Abstract

http://ssrn.com/abstract=2417143
 


 



A New Discounting Model for Teaching Finance


Jamal Munshi


Sonoma State University

March 27, 2014


Abstract:     
The mathematics of continuous compounding is not limited to the valuation of continuously compounded financial instruments and flow annuities, but rather it is a versatile and robust model that may be used for valuation of all financial contracts normally encountered. It consists of a simple, consistent, coherent and conceptually appealing set of equations that apply without modification to the complete range of applications. The discrete stepwise model of compounding, by contrast, is a redundant innovation that is more complicated than the generalized model and limited in scope.

Number of Pages in PDF File: 12

Keywords: valuation, continuous compounding, time value of money, discounted cash flow, exponential growth

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Date posted: March 29, 2014  

Suggested Citation

Munshi, Jamal, A New Discounting Model for Teaching Finance (March 27, 2014). Available at SSRN: http://ssrn.com/abstract=2417143 or http://dx.doi.org/10.2139/ssrn.2417143

Contact Information

Jamal Munshi (Contact Author)
Sonoma State University ( email )
1801 East Cotati Avenue
Rohnert Park, CA 94928
United States
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