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    Can anyone explain how integration helps in calculation of the present value of a constant continuous stream of income?
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    I imagine if you were somehow able to approximate this stream as a function of time, integrating between some time and some later time would give you the approximate income earned during that time?
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    If you have total income as a function of time, and two times, t_1 and t_2, then the income earned between the two times would be: \displaystyle (\int ^{t_2}_{t_1} f(t) \ dt) - f(t_1)
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    (Original post by Lusus Naturae)
    If you have total income as a function of time, and two times, t_1 and t_2, then the income earned between the two times would be: \displaystyle \int ^{t_2}_{t_1} f(t) \ dt
    I think you mean that, no?
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    (Original post by generalebriety)
    I think you mean that, no?
    Wouldn't that give us the area down to the x-axis though? I think that the income earned from t_1 onwards, up to t_2, is just the area above the line f(t) = t_1, hence my formula.
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    (Original post by Lusus Naturae)
    Wouldn't that give us the area down to the x-axis though? I think that the income earned from t_1 onwards, up to t_2, is just the area above the line f(t) = t_1, hence my formula.
    Is the area down to the time axis not what we want?

    We're probably talking about two different things here...
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    (Original post by generalebriety)
    We're probably talking about two different things here...
    Probably, but this is one day when I don't really care. :p:
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    (Original post by Lusus Naturae)
    Probably, but this is one day when I don't really care. :p:
    Same, I'm afraid. :p:

    Better wait for someone else.
 
 
 
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