Series-Parallel Duality in the Mathematics of Appraisal
14 Pages Posted: 21 Feb 2009
Date Written: December 11, 2007
It has long been noticed that the basic functions in the mathematics of real estate appraisal and in financial arithmetic come in pairs where one function is the reciprocal of the other. For instance, the "payments to amortize a principal of one" is the reciprocal of the "principal amortized by payments of one." This paper shows that this phenomenon is an example of the series-parallel duality ordinarily studied in electrical circuit theory and combinatorial mathematics.
Keywords: Series-Parallel Duality, Six functions of one, financial valuation
JEL Classification: G1, M4
Suggested Citation: Suggested Citation