From Euclid, Fibonacci, Huygens, De Witt, and Halley to Forensic Economics
James E. Ciecka and Timothy P. Opiela. 2017. From Euclid, Fibonacci, Huygens, De Witt, and Halley to Forensic Economics. Journal of Legal Economics 23(2): pp. 65–79.
Forensic economists often calculate the value of level and varying annuities with fixed terms and for life. Examples include computing the present value of a lost earnings stream through worklife expectancy, calculating health care costs to life expectancy, or valuing a life annuity such as a pension. This paper traces historical developments that underlie these types of calculations. The journey begins with summing part of a geometric series, moves to compound interest, present value, mathematical expectation, life expectancy, and ends with life annuities. The trail covers 2,000 years from Euclid to Leonardo Pisano (Fibonacci) to Lodewijk Huygens to Jan De Witt and Edmond Halley. Sections of this paper follow in that historical order.
James E. Ciecka, Timothy P. Opiela