present value of one

present value of one

The value today of an amount to be received in the future, based on a compound interest rate.

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From formula (6), the random present value of one unit payment at time t can be expressed as
we find that [[beta].sub.t] = 1 which means that mathematical expectation of the present value of one unit currency at time t will be exp(-[[delta].sub.0]t).
The following theorem shows the expression of the mathematical expectation of the random present value of one unit currency at time t given in formula (8).
Under stochastic interest model (5), the mathematical expectation of the random present value of one unit currency at time t can be expressed as
Using the standard interest formula, the present value of one share of stock in one year, without dividends, is ($46.50 / 1.0334), or $45.

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