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1.) Show that if the growth of money is from compound interest with an annual effective rate of i >0, then the sum of the current value of a payment of K made n periods ago and K to be made n periods from now is greater than 2K.
2.) Suppose we know that for money in an account with accumulation function a(t), the sum of the current value of a payment of K made n periods ago and K to be made n periods from now is greater than 2K. What must be true about a(t). [Note that this is more general than the previous problem].
Please show as much work as possible.
2.) Suppose we know that for money in an account with accumulation function a(t), the sum of the current value of a payment of K made n periods ago and K to be made n periods from now is greater than 2K. What must be true about a(t). [Note that this is more general than the previous problem].
Please show as much work as possible.
