Was hoping for some insight into a solution for a specific issue...
I'm trying to estimate the earned value of a set of assets, where the known variables are the starting and ending values, and time.
At first, I thought the formula for continuously compounding interest (solving for interest rate) would be the ticket:
r = ln(A/P)^1/t
A= final value,
P = starting value
t = time
r = interest rate
But then I realized that I am not dealing with a closed system-- i.e., the starting value is being incremented continuously during time period t... for example:
Start with 100 units; end with 1,000 units. Each unit creates interest. However, over time period t (say one year), 2 units were added to A every day. What was the interest earned on all the units deposited?
So I suppose I'm looking for some sort of series to describe this activity?
Forgive me if I'm not making sense... I figure there's a formula for this that would make life easy..
Thank you all in advance.