Course 2 -specifically the Kellison book

[Darth Tater]

I have a question about the use of d in this book. In chapter one, d is defined to be =i/(1+i)=1-v where v is the present or discounted value. However, later (Chapter 3) it is used as the denominator of the present value of an annuity-due. Are these the same d's? I believe that they are, but I'm not sure, as there is little discussion other than the comment about "d is a measure of interest payable at the beginning of the period" -- Kellison, pg63 in the version I have.

C_W, Gandalf, anyone?

My thanks in advance for an answer.

[Bama Gambler]

yes the are the same. d is the discount rate. for an annuity due you divide by d because the payment come at the beginning of the year.

bama gambler

[Darth Tater]

Thanks a bunch. :wink: