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{{General relativity sidebar |fundamentals}}


The '''time value of money''' is the value of money figuring in a given amount of [[interest]] earned over a given amount of time. The time value of money is the central concept in '''finance theory.'''
In physics, the '''world line''' of an object is the unique path of that object as it travels through 4-[[dimension]]al [[spacetime]]. The concept of "world line" is distinguished from the concept of "orbit" or "trajectory" (such as an ''orbit in space'' or a ''trajectory'' of a truck on a road map) by the ''time'' dimension, and typically encompasses a large area of spacetime wherein [[perception|perceptually]] straight paths are recalculated to show their (relatively) more absolute position states — to reveal the nature of [[special relativity]] or [[gravitation]]al interactions. The idea of world lines originates in [[physics]] and was pioneered by [[Hermann Minkowski]]. The term is now most often used in relativity theories (i.e., [[special relativity]] and [[general relativity]]).


For example, $100 of today's money invested for one year and earning 5% interest will be worth $105 after one year. Therefore, $100 paid now or $105 paid exactly one year from now both have the same value to the recipient who assumes 5% interest; using '''time value of money terminology''', $100 invested for one year at 5% interest has a ''future value'' of $105.<ref>http://www.investopedia.com/articles/03/082703.asp</ref> This notion dates at least to [[Martín de Azpilcueta]] (1491–1586) of the [[School of Salamanca]].
However, world lines are a general way of representing the course of events. The use of it is not bound to any specific theory. Thus in general usage, a world line is the sequential path of personal human events (with ''time'' and ''place'' as dimensions) that marks the history of a person<ref>[[George Gamow]] (1970) ''My World Line: An Informal Autobiography'', [[Viking Press]], ISBN 0-670-50376-2</ref> — perhaps starting at the time and place of one's birth until one's death. The log book of a ship is a description of the ship's world line, as long as it contains a time tag attached to every position. The world line allows one to calculate the speed of the ship, given a measure of distance (a so-called metric) appropriate for the curved surface of the [[Earth]].


The method also allows the valuation of a likely stream of income in the future, in such a way that the annual incomes are discounted and then added together, thus providing a lump-sum "present value" of the entire income stream.
==Usage in physics==
In [[physics]], a world line of an object (approximated as a point in space, e.g., a particle or observer) is the sequence of [[spacetime]] events corresponding to the history of the object. A world line is a special type of curve in spacetime. Below an equivalent definition will be explained: A world line is a time-like curve in spacetime. Each point of a world line is an event that can be labeled with the time and the spatial position of the object at that time.


All of the standard calculations for time value of money derive from the most basic algebraic expression for the [[present value]] of a future sum, "[[Discounting|discounted]]" to the present by an amount equal to the time value of money. For example, a sum of ''FV'' to be received in one year is discounted (at the rate of interest '''r''') to give a sum of ''PV'' at present: PV = FV − r'''·'''PV = FV/(1+r).
For example, the ''orbit'' of the Earth in space is approximately a circle, a three-dimensional (closed) curve in space: the Earth  returns every year to the same point in space. However, it arrives there at a different (later) time. The ''world line''  of the Earth is [[helix|helical]] in spacetime (a curve in a four-dimensional space) and does not return to the same point.


Some standard calculations based on the time value of money are:
Spacetime is the collection of points called [[event (relativity)|events]], together with a continuous and smooth coordinate system identifying the events. Each event can be labeled by four numbers: a time coordinate and three space coordinates; thus spacetime is a four-dimensional space. The mathematical term for spacetime is a four-dimensional [[manifold]]. The concept may be applied as well to a higher-dimensional space. For easy visualizations of four dimensions, two space coordinates are often suppressed. The event is then represented by a point in a [[Minkowski diagram]], which is a plane usually plotted with the time coordinate, say <math>t</math>, upwards and the space coordinate, say <math>x</math> horizontally.
:'''[[Present value]]''' The current worth of a future sum of money or stream of [[cash flows]] given a specified rate of return. Future cash flows are discounted at the discount rate, and the higher the discount rate, the lower the present value of the future cash flows. Determining the appropriate discount rate is the key to properly valuing future cash flows, whether they be earnings or obligations.<ref>http://www.investopedia.com/terms/p/presentvalue.asp</ref>
As expressed by F.R. Harvey
:'''Present value of an [[Annuity (finance theory)|annuity]]''' An annuity is a series of equal payments or receipts that occur at evenly spaced intervals. Leases and rental payments are examples. The payments or receipts occur at the end of each period for an ordinary annuity while they occur at the beginning of each period for an annuity due.<ref>http://www.getobjects.com/Components/Finance/TVM/pva.html</ref>
:A curve M in [spacetime] is called a ''worldline of a particle'' if its tangent is future timelike at each point. The arclength parameter is called [[proper time]] and usually denoted &tau;. The length of M is called the ''proper  time'' of the worldline or particle. If the worldline M is a line segment, then the particle is said to be in [[free fall]].<ref>F. Reese Harvey (1990) ''Spinors and calibrations'',  pages 62,3, [[Academic Press]], ISBN 0-12-329650-1</ref>
:'''Present value of a [[perpetuity]]''' is an infinite and constant stream of identical cash flows.<ref>http://www.investopedia.com/terms/p/perpetuity.asp</ref>


:'''[[Future value]]''' is the value of an asset or cash at a specified date in the future that is equivalent in value to a specified sum today.<ref>http://www.investopedia.com/terms/f/futurevalue.asp</ref>
A world line traces out the path of a single point in spacetime. A [[world sheet]] is the analogous two-dimensional surface traced out by a one-dimensional line (like a string) traveling through spacetime. The world sheet of an open string (with loose ends) is a strip; that of a closed string (a loop) is a volume.
:'''Future value of an annuity''' (FVA) is the future value of a stream of payments (annuity), assuming the payments are invested at a given rate of interest.


== Calculations ==
Once the object is not approximated as a mere point but has extended volume, it traces out not a ''world line'' but rather a [[world tube]].
There are several basic equations that represent the equalities listed above. The solutions may be found using (in most cases) the formulas, a financial calculator or a [[spreadsheet]]. The formulas are programmed into most financial calculators and several spreadsheet functions (such as PV, FV, RATE, NPER, and PMT).<ref>Hovey, M. (2005). Spreadsheet Modelling for Finance. Frenchs Forest, N.S.W.: Pearson Education Australia.</ref>


For any of the equations below, the formula may also be rearranged to determine one of the other unknowns. In the case of the standard annuity formula, however, there is no closed-form algebraic solution for the interest rate (although financial calculators and spreadsheet programs can readily determine solutions through rapid trial and error algorithms).
==World lines as a tool to describe events==
[[Image:Brane-wlwswv.png|300px|right|thumb|World line, worldsheet, and world volume, as they are derived from [[elementary particle|particles]], [[string theory|strings]], and [[Membrane (M-theory)|brane]]s.]]


These equations are frequently combined for particular uses. For example, [[Bond (finance)|bonds]] can be readily priced using these equations. A typical coupon bond is composed of two types of payments: a stream of coupon payments similar to an annuity, and a lump-sum [[return of capital]] at the end of the bond's [[Maturity (finance)|maturity]] - that is, a future payment. The two formulas can be combined to determine the present value of the bond.
A one-dimensional ''line'' or ''curve'' can be represented by the coordinates as a function of one parameter. Each value of the parameter corresponds to a point in spacetime and varying the parameter traces out a line. So in mathematical terms a curve is defined by four coordinate functions <math>x^a(\tau),\; a=0,1,2,3</math> (where <math>x^{0}</math> usually denotes the time coordinate) depending on one parameter <math>\tau</math>. A coordinate grid in spacetime is the set of curves one obtains if three out of four coordinate functions are set to a constant.


An important note is that the interest rate ''i'' is the interest rate for the relevant period. For an annuity that makes one payment per year, ''i'' will be the annual interest rate. For an income or payment stream with a different payment schedule, the interest rate must be converted into the relevant periodic interest rate. For example, a monthly rate for a mortgage with monthly payments requires that the interest rate be divided by 12 (see the example below). See [[compound interest]] for details on converting between different periodic interest rates.
Sometimes, the term '''world line''' is loosely used for ''any'' curve in spacetime. This terminology causes confusions. More properly, a '''world line'''  is a curve in spacetime which traces out the ''(time) history''  of a particle, observer or small object. One usually takes the [[proper time]] of an object or an observer as the curve parameter  <math>\tau</math> along the world line.


The rate of return in the calculations can be either the variable solved for, or a predefined variable that measures a discount rate, interest, inflation, rate of return, cost of equity, cost of debt or any number of other analogous concepts. The choice of the appropriate rate is critical to the exercise, and the use of an incorrect discount rate will make the results meaningless.
===Trivial examples of spacetime curves===
[[Image:Worldlines1.jpg|frame|Three different world lines representing travel at different constant speeds. ''t'' is time and ''x'' distance.]]
A curve that consists of a horizontal line segment (a line at constant coordinate time), may represent a rod in spacetime and would not be a world line in the proper sense. The parameter traces the length of the rod.


For calculations involving annuities, you must decide whether the payments are made at the end of each period (known as an ordinary annuity), or at the beginning of each period (known as an annuity due). If you are using a financial calculator or a [[spreadsheet]], you can usually set it for either calculation. The following formulas are for an ordinary annuity.  If you want the answer for the Present Value of an annuity due simply multiply the PV of an ordinary annuity by (1 + ''i'').
A line at constant space coordinate (a vertical line in the convention adopted above) may represent a particle at rest (or a stationary observer). A tilted line represents a particle with a constant coordinate speed (constant change in space coordinate with increasing time coordinate). The more the line is tilted from the vertical, the larger the speed.


== Formula ==
Two world lines that start out separately and then intersect, signify a ''collision'' or "encounter." Two world lines starting at the same event in spacetime, each following its own path afterwards, may represent the decay of a particle into two others or the emission of one particle by another.
=== Present value of a future sum ===
The present value formula is the core formula for the time value of money; each of the other formulae is derived from this formula. For example, the annuity formula is the sum of a series of present value calculations.


The [[present value]] (PV) formula has four variables, each of which can be solved for:
World lines of a particle and an observer may be interconnected with the world line of a photon (the path of light) and form a diagram which depicts the emission of a photon by a particle which is subsequently observed by the observer (or absorbed by another particle).


:<math> PV \ = \ \frac{FV}{(1+i)^n} </math>
===Tangent vector to a world line, four-velocity===
The four coordinate functions <math>x^a(\tau),\; a=0,1,2,3</math>
defining a world line, are real functions of a real variable <math>\tau</math> and can simply be differentiated in the usual calculus. Without the existence of a metric (this is important to realize) one can speak of the difference between a point <math>p</math> on the curve at the parameter value <math>\tau_0</math> and a point on the curve a little (parameter <math>\tau_0+\Delta\tau</math>) farther away. In the limit <math>\Delta\tau\rightarrow 0</math>, this difference divided by <math>\Delta\tau</math> defines a vector, the '''tangent vector''' of the world line at the point <math>p</math>. It is a four-dimensional vector, defined in the point <math>p</math>. It is associated with the normal 3-dimensional velocity of the object (but it is not the same) and therefore called '''four-velocity''' <math>\vec{v}</math>, or in components:
:<math>\vec{v} = (v^0,v^1,v^2,v^3) = \left( \frac{dx^0}{d\tau}\;,\frac{dx^1}{d\tau}\;, \frac{dx^2}{d\tau}\;, \frac{dx^3}{d\tau} \right)</math>


# PV is the value at time=0
where the derivatives are taken at the point <math>p</math>, so at <math>\tau=\tau_0</math>.
# FV is the value at time=n
# i is the [[discount rate]], or the interest rate at which the amount will be compounded each period
# n is the number of periods (not necessarily an integer)


The cumulative [[present value]] of future cash flows can be calculated by summing the contributions of ''FV<sub>t</sub>'', the value of cash flow at time ''t''
All curves through point p have a tangent vector, not only world lines. The sum of two vectors is again a tangent vector to some other curve and the same holds for multiplying by a scalar. Therefore all tangent vectors in a point p span a [[linear space]], called the [[tangent space]] at point p. For example, taking a 2-dimensional space, like the (curved) surface of the Earth, its tangent space at a specific point would be the flat approximation of the curved space.


:<math>  PV \ = \ \sum_{t=0}^{n} \frac{FV_{t}}{(1+i)^t} </math>
==World lines in special relativity==
So far a world line (and the concept of tangent vectors) has been described without a means of quantifying the interval between events. The basic mathematics is as follows: The theory of [[special relativity]] puts some constraints on possible world lines. In special relativity the description of [[spacetime]] is limited to ''special'' coordinate systems that do not accelerate (and so do not rotate either), called [[inertial frame of reference|inertial coordinate system]]s. In such coordinate systems, the [[speed of light]] is a constant. The structure of spacetime is determined by a [[bilinear form]] &eta; which gives a [[real number]] for each pair of events. The bilinear form is sometimes called a ''spacetime metric'', but since distinct events sometimes result in a zero value, unlike metrics in [[metric space]]s of mathematics, the bilinear form is ''not'' a mathematical metric on spacetime.


Note that this series can be summed for a given value of ''n'', or when ''n'' is ∞.<ref>http://mathworld.wolfram.com/GeometricSeries.html Geometric Series</ref> This is a very general formula, which leads to several important special cases given below.
World lines of particles/objects at constant speed are called [[geodesic]]s. In special relativity these are straight lines in Minkowski space.


=== Present value of an annuity for n payment periods ===
Often the time units are chosen such that the speed of light is represented by lines at a fixed angle, usually at 45 degrees, forming a cone with the vertical (time) axis. In general, curves in spacetime can be of three types:
In this case the cash flow values remain the same throughout the n periods. The present value of an [[Annuity (finance theory)|annuity]] (PVA) formula has four variables, each of which can be solved for:


:<math>PV(A) \,=\,\frac{A}{i} \cdot \left[ {1-\frac{1}{\left(1+i\right)^n}} \right] </math>
* '''light-like''' curves, having at each point the speed of light. They form a cone in spacetime, dividing it into two parts. The cone is three-dimensional in spacetime, appears as a line in drawings with two dimensions suppressed, and as a cone in drawings with one spatial dimension suppressed.


# PV(A) is the value of the annuity at time=0
[[Image:World line2.svg|right|thumb|320px|An example of a [[light cone]], the three-dimensional surface of all possible light rays arriving at and departing from a point in spacetime. Here, it is depicted with one spatial dimension suppressed.]]
# A is the value of the individual payments in each compounding period
# i equals the interest rate that would be compounded for each period of time
# n is the number of payment periods.


To get the PV of an [[Annuity (finance theory)#Annuity-due|annuity due]], multiply the above equation by (1 + ''i'').
* '''time-like''' curves, with a speed less than the speed of light. These curves must fall within a cone defined by light-like curves. In our definition above: '''world lines are time-like curves in spacetime'''.


=== Present value of a growing annuity ===
* '''space-like''' curves falling outside the light cone. Such curves may describe, for example, the length of a physical object. The circumference of a cylinder and the length of a rod are space-like curves.
In this case each cash flow grows by a factor of (1+g). Similar to the formula for an annuity, the present value of a growing annuity (PVGA) uses the same variables with the addition of ''g'' as the rate of growth of the annuity (A is the annuity payment in the first period). This is a calculation that is rarely provided for on financial calculators.


'''Where i ≠ g :'''
At a given event on a world line, spacetime ([[Minkowski space]]) is divided into three parts.


:<math>PV\,=\,{A \over (i-g)}\left[ 1- \left({1+g \over 1+i}\right)^n \right] </math>
* The '''future''' of the given event is formed by all events that can be reached through time-like curves lying within the future light cone.
* The '''past''' of the given event is formed by all events that can influence the event (that is, which can be connected by world lines within the past [[light cone]] to the given event).
* The '''lightcone''' at the given event is formed by all events that can be connected through light rays with the event. When we observe the sky at night, we basically see only the past [[light cone]] within the entire spacetime.
* '''Elsewhere''' is the region between the two light cones. Points in an observer's '''elsewhere''' are inaccessible to her/him; only points in the past can send signals to the observer.  In ordinary laboratory experience, using common units and methods of measurement, it may seem that we look at the present, but in fact there is always a delay time for light to propagate.  For example, we see the [[Sun]] as it was about 8 minutes ago, not as it is "right now."  Unlike the '''present''' in Galilean/Newtonian theory, the '''elsewhere''' is thick; it is not a 3-dimensional volume but is instead a 4-dimensional spacetime region.
** Included in "elsewhere" is the '''simultaneous hyperplane''', which is defined for a given observer by a [[space]] which is [[hyperbolic-orthogonal]] to her/his world line. It is really three-dimensional, though it would be a 2-plane in the diagram because we had to throw away one dimension to make an intelligible picture. Although the light cones are the same for all observers at a given spacetime event, different observers, with differing velocities but coincident at the event (point) in the spacetime, have world lines that cross each other at an angle determined by their relative velocities, and thus they have different simultaneous hyperplanes.
** The '''present''' often means the single spacetime event being considered.


To get the PV of a growing [[Annuity (finance theory)#Annuity-due|annuity due]], multiply the above equation by (1 + ''i'').
===Simultaneous hyperplane===
Since a world line <math>\scriptstyle w(\tau) \isin R^4</math> determines a velocity 4-vector <math>\scriptstyle v = \frac {dw}{d\tau}</math> that is time-like, the Minkowski form <math>\scriptstyle \eta(v,x)</math> determines a linear function <math>\scriptstyle R^4 \rarr R</math> by <math>\scriptstyle  x \mapsto \eta( v , x ) .</math> Let  ''N'' be the [[kernel (linear algebra)|null space]] of this linear functional. Then ''N'' is called the '''simultaneous hyperplane''' with respect to ''v''. The [[relativity of simultaneity]] is a statement that ''N'' depends on ''v''. Indeed, ''N'' is the [[orthogonal complement]] of ''v'' with respect to &eta;.
When two world lines ''u'' and ''w'' are related by <math>\scriptstyle \frac {du}{d\tau} = \frac {dw}{d\tau}, </math> then they share the same simultaneous hyperplane. This hyperplane exists mathematically, but physical relations in relativity involve the movement of information by light. For instance, the traditional electro-static force described by [[Coulomb's law]] may be pictured in a simultaneous hyperplane, but relativistic relations of charge and force involve [[retarded potential]]s.


'''Where i = g :'''
==World lines in general relativity==
The use of world lines in [[general relativity]] is basically the same as in special relativity, with the difference that [[spacetime]] can be [[curvature|curved]]. A [[metric tensor|metric]] exists and its dynamics are determined by the [[Einstein field equations]] and are dependent on the mass distribution in spacetime. Again the metric defines [[lightlike]] (null), [[spacelike]] and [[timelike]] curves.  Also, in general relativity, world lines are [[timelike]] curves in spacetime, where [[timelike]] curves fall within the lightcone. However, a lightcone is not necessarily inclined at 45 degrees to the time axis. However, this is an artifact of the chosen coordinate system, and reflects the coordinate freedom ([[diffeomorphism invariance]]) of general relativity. Any [[timelike]] curve admits a [[Proper frame|comoving observer]] whose "time axis" corresponds to that curve, and, since no observer is privileged, we can always find a local coordinate system in which lightcones are inclined at 45 degrees to the time axis. See also for example [[Eddington-Finkelstein coordinates]].


:<math>PV\,=\,{A*n \over 1+i} </math>
World lines of free-falling particles or objects (such as planets around the Sun or an astronaut in space) are called [[geodesic]]s.


=== Present value of a perpetuity ===
==World lines in literature==
When ''n'' → ∞, the ''PV'' of a perpetuity (a perpetual annuity) formula becomes simple division.
A popular description of human world lines was given by [[J. C. Fields]] at the [[University of Toronto]] in the early days of relativity. As described by Toronto lawyer Norman Robertson:
:I remember [Fields] lecturing at one of the Saturday evening lectures at the [[Royal Canadian Institute]]. It was advertised to be a "Mathematical Fantasy" — and it was! The substance of the exercise was as follows: He postulated that, commencing with his birth, every human being had some kind of spiritual aura with a long filament or thread attached, that travelled behind him throughout his life. He then proceeded in imagination to describe the complicated entanglement every individual became involved in his relationship to other individuals, comparing the simple entanglements of youth to those complicated knots that develop in later life.<ref>[[Gilbert de Beauregard Robinson]] (1979) ''The Mathematics Department in the University of Toronto'', p. 19, [[University of Toronto Press]] ISBN 0-7727-1600-5</ref>


:<math>PV(P) \ = \ { A \over i } </math>
Because they oversimplify world lines, which traverse four-dimensional spacetime, into one-dimensional timelines, almost all purported science-fiction stories about [[time travel]] are actually wishful fantasy stories. Some device or superpowered person is generally portrayed as departing from one point in time, and with little or no subjective lag, arriving at some other point in time — but at the same literally geographic point in space, typically inside a workshop or near some historic site. However, in reality the planet, its solar system, and its galaxy would all be at vastly different spatial positions on arrival. Thus, the time travel mechanism would also have to provide instantaneous teleportation, with infinitely accurate and simultaneous adjustment of final 3D location, linear momentum, and angular momentum.


=== Present value of a growing perpetuity ===
World lines appeared in [[Jeffrey Rowland]]'s webcomic ''Wigu Adventures'' as part of the "Magical Adventures in Space" side story line, in which Topato Potato and Sheriff Pony accidentally delete a world line relating to the initial creation of Earth from [[asteroid]]s, causing the Earth to never have existed. According to this webcomic, calculating the exact coordinates of a world line is "embarrassingly simple", and the deletion of the world line specified is executed by making a call and entering the coordinates of the world line, and pressing 3.<ref>{{cite web|title=Wigu Adventures|chapter=Day 6 (The Multiverse, The Pool, and Elves)|url=http://www.wigucomics.com/adventures/index.php?comic=498|publisher=[[TopatoCo]]}}</ref>
When the perpetual annuity payment grows at a fixed rate (g) the value is theoretically determined according to the following formula. In practice, there are few securities with precise characteristics, and the application of this valuation approach is subject to various qualifications and modifications. Most importantly, it is rare to find a growing perpetual annuity with fixed rates of growth and true perpetual cash flow generation. Despite these qualifications, the general approach may be used in valuations of real estate, equities, and other assets.


:<math> PVGP  \ = \ { A \over (i-g) } </math>
Author [[Oliver Franklin]] published a [[science fiction]] work in 2008 entitled ''World Lines'' in which he related a simplified explanation of the hypothesis for laymen.<ref name=Franklin>{{Cite book|title=World Lines |author=Oliver Franklin |isbn=1-906557-00-4 |year=2008 |publisher=Epic Press}}</ref>


This is the well known [[Gordon model|Gordon Growth model]] used for [[stock valuation]].
In the short story ''[[Life-Line]]'', author [[Robert A. Heinlein]] describes the world line of a person:<ref>{{Cite web|title=Technovelgy: Chronovitameter |url=http://www.technovelgy.com/ct/content.asp?Bnum=1851 |accessdate= 8 September 2010}}</ref>


=== Future value of a present sum ===
:He stepped up to one of the reporters. "Suppose we take you as an example. Your name is Rogers, is it not? Very well, Rogers, you are a space-time event having duration four ways. You are not quite six feet tall, you are about twenty inches wide and perhaps ten inches thick. In time, there stretches behind you more of this space-time event, reaching to perhaps nineteen-sixteen, of which we see a cross-section here at right angles to the time axis, and as thick as the present. At the far end is a baby, smelling of sour milk and drooling its breakfast on its bib. At the other end lies, perhaps, an old man someplace in the nineteen-eighties.
The [[future value]]  (FV)  formula is similar and uses the same variables.


:<math>  FV  \ = \  PV \cdot (1+i)^n </math>
:"Imagine this space-time event that we call Rogers as a long pink worm, continuous through the years, one end in his mother's womb, and the other at the grave..."


=== Future value of an annuity ===
Heinlein's ''[[Methuselah's Children]]'' uses the term, as does [[James Blish]]'s ''[[The Quincunx of Time]]'' (expanded from "Beep").
The future value of an [[Annuity (finance theory)|annuity]] (FVA) formula has four variables, each of which can be solved for:


:<math>FV(A) \,=\,A\cdot\frac{\left(1+i\right)^n-1}{i}</math>
A [[visual novel]] named [[Steins;Gate]], produced by [[5pb.]], tells a story based on the shifting of world lines.  Its series of works under the name ''[[hypothetical science ADV]]'' also utilized the concept.


# ''FV''(''A'') is the value of the annuity at time = ''n''
==See also==
# ''A'' is the value of the individual payments in each compounding period
* Specific types of world lines
# ''i'' is the interest rate that would be compounded for each period of time
** [[Geodesic]]s
# ''n'' is the number of payment periods
** [[Closed timelike curve]]s
** [[Causal structure#Curves|Causal structure]], curves that represent a variety of different types of world line
* [[Feynman Diagram]]
* [[Time geography]]


=== Future value of a growing annuity ===
==References==
The future value of a growing annuity (FVA) formula has five variables, each of which can be solved for:
{{Reflist}}
*{{Citation|author=Minkowski, Hermann|year=1909|title=[[s:de:Raum und Zeit (Minkowski)|Raum und Zeit]]|journal=Physikalische Zeitschrift|volume=10|pages=75–88}}
:*Various English translations on Wikisource: [[s:Space and Time|Space and Time]]
* [[Ludwik Silberstein]] (1914) ''Theory of Relativity'', p 130, [[Macmillan and Company]].


'''Where i ≠ g :'''
==External links==
*[http://www.bbc.co.uk/dna/h2g2/A3086039 World lines] article on [[h2g2]].
{{Use dmy dates|date=September 2010}}
* [http://richardhaskell.com/files/Special%20Relativity%20and%20Maxwells%20Equations.pdf in depth text on world lines and special relativity]
{{Relativity}}


:<math>FV(A) \,=\,A\cdot\frac{\left(1+i\right)^n-\left(1+g\right)^n}{i-g}</math>
{{DEFAULTSORT:World Line}}
 
[[Category:Theory of relativity]]
'''Where i = g :'''
[[Category:Minkowski spacetime]]
 
[[Category:Time]]
:<math>FV(A) \,=\,A\cdot n(1+i)^{n-1}</math>
 
# ''FV''(''A'') is the value of the annuity at time = ''n''
# ''A'' is the value of initial payment paid at time 1
# ''i'' is the interest rate that would be compounded for each period of time
# ''g'' is the growing rate that would be compounded for each period of time
# ''n'' is the number of payment periods
 
== Derivations ==
=== Annuity derivation ===
The formula for the present value of a regular stream of future payments (an annuity) is derived from a sum of the formula for future value of a single future payment, as below, where ''C'' is the payment amount and ''n'' the period.
 
A single payment C at future time ''m'' has the following future value at future time ''n'':
 
:<math>FV \ = C(1+i)^{n-m}</math>
 
Summing over all payments from time 1 to time n, then reversing the order of terms and substituting ''k'' = ''n'' - ''m'':
 
:<math>FVA \ = \sum_{m=1}^n C(1+i)^{n-m} \ = \sum_{k=0}^{n-1} C(1+i)^k</math>
 
Note that this is a [[geometric series]], with the initial value being ''a'' = ''C'', the multiplicative factor being 1 + ''i'', with ''n'' terms. Applying the formula for geometric series, we get
 
:<math>FVA \ = \frac{ C ( 1 - (1+i)^n )}{1 - (1+i)} \ = \frac{ C ( 1 - (1+i)^n )}{-i} </math>
 
The present value of the annuity (PVA) is obtained by simply dividing by <math>(1+i)^n</math>:
 
:<math>PVA \ = \frac{FVA}{(1+i)^n} = \frac{C}{i} \left( 1 - \frac{1}{(1+i)^n} \right)</math>
 
----
Another simple and intuitive way to derive the future value of an annuity is to consider an endowment, whose interest is paid as the annuity, and whose principal remains constant. The principal of this hypothetical endowment can be computed as that whose interest equals the annuity payment amount:
 
:<math>\text{Principal} \times i = C</math>
:<math>\text{Principal} = C / i</math> + goal
 
Note that no money enters or leaves the combined system of endowment principal + accumulated annuity payments, and thus the future value of this system can be computed simply via the future value formula:
:<math>FV = PV(1+i)^n</math>
 
Initially, before any payments, the present value of the system is just the endowment principal (<math>PV = C/i</math>). At the end, the future value is the endowment principal (which is the same) plus the future value of the total annuity payments (<math>FV = C/i + FVA</math>). Plugging this back into the equation:
:<math>\frac{C}{i} + FVA = \frac{C}{i} (1+i)^n</math>
:<math>FVA = \frac{C}{i} \left[ \left(1+i \right)^n - 1 \right]</math>
 
=== Perpetuity derivation ===
Without showing the formal derivation here, the perpetuity formula is derived from the annuity formula. Specifically, the term:
:<math> \left({1 - {1 \over { (1+i)^n } }}\right) </math>
can be seen to approach the value of 1 as ''n'' grows larger. At infinity, it is equal to 1, leaving <math> {C \over i} </math> as the only term remaining.
 
== Examples ==
=== Example 1:  Present value ===
One hundred euros to be paid 1 year from now, where the expected rate of return is 5% per year, is worth in today's money:
:<math> P \  =  \  F \times (P/F)  \ = F \times \ { 1 \over (1+i)^n }  \ = \ \frac{\ 100}{1.05} \ = \  95.24</math>
So the present value of €100  one year from now at 5% is €95.24.
 
=== Example 2:  Present value of an annuity — solving for the payment amount ===
Consider a 10 year mortgage where the principal amount ''P'' is $200,000 and the annual interest rate is 6%.
 
The number of monthly payments is
:<math> n = 10 {\rm \ years} \times 12 {\rm \ months \ per \ year} = 120 {\rm \ months}</math>
 
and the monthly interest rate is
:<math> i = { 6 {\rm \% \ per \ year} \over 12 {\rm \ months \ per \ year} } =  0.5 {\rm \% \ per \ month} </math>
 
The [[Annuity (finance theory)#Proof|annuity formula]] for (''A''/''P'') calculates the monthly payment:
 
:<math> A \ = \ P \times \left( A / P  \right) \ = \ P \times {  i (1+i)^n \over (1+i)^n - 1  }
\ = \ \$200,000 \times { 0.005(1.005)^{120}  \over (1.005)^{120} - 1 } </math>
 
::<math> = \ \$200,000 \times 0.01110205 \ = \ \$2,220.41 {\rm \ per \ month} </math>
 
This is considering an interest rate compounding monthly. If the interest were only to compound yearly at 6%, the monthly payment would be significantly different.
 
=== Example 3: Solving for the period needed to double money ===
Consider a deposit of $100 placed at 10% (annual). How many years are needed for the value of the deposit to double to $200?
 
Using the algrebraic identity that if:
:<math> x \ = \ b^y </math>
 
then
 
:<math> y \ = \ {\log (x) \over \log(b)} </math>
 
The present value formula can be rearranged such that:
 
:<math> y \ = \ {\log ({FV \over PV}) \over \log (1+i)} \ = \  {\log ({200 \over 100}) \over \log (1.10)} \ =\ 7.27  </math> ''(years)''
 
This same method can be used to determine the length of time needed to increase a deposit to any particular sum, as long as the interest rate is known. For the period of time needed to double an investment, the [[Rule of 72]] is a useful shortcut that gives a reasonable approximation of the period needed.
 
=== Example 4: What return is needed to double money? ===
Similarly, the present value formula can be rearranged to determine what [[rate of return]] is needed to accumulate a given amount from an investment. For example, $100 is invested today and $200 return is expected in five years; what rate of return (interest rate) does this represent?
 
The present value formula restated in terms of the interest rate is:
:<math> i \ = \ \left({FV \over PV}\right)^{1 \over n} - 1 \ = \ \left({200 \over 100}\right)^{1 \over 5} - 1 \ = \ 2^{0.20} - 1 \ = \ 0.15 \ = \ 15% </math>
 
:see also [[Rule of 72]]
 
=== Example 5: Calculate the value of a regular savings deposit in the future. ===
To calculate the future value of a stream of savings deposit in the future requires two steps, or, alternatively, combining the two steps into one large formula. First, calculate the present value of a stream of deposits of $1,000 every year for 20 years earning 7% interest:
 
:<math>PVA \,=\,A\cdot\frac{1-\frac{1}{\left(1+i\right)^n}}{i} \ = \ 1000\cdot\frac{1-\frac{1}{\left(1+.07\right)^{20}}}{.07} \ = \ 1000\cdot {1- 0.258 \over .07} \ = \ 1000 * 10.594 \ = \ $10,594</math>
 
This does not sound like very much, but remember - this is ''future money'' discounted back to its value ''today''; it is understandably lower. To calculate the future value (at the end of the twenty-year period):
:<math>  FV  \ = \  PV  (1+i)^n \ = \ $10,594 * (1+.07)^{20} \ = \ $10,594 * 3.87 \ = \ $40,995 </math>
 
These steps can be combined into a single formula:
:<math>FV \,=\,A\cdot\frac{1-\frac{1}{\left(1+i\right)^n}}{i} \cdot (1+i)^n \,=\,A\cdot\frac{\left(1+i\right)^n-1}{i}</math>
 
=== Example 6: Price/earnings (P/E) ratio ===
It is often mentioned that perpetuities, or securities with an indefinitely long maturity, are rare or unrealistic, and particularly those with a growing payment. In fact, many types of assets have characteristics that are similar to perpetuities. Examples might include income-oriented real estate, preferred shares, and even most forms of publicly-traded stocks. Frequently, the terminology may be slightly different, but are based on the fundamentals of time value of money calculations. The application of this methodology is subject to various qualifications or modifications, such as the [[Gordon model|Gordon growth model]].
 
For example, stocks are commonly noted as trading at a certain [[P/E ratio]]. The P/E ratio is easily recognized as a variation on the perpetuity or growing perpetuity formulae - save that the P/E ratio is usually cited as the ''inverse'' of the "rate" in the perpetuity formula.
 
If we substitute for the time being: the ''price'' of the stock for the present value; the [[earnings per share]] of the stock for the cash annuity; and, the discount rate of the stock for the interest rate, we can see that:
 
:<math>  {P \over E}  \ = \ {1 \over i} \ = \ {PV \over A } </math>
 
And in fact, the P/E ratio is analogous to the inverse of the interest rate (or discount rate).
 
:<math> { 1 \over P/E } \ = \ i </math>
 
Of course, stocks may have increasing earnings. The formulation above does not allow for growth in earnings, but to incorporate growth, the formula can be restated as follows:
 
:<math> { P \over E } \ = \ {1 \over (i-g)}</math>
 
If we wish to determine the implied rate of growth (if we are given the discount rate), we may solve for ''g'':
:<math> g \ = \ i - {E \over P}</math>
 
== Continuous compounding ==
Rates are sometimes converted into the [[continuous compounding|continuous compound interest]] rate equivalent because the continuous equivalent is more convenient (for example, more easily differentiated). Each of the formulæ above may be restated in their continuous equivalents. For example, the present value at time 0 of a future payment at time '''t''' can be restated in the following way, where '''[[E (mathematical constant)|e]]''' is the base of the [[natural logarithm]] and '''r''' is the continuously compounded rate:
:<math> \text{PV}  = \text{FV}\cdot e^{-rt} </math>
This can be generalized to discount rates that vary over time: instead of a constant discount rate ''r,'' one uses a function of time ''r''(''t''). In that case the discount factor, and thus the present value, of a cash flow at time ''T'' is given by the [[integral]] of the continuously compounded rate ''r''(''t''):
:<math> \text{PV}  = \text{FV}\cdot \exp\left(-\int_0^T r(t)\,dt\right)</math>
Indeed, a key reason for using continuous compounding is to simplify the analysis of varying discount rates and to allow one to use the tools of calculus. Further, for interest accrued and capitalized overnight (hence compounded daily), continuous compounding is a close approximation for the actual daily compounding. More sophisticated analysis includes the use of [[#Differential equations|differential equations]], as detailed below.
 
=== Examples ===
Using continuous compounding yields the following formulas for various instruments:
;Annuity:
:<math> \ PV \ = \ {A(1-e^{-rt}) \over e^r -1}</math>
;Perpetuity:
:<math> \ PV  \ = \  {A \over e^r - 1} </math>
;Growing annuity:
:<math> \ PV  \ = \  {A(1-e^{-(r-g)t}) \over e^{(r-g)} - 1} </math>
;Growing perpetuity:
:<math> \ PV  \ = \  {A \over e^{(r-g)} - 1} </math>
;Annuity with continuous payments:
:<math> \ PV  \ = \  { 1 - e^{(-rt)} \over r } </math>
 
== Differential equations ==
[[Ordinary differential equation|Ordinary]] and [[partial differential equation|partial]] [[differential equation]]s (ODEs and PDEs) – equations involving derivatives and one (respectively, multiple) variables are ubiquitous in more advanced treatments of [[financial mathematics]]. While time value of money can be understood without using the framework of differential equations, the added sophistication sheds additional light on time value, and provides a simple introduction before considering more complicated and less familiar situations. This exposition follows {{Harv|Carr|Flesaker|2006|loc = pp. 6–7}}.
 
The fundamental change that the differential equation perspective brings is that, rather than computing a ''number'' (the present value ''now''), one computes a ''function'' (the present value now or at any point in ''future''). This function may then be analyzed – how does its value change over time – or compared with other functions.
 
Formally, the statement that "value decreases over time" is given by defining the [[linear differential operator]] <math>\mathcal{L}</math> as:
:<math>\mathcal{L} := -\partial_t + r(t).</math>
This states that values decreases (−) over time (∂<sub>''t''</sub>) at the discount rate (''r''(''t'')). Applied to a function it yields:
:<math>\mathcal{L} f = -\partial_t f(t) + r(t) f(t).</math>
For an instrument whose payment stream is described by ''f''(''t''), the value ''V''(''t'') satisfies the [[inhomogeneous differential equation|inhomogeneous]] [[first-order differential equation|first-order ODE]] <math>\mathcal{L}V = f</math> ("inhomogeneous" is because one has ''f'' rather than 0, and "first-order" is because one has first derivatives but no higher derivatives) – this encodes the fact that when any cash flow occurs, the value of the instrument changes by the value of the cash flow (if you receive a $10 coupon, the remaining value decreases by exactly $10).
 
The standard technique tool in the analysis of ODEs is the use of [[Green's function]]s, from which other solutions can be built. In terms of time value of money, the Green's function (for the time value ODE) is the value of a bond paying $1 at a single point in time ''u'' – the value of any other stream of cash flows can then be obtained by taking combinations of this basic cash flow. In mathematical terms, this instantaneous cash flow is modeled as a [[delta function]] <math>\delta_u(t) := \delta(t-u).</math>
 
The Green's function for the value at time ''t'' of a $1 cash flow at time ''u'' is
:<math>b(t;u) := H(u-t)\cdot \exp\left(-\int_t^u r(v)\,dv\right)</math>
where ''H'' is the [[Heaviside step function]] – the notation "<math>;u</math>" is to emphasize that ''u'' is a ''parameter'' (fixed in any instance – the time when the cash flow will occur), while ''t'' is a ''variable'' (time). In other words, future cash flows are exponentially discounted (exp) by the sum (integral, <math>\textstyle{\int}</math>) of the future discount rates (<math>\textstyle{\int_t^u}</math> for future, ''r''(''v'') for discount rates), while past cash flows are worth 0 (<math>H(u-t) = 1 \text{ if } t < u, 0 \text{ if } t > u</math>), because they have already occurred. Note that the value ''at'' the moment of a cash flow is not well-defined – there is a discontinuity at that point, and one can use a convention (assume cash flows have already occurred, or not already occurred), or simply not define the value at that point.
 
In case the discount rate is constant, <math>r(v) \equiv r,</math> this simplifies to
:<math>b(t;u) = H(u-t)\cdot e^{-(u-t)r} = \begin{cases} e^{-(u-t) r} & t < u\\ 0 & t > u,\end{cases}</math>
where <math>(u-t)</math> is "time remaining until cash flow".
 
Thus for a stream of cash flows ''f''(''u'') ending by time ''T'' (which can be set to <math>T = +\infty</math> for no time horizon) the value at time ''t,'' <math>V(t;T)</math> is given by combining the values of these individual cash flows:
:<math>V(t;T) = \int_t^T f(u) b(t;u)\,du.</math>
This formalizes time value of money to future values of cash flows with varying discount rates, and is the basis of many formulas in financial mathematics, such as the [[Black–Scholes formula]] with [[Black–Scholes#Interest rate curve|varying interest rates]].
 
== See also ==
* [[Actuarial science]]
* [[Net present value]]
* [[Option time value]]
* [[Discounting]]
* [[Discounted cash flow]]
* [[Exponential growth]]
* [[Hyperbolic discounting]]
* [[Internal rate of return]]
* [[Perpetuity]]
* [[Real versus nominal value (economics)]]
* [[Time preference]]
* [[Earnings growth]]
 
== References ==
{{reflist}}
{{refbegin}}
* {{ Citation | title = Robust Replication of Default Contingent Claims (presentation slides) | first1 = Peter | last1 = Carr | first2 = Bjorn | last2 = Flesaker | year = 2006 | publisher = [[Bloomberg LP]] | url = http://www.usc.edu/schools/business/FBE/seminars/papers/FMath_10-17-06_CARR_slides.pdf | postscript =. See also [http://www.fields.utoronto.ca/audio/06-07/finance_seminar/flesaker/ Audio Presentation] and [http://www.usc.edu/schools/business/FBE/seminars/papers/FMath_10-17-06_CARR_RRDCC3.pdf paper]. }}
* Crosson, S.V., and Needles, B.E.(2008).  Managerial Accounting (8th Ed). Boston: Houghton Mifflin Company.
{{refend}}
 
== External links ==
* [http://www.money-zine.com/Calculators/Retirement-Calculators/Present-Value-Annuity-Calculator/ Present Value Annuity Calculator]
* [http://www.investopedia.com/calculator/AnnuityFV.aspx Future Value of an Annuity]
* [http://www.farsightsoft.com/financial-calculator/time-value-of-money.html Time Value of Money Calculator by Farsight Calculator]
* [http://www.studyfinance.com/lessons/timevalue/index.mv Time Value of Money hosted by the University of Arizona]
* [http://www.swlearning.com/finance/brigham/ifm8e/web_chapters/webchapter28.pdf Time Value of Money Ebook]
* [http://data.bls.gov/cgi-bin/cpicalc.pl Inflation calculator]
 
{{Time Topics}}
 
{{DEFAULTSORT:Time Value Of Money}}
<!-- Categories -->
[[Category:Actuarial science]]
[[Category:Basic financial concepts]]
[[Category:Money]]
[[Category:Time-based economics]]
 
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[[cs:Časová hodnota peněz]]
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Revision as of 08:35, 10 August 2014

Template:General relativity sidebar

In physics, the world line of an object is the unique path of that object as it travels through 4-dimensional spacetime. The concept of "world line" is distinguished from the concept of "orbit" or "trajectory" (such as an orbit in space or a trajectory of a truck on a road map) by the time dimension, and typically encompasses a large area of spacetime wherein perceptually straight paths are recalculated to show their (relatively) more absolute position states — to reveal the nature of special relativity or gravitational interactions. The idea of world lines originates in physics and was pioneered by Hermann Minkowski. The term is now most often used in relativity theories (i.e., special relativity and general relativity).

However, world lines are a general way of representing the course of events. The use of it is not bound to any specific theory. Thus in general usage, a world line is the sequential path of personal human events (with time and place as dimensions) that marks the history of a person[1] — perhaps starting at the time and place of one's birth until one's death. The log book of a ship is a description of the ship's world line, as long as it contains a time tag attached to every position. The world line allows one to calculate the speed of the ship, given a measure of distance (a so-called metric) appropriate for the curved surface of the Earth.

Usage in physics

In physics, a world line of an object (approximated as a point in space, e.g., a particle or observer) is the sequence of spacetime events corresponding to the history of the object. A world line is a special type of curve in spacetime. Below an equivalent definition will be explained: A world line is a time-like curve in spacetime. Each point of a world line is an event that can be labeled with the time and the spatial position of the object at that time.

For example, the orbit of the Earth in space is approximately a circle, a three-dimensional (closed) curve in space: the Earth returns every year to the same point in space. However, it arrives there at a different (later) time. The world line of the Earth is helical in spacetime (a curve in a four-dimensional space) and does not return to the same point.

Spacetime is the collection of points called events, together with a continuous and smooth coordinate system identifying the events. Each event can be labeled by four numbers: a time coordinate and three space coordinates; thus spacetime is a four-dimensional space. The mathematical term for spacetime is a four-dimensional manifold. The concept may be applied as well to a higher-dimensional space. For easy visualizations of four dimensions, two space coordinates are often suppressed. The event is then represented by a point in a Minkowski diagram, which is a plane usually plotted with the time coordinate, say , upwards and the space coordinate, say horizontally. As expressed by F.R. Harvey

A curve M in [spacetime] is called a worldline of a particle if its tangent is future timelike at each point. The arclength parameter is called proper time and usually denoted τ. The length of M is called the proper time of the worldline or particle. If the worldline M is a line segment, then the particle is said to be in free fall.[2]

A world line traces out the path of a single point in spacetime. A world sheet is the analogous two-dimensional surface traced out by a one-dimensional line (like a string) traveling through spacetime. The world sheet of an open string (with loose ends) is a strip; that of a closed string (a loop) is a volume.

Once the object is not approximated as a mere point but has extended volume, it traces out not a world line but rather a world tube.

World lines as a tool to describe events

World line, worldsheet, and world volume, as they are derived from particles, strings, and branes.

A one-dimensional line or curve can be represented by the coordinates as a function of one parameter. Each value of the parameter corresponds to a point in spacetime and varying the parameter traces out a line. So in mathematical terms a curve is defined by four coordinate functions (where usually denotes the time coordinate) depending on one parameter . A coordinate grid in spacetime is the set of curves one obtains if three out of four coordinate functions are set to a constant.

Sometimes, the term world line is loosely used for any curve in spacetime. This terminology causes confusions. More properly, a world line is a curve in spacetime which traces out the (time) history of a particle, observer or small object. One usually takes the proper time of an object or an observer as the curve parameter along the world line.

Trivial examples of spacetime curves

Three different world lines representing travel at different constant speeds. t is time and x distance.

A curve that consists of a horizontal line segment (a line at constant coordinate time), may represent a rod in spacetime and would not be a world line in the proper sense. The parameter traces the length of the rod.

A line at constant space coordinate (a vertical line in the convention adopted above) may represent a particle at rest (or a stationary observer). A tilted line represents a particle with a constant coordinate speed (constant change in space coordinate with increasing time coordinate). The more the line is tilted from the vertical, the larger the speed.

Two world lines that start out separately and then intersect, signify a collision or "encounter." Two world lines starting at the same event in spacetime, each following its own path afterwards, may represent the decay of a particle into two others or the emission of one particle by another.

World lines of a particle and an observer may be interconnected with the world line of a photon (the path of light) and form a diagram which depicts the emission of a photon by a particle which is subsequently observed by the observer (or absorbed by another particle).

Tangent vector to a world line, four-velocity

The four coordinate functions defining a world line, are real functions of a real variable and can simply be differentiated in the usual calculus. Without the existence of a metric (this is important to realize) one can speak of the difference between a point on the curve at the parameter value and a point on the curve a little (parameter ) farther away. In the limit , this difference divided by defines a vector, the tangent vector of the world line at the point . It is a four-dimensional vector, defined in the point . It is associated with the normal 3-dimensional velocity of the object (but it is not the same) and therefore called four-velocity , or in components:

where the derivatives are taken at the point , so at .

All curves through point p have a tangent vector, not only world lines. The sum of two vectors is again a tangent vector to some other curve and the same holds for multiplying by a scalar. Therefore all tangent vectors in a point p span a linear space, called the tangent space at point p. For example, taking a 2-dimensional space, like the (curved) surface of the Earth, its tangent space at a specific point would be the flat approximation of the curved space.

World lines in special relativity

So far a world line (and the concept of tangent vectors) has been described without a means of quantifying the interval between events. The basic mathematics is as follows: The theory of special relativity puts some constraints on possible world lines. In special relativity the description of spacetime is limited to special coordinate systems that do not accelerate (and so do not rotate either), called inertial coordinate systems. In such coordinate systems, the speed of light is a constant. The structure of spacetime is determined by a bilinear form η which gives a real number for each pair of events. The bilinear form is sometimes called a spacetime metric, but since distinct events sometimes result in a zero value, unlike metrics in metric spaces of mathematics, the bilinear form is not a mathematical metric on spacetime.

World lines of particles/objects at constant speed are called geodesics. In special relativity these are straight lines in Minkowski space.

Often the time units are chosen such that the speed of light is represented by lines at a fixed angle, usually at 45 degrees, forming a cone with the vertical (time) axis. In general, curves in spacetime can be of three types:

  • light-like curves, having at each point the speed of light. They form a cone in spacetime, dividing it into two parts. The cone is three-dimensional in spacetime, appears as a line in drawings with two dimensions suppressed, and as a cone in drawings with one spatial dimension suppressed.
An example of a light cone, the three-dimensional surface of all possible light rays arriving at and departing from a point in spacetime. Here, it is depicted with one spatial dimension suppressed.
  • time-like curves, with a speed less than the speed of light. These curves must fall within a cone defined by light-like curves. In our definition above: world lines are time-like curves in spacetime.
  • space-like curves falling outside the light cone. Such curves may describe, for example, the length of a physical object. The circumference of a cylinder and the length of a rod are space-like curves.

At a given event on a world line, spacetime (Minkowski space) is divided into three parts.

  • The future of the given event is formed by all events that can be reached through time-like curves lying within the future light cone.
  • The past of the given event is formed by all events that can influence the event (that is, which can be connected by world lines within the past light cone to the given event).
  • The lightcone at the given event is formed by all events that can be connected through light rays with the event. When we observe the sky at night, we basically see only the past light cone within the entire spacetime.
  • Elsewhere is the region between the two light cones. Points in an observer's elsewhere are inaccessible to her/him; only points in the past can send signals to the observer. In ordinary laboratory experience, using common units and methods of measurement, it may seem that we look at the present, but in fact there is always a delay time for light to propagate. For example, we see the Sun as it was about 8 minutes ago, not as it is "right now." Unlike the present in Galilean/Newtonian theory, the elsewhere is thick; it is not a 3-dimensional volume but is instead a 4-dimensional spacetime region.
    • Included in "elsewhere" is the simultaneous hyperplane, which is defined for a given observer by a space which is hyperbolic-orthogonal to her/his world line. It is really three-dimensional, though it would be a 2-plane in the diagram because we had to throw away one dimension to make an intelligible picture. Although the light cones are the same for all observers at a given spacetime event, different observers, with differing velocities but coincident at the event (point) in the spacetime, have world lines that cross each other at an angle determined by their relative velocities, and thus they have different simultaneous hyperplanes.
    • The present often means the single spacetime event being considered.

Simultaneous hyperplane

Since a world line determines a velocity 4-vector that is time-like, the Minkowski form determines a linear function by Let N be the null space of this linear functional. Then N is called the simultaneous hyperplane with respect to v. The relativity of simultaneity is a statement that N depends on v. Indeed, N is the orthogonal complement of v with respect to η. When two world lines u and w are related by then they share the same simultaneous hyperplane. This hyperplane exists mathematically, but physical relations in relativity involve the movement of information by light. For instance, the traditional electro-static force described by Coulomb's law may be pictured in a simultaneous hyperplane, but relativistic relations of charge and force involve retarded potentials.

World lines in general relativity

The use of world lines in general relativity is basically the same as in special relativity, with the difference that spacetime can be curved. A metric exists and its dynamics are determined by the Einstein field equations and are dependent on the mass distribution in spacetime. Again the metric defines lightlike (null), spacelike and timelike curves. Also, in general relativity, world lines are timelike curves in spacetime, where timelike curves fall within the lightcone. However, a lightcone is not necessarily inclined at 45 degrees to the time axis. However, this is an artifact of the chosen coordinate system, and reflects the coordinate freedom (diffeomorphism invariance) of general relativity. Any timelike curve admits a comoving observer whose "time axis" corresponds to that curve, and, since no observer is privileged, we can always find a local coordinate system in which lightcones are inclined at 45 degrees to the time axis. See also for example Eddington-Finkelstein coordinates.

World lines of free-falling particles or objects (such as planets around the Sun or an astronaut in space) are called geodesics.

World lines in literature

A popular description of human world lines was given by J. C. Fields at the University of Toronto in the early days of relativity. As described by Toronto lawyer Norman Robertson:

I remember [Fields] lecturing at one of the Saturday evening lectures at the Royal Canadian Institute. It was advertised to be a "Mathematical Fantasy" — and it was! The substance of the exercise was as follows: He postulated that, commencing with his birth, every human being had some kind of spiritual aura with a long filament or thread attached, that travelled behind him throughout his life. He then proceeded in imagination to describe the complicated entanglement every individual became involved in his relationship to other individuals, comparing the simple entanglements of youth to those complicated knots that develop in later life.[3]

Because they oversimplify world lines, which traverse four-dimensional spacetime, into one-dimensional timelines, almost all purported science-fiction stories about time travel are actually wishful fantasy stories. Some device or superpowered person is generally portrayed as departing from one point in time, and with little or no subjective lag, arriving at some other point in time — but at the same literally geographic point in space, typically inside a workshop or near some historic site. However, in reality the planet, its solar system, and its galaxy would all be at vastly different spatial positions on arrival. Thus, the time travel mechanism would also have to provide instantaneous teleportation, with infinitely accurate and simultaneous adjustment of final 3D location, linear momentum, and angular momentum.

World lines appeared in Jeffrey Rowland's webcomic Wigu Adventures as part of the "Magical Adventures in Space" side story line, in which Topato Potato and Sheriff Pony accidentally delete a world line relating to the initial creation of Earth from asteroids, causing the Earth to never have existed. According to this webcomic, calculating the exact coordinates of a world line is "embarrassingly simple", and the deletion of the world line specified is executed by making a call and entering the coordinates of the world line, and pressing 3.[4]

Author Oliver Franklin published a science fiction work in 2008 entitled World Lines in which he related a simplified explanation of the hypothesis for laymen.[5]

In the short story Life-Line, author Robert A. Heinlein describes the world line of a person:[6]

He stepped up to one of the reporters. "Suppose we take you as an example. Your name is Rogers, is it not? Very well, Rogers, you are a space-time event having duration four ways. You are not quite six feet tall, you are about twenty inches wide and perhaps ten inches thick. In time, there stretches behind you more of this space-time event, reaching to perhaps nineteen-sixteen, of which we see a cross-section here at right angles to the time axis, and as thick as the present. At the far end is a baby, smelling of sour milk and drooling its breakfast on its bib. At the other end lies, perhaps, an old man someplace in the nineteen-eighties.
"Imagine this space-time event that we call Rogers as a long pink worm, continuous through the years, one end in his mother's womb, and the other at the grave..."

Heinlein's Methuselah's Children uses the term, as does James Blish's The Quincunx of Time (expanded from "Beep").

A visual novel named Steins;Gate, produced by 5pb., tells a story based on the shifting of world lines. Its series of works under the name hypothetical science ADV also utilized the concept.

See also

References

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  1. George Gamow (1970) My World Line: An Informal Autobiography, Viking Press, ISBN 0-670-50376-2
  2. F. Reese Harvey (1990) Spinors and calibrations, pages 62,3, Academic Press, ISBN 0-12-329650-1
  3. Gilbert de Beauregard Robinson (1979) The Mathematics Department in the University of Toronto, p. 19, University of Toronto Press ISBN 0-7727-1600-5
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