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Abraham de Moivre Formulates the Theory of Annuities

Portrait of Abraham de Moivre,

Portrait of Abraham de Moivre, Engraved by J. Faber after a painting by J. Highmore. Cambridge University Library.

In 1725 French Hugenot mathematician and demographer exiled in England, Abraham de Moivre published from London Annuities upon Lives: Or, the Valuation of Annuities upon any Number of Lives; as also, of Reversions. Using the mortality statistics gathered by Edmond Halley in the 1690s, Moivre formulated the theory of annuities, deriving his formulas from a postulated uniform rate of mortality and constant rates of interest on money. "Here one finds the treatment of joint annuities on several lives, the inheritance of annuities, problems about the fair division of the costs of a tontine, and other contracts in which both age and interest on capital are relevant. This mathematics became a standard part of all subsequent commercial applications in England" (Dictionary of Scientific Biography).

Hook & Norman, The Haskell F. Norman Library of Science and Medicine (1991) no. 1530.

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