Discrete compounding

Discrete compounding

Compounding the time value of money for separate time intervals.
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Discrete compounding has more widespread usage in engineering economy community than continuous compounding.
Another superiority of our model is that the conversion of continuous compounding into discrete compounding provides more intelligibility, which increases its usability in practice.
In this study we suggest a new model based on Carlsson & Fuller's hybrid approach using discrete compounding instead of continuous compounding by defuzzifying the costs and revenues at a later stage than the based model and the based model has been improved by fuzzifying interest rates and probabilities.
Below, the interest rates for the case of discrete compounding are obtained by applying the data of oil field investment example to Eq.
Carlsson and Fuller's model has been re-arranged for discrete compounding and then the defuzzification of revenue and expenditures has been postponed and relavant equations have been formed for the cases of early defuzzifying probabilities and defuzzifying them at the last stage.
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