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Further Considerations on M. Violeine's Solution of a Problem on the Rate of Interest in Loans repayable by Instalments

Published online by Cambridge University Press:  18 August 2016

Peter Gray*
Affiliation:
Institute of Actuaries

Extract

It has been represented to me that, in view of the influential position occupied by M. Violeine, the quasi official and authoritative character of his book, and the currency likely to be thereby imparted to the erroneous principles employed by him in the treatment of problems of the class to which the first of those I have discussed belongs;—I say it has been represented to me that in these circumstances it might be well to be a little more explicit as to his manner of proceeding. In my discussion of the problem in question I did enough, I believe, to shew that M. Violeine's solution is certainly erroneous. I admit however that I did not succeed to my own satisfaction (nor apparently to that of others) in precisely hitting the blot in it, and, as it were, reducing it to its elements. I think that from the consideration I have since given to the matter, I am now able to point out the fallacy by which it is vitiated, and I therefore willingly accede to the suggestion that has been made to me.

Type
Research Article
Copyright
Copyright © Institute and Faculty of Actuaries 1869

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References

* M. V. is described, on the title-page of his book, as “Membrede l'Ordre impérial de la Legion d'Honneur, chef de Bureau au Ministére des Finances, Auleur de plusieurs ouvrages sur les operations industrielles”; and a work of 232 pp., 8vo., now before me, bears the following title :—“Crédit Foncier de France.—Problémes relatifs aux Intents Composés, et plus spécialement aux operations du Crédit Fancier.—Nourel emploi des Tables de Violeine pour la solution des Problémes.”

See pp. 94, 95.

This is in accordance with a general principle which is almost axiomatic; namely, that if two benefits (certain, not contingent,) be, at a specified rate, of equal value at any one epoch, they will also, at the same rate, be of equal value at any other epoch.