• Concept: Calculate accumulated and present values when interest rate changes over investment period

Discrete Rates

• Accumulation: $a(t)=(1+i_1​)(1+i_2​) \dots (1+i_t​)$, where $i_k$​ is the effective rate for period $k$
• Discounting: $a(t)^{-1} = (1+i_1)^{-1}(1+i_2)^{-1}\dots (1+i_{n})^{-1}$

Continuous Rates

• See Force of Interest