levent, 2018. "Development Of Periodic Loan Repayment Models Considering Rhythmic Skips," Studii Financiare (Financial Studies), Centre of Financial and Monetary Research "Victor Slavescu", vol. 22(1), pages 6-19.

    More about this item

    JEL classification:

    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics

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