Compounding, DiscountingCompounding, Discounting, , and and …

4 Continuous discounting What is the present value of an asset or a contract that will be delivered in the futu re if we use the continuous compounding interest rate of r? where e,r, and t are the same X0 = present value now Xt = delivery value in the future XXet rt 0 Note: This formula and the continuous compounding formula ................
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