This is kind of an edge case since most TVM problems involve compound interest, so somewhat low priority.
This might also apply to growth functions where accumulation and discounting do not yield the same value for certain points of time. For example, if we invest $1 at 5% simple interest, it grows to $1 x (1.15) = $1.15 at time 3. We can get the present value by multiplying by the discount function, (1 + .05 * t) ^ -1. But what we can't do is get the time 2 value by multiplying 1.15 by the discount function with t=1.
That is, $1 x (1.10) is not equal to $1.15 / 1.05.
When textbooks transition to compound interest, students may get used to its convenient properties and forget that you cannot just multiply by v * t when going backwards in time for 2 periods for certain growth functions other than compound interest.
In the general case, one must first bring the value back to time zero and then grow the pv up to the point in time for which you want to have the value.
The value module is the most obvious place I can think of where this may be a problem, so we should check there first.
This is kind of an edge case since most TVM problems involve compound interest, so somewhat low priority.
This might also apply to growth functions where accumulation and discounting do not yield the same value for certain points of time. For example, if we invest $1 at 5% simple interest, it grows to $1 x (1.15) = $1.15 at time 3. We can get the present value by multiplying by the discount function, (1 + .05 * t) ^ -1. But what we can't do is get the time 2 value by multiplying 1.15 by the discount function with t=1.
That is, $1 x (1.10) is not equal to $1.15 / 1.05.
When textbooks transition to compound interest, students may get used to its convenient properties and forget that you cannot just multiply by v * t when going backwards in time for 2 periods for certain growth functions other than compound interest.
In the general case, one must first bring the value back to time zero and then grow the pv up to the point in time for which you want to have the value.
The value module is the most obvious place I can think of where this may be a problem, so we should check there first.