Stochastic Cash Flow Formulae Under Conditions of Inflation

Authors

Arnold Reisman
Arza K. Rao

Document Type

Report

Publication Date

12-1-1970

Abstract

This paper presents time-dependent deterministic and stochastic variations of common discounted cash flow formulae with explicit consideration given to inflation. The cash flows, the rates of discount or of compounding, and the rate of inflation are allowed to vary with time in a deterministic as well as random fashion in equations for the Compound Amount of a Single Payment, Present Worth of a Single Payment, Amount of an Annuity, Periodic Deposits to Accumulate a Future Amount, Present Worth of an Annuity, Capital Recovery, and the Present Worth of a Deferred Annuity.

Keywords

Stochastic processes, Operations research, Cash flow, Inflation (Finance), Annuities--Mathematical models

Publication Title

Technical Memorandums from the Department of Operations, School of Management, Case Western Reserve University

Issue

Technical memorandum no. 206

Rights

This work is in the public domain and may be freely downloaded for personal or academic use

Recommended Citation

Reisman, Arnold and Rao, Arza K., "Stochastic Cash Flow Formulae Under Conditions of Inflation" (1970). Research Reports from the Department of Operations. 553.
https://commons.case.edu/wsom-ops-reports/553