Notes โบ MATH 5441: Financial Mathematics Lecture 21
Varying Interest Annuities
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Table of Contents
Concept
- Dealing with funds that have different interests at different time periods
Solution
- Create huge “divider marks” that set the interest changes in the timeline
- Annuity payments cannot cross those divider lines without being considered another annuity entirely
- Be careful when accumulating/discounting interest across divider marks! You must have two separate stages if it goes past