Response | SIGecom Exchanges | June 2012

Solution to Exchanges 10.2 Puzzle: Borrowing in the Limit as Our Nerdiness Goes to Infinity

by Ran I. Shorrer

Abstract

This is a solution to the editor's puzzle from issue 10.2 of SIGecom Exchanges [Reeves 2011]. The puzzle asks to determine a point in time such that a lump sum payment of $S will be equivalent to a continuous stream of infinitesimal payments totaling $S, spread evenly over time. The full puzzle can be found online at: http://www.sigecom.org/exchanges/volume 10/2/puzzle.pdf.

Keywords: Borrowing and Debt; Market Transactions; Mathematical Methods;