Time for action – getting the present value
Let's reverse compute the present value with the numbers from the Time for action – determining the future value section:
Plug in the figures from the Time for action – determining the future value section:
print("Present value", np.pv(0.03/4, 5 * 4, -10, 1376.09633204))This gives us 1000 as expected apart from a tiny numerical error. Actually, it is not an error but a representation issue. We are dealing here with outgoing cash flow, that is the reason for the negative value:
Present value -999.999999999
What just happened?
We did the reverse computation of the Time for action – determining the future value section to get the present value from the future value. This was done with the NumPy pv() function. ...
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