• Application of Laplace transform in finance

    Mathematical Modeling, Vol. 2 (2018), Issue 4, pg(s) 130-133

    Laplace’s transformation is an important chapter of Mathematical Analysis. At present it is widely used in various problems of signal theory, physics, mechanics, electro – techniques and economics. Laplace’s transformation is the simplest and most economical method that leads directly to the required resolution of many of the various technical problems that arise when solving them. In this paper we will become acquainted with the basic concepts of operational mathematics and its application in economy. Not many analytic solutions exist for present discounted value problems but by using Laplace transform we can deduce some of the closed form solutions quite easily. There will be shown the connection between the current discounted value in finance and Laplace transformation.