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Chapter 4: The Elements of Finance

Chapter 4: The Elements of Finance

pp. 35-42

Authors

, London School of Economics and Political Science, , London School of Economics and Political Science
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Extract

Basic concepts in finance are introduced and modelled via first-order recurrence equations. In particular, we discuss compound interest, present value and the present value of an annuity.

Keywords

  • interest
  • compound interest
  • capital growth
  • present value
  • annuities
  • interval of compounding

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