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Continuous money flow - Integration Applications

Continuous money flow

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Notes:

In most companies, we want to look at the revenue they invest over time. They will mostly look at the present value, and future value of their investments. To calculate the present value and future value, we use the following formulas:

PV=0TR(t)ertdtPV = \int_{0}^{T}R(t)e^{-rt}dt

FV=erT0TR(t)ertdtFV = e^{r^{T}}\int_{0}^{T}R(t)e^{-rt}dt

Where:

R(t)R(t) = revenue stream

TT = the total amount of time invested

rr = interest rate compounded continuously

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Continuous money flow

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