#### Overview of this book

Python for Finance
Credits
Acknowledgments
www.PacktPub.com
Preface
Free Chapter
Introduction and Installation of Python
13 Lines of Python to Price a Call Option
Introduction to Modules
Statistical Analysis of Time Series
Index

## The power function, floor, and remainder

For our FV=PV(1+R)^n, we use a power function. The floor function would give the largest integer smaller than the current value. The remainder is the value that remains after an integer division. Given a positive discount rate, the present value of a future cash flow is always smaller than its corresponding future value.

The following formula specifies the relationship between a present value and its future value:

In this formula, PV is the present value, FV is the future value, R is the cost of capital (discount rate) per period, and n is the number of periods. Assume that we would receive \$100 payment in two years and that the annual discount rate is 10 percent. What is the equivalent value today that we are willing to accept?

```>>>100/(1+0.1)**2
82.64462809917354
```

Here, `**` is used to perform a power function. The `%` operator is used to calculate the remainder. Refer to the following example for the implementation of these operators:

`>&gt...`