New answers tagged investment
0
You interview one employer per week, and your discount rate is $\delta = 1/(1+.07)$. Suppose $x$ is the lowest quality job you would accept: anything worse than $x$, and you reject and keep searching. Let $J$ be the value of searching. Then we have the functional equation:
$$
J = \max_{x} \int_{x}^{1}z dF(z) + \int_{0}^x \delta J dF(z)
$$
The first term is ...
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@1muflon1 is definitely right. But for the sake of debate: when your friend pays $30 for your dinner of two (and then says you need to pay him back at some point) -- he is essentially loaning you $15 at 0% interest. You would owe him 15 now if you had the cash, but if you wait 2 weeks...you'll still owe him $15. I.e. zero interest.
Trivial example, maybe. ...
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