Book Image

NumPy: Beginner's Guide

By : Ivan Idris
Book Image

NumPy: Beginner's Guide

By: Ivan Idris

Overview of this book

Table of Contents (21 chapters)
NumPy Beginner's Guide Third Edition
Credits
About the Author
About the Reviewers
www.PacktPub.com
Preface
NumPy Functions' References
Index

Time for action – determining the future value


The future value gives the value of a financial instrument at a future date, based on certain assumptions. The future value depends on four parameters—the interest rate, the number of periods, a periodic payment, and the present value.

Note

Read more about future value at http://en.wikipedia.org/wiki/Future_value. The formula for future value with compound interest is as follows:

In the preceding formula, PV is the present value, r is the interest rate, and n is the number of periods.

In this section, let's take an interest rate of 3 percent, a quarterly payment of 10 for 5 years, and a present value of 1000. Call the fv() function with the appropriate values (negative values represent outgoing cash flow):

print("Future value", np.fv(0.03/4, 5 * 4, -10, -1000))

The future value is as follows:

Future value 1376.09633204

If we vary the number of years we save and keep the other parameters constant, we get the following plot:

What just happened?

We calculated...