Exercise 3.3.2 Start with the cash flow of a level-payment mortgage with the lower monthly fixed interest rate r −x. From the monthly payment D, construct a cash flow that grows at a rate of x per month: D, Dex, De2x, De3x, . . . . Both x and r are continuously compounded. Verify that this new cash flow, discounted at r , has the same PV as that of the original mortgage. (This identity forms the basis of the graduated-payment mortgages (GPMs) [330].)