LaPlace Transforms as Present Value Rules: A Note
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- Author(s): STEPHEN A. BUSER
- Published: Apr 30, 2012
- Pages: 243-247
- DOI: 10.1111/j.1540-6261.1986.tb04502.x
The present value equation in finance is shown to be equivalent to the Laplace transformation in mathematics. Based on this observation, the list of known analytic solutions for the present value problem is increased from a handful to more than one hundred. General properties of the Laplace transform are examined as well in light of the newly discovered significance for finance.