Time Value of Money (TVM) | Exam FM Study Manual

The Actuarial Nexus

Section 1. Time Value of Money (TVM)

1.0. Introduction to TVM

$a(t), A(t)$

1.1. Accumulation Function

$\dfrac{a(n)-a(n-1)}{a(n-1)}$

1.2. Interest Rates

$1 + it$

1.3. Simple Interest

$(1 + i)^t$

1.4. Compound Interest

$i^{(m)}$

1.5. Nominal Interest Rate

$\delta_{t}$

1.6. Force of Interest

$PV(A)=PV(B)$

1.7. Equation of Value