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To an Axiomatic Model of strongRate of Growthstrong.pdf

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Applied Mathematics, 2013, 4, 1326-1332 /10.4236/am.2013.49179 Published Online September 2013 (/journal/am) To an Axiomatic Model of Rate of Growth 1 2 Václav Studený , Ivan Mezník 1Department of Applied Mathematics, Faculty of Economics, and Administration, Masaryk University, Brno, Czech Republic 2Institute of Informatics, Faculty of Business and Management, Brno University of Technology, Brno, Czech Republic Email: Vclv.St@, meznik@fbm.vutbr.cz Received July 7, 2012; revised January 6, 2013; accepted January 13, 2013 Copyright © 2013 Václav Studený, Ivan Mezniík. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. ABSTRACT In the paper an axiomatic approach to express rates of growth is presented. The formula is given of rate of growth at a point as the limit case of rate of growth on an interval and the inverse formula is derived to compute present and future value of capital for an integrable rate of growth. Incidentally some inconsistencies in currently used formulas are pointed out. Keywords: Interest Rate; Inflation Rate; Rate of Growth t 1. Introduction with value ξ t = ξ does not yield f t = f 0 ⋅ 1+ξ . ( )