Examples#
This gallery walks through every public feature of financialkit.time_value:
compounding and equivalent rates, present and net present value, annuities
and perpetuities, the internal rate of return and its pitfalls, amortizing
loans and the APR, and day-count conventions.
Each script in this gallery is self-contained and can be run directly with
python examples/time_value/<section>/<script>.py.
Sections#
present_value – Fibonacci’s present value, Fisher’s real rate and Fisher’s net present value.
compounding – Pacioli’s rule of 72, Witt’s compound-interest tables and Bernoulli’s continuous compounding.
annuities – De Witt’s life annuities, the consol perpetuity and Price’s sinking fund.
irr – the internal rate of return, Lorie and Savage’s multiple IRRs and Baldwin’s modified IRR.
amortization – the fully amortizing mortgage and the Truth-in-Lending APR.
day_counts – 30/360 accrued interest and the actual/actual family.
Amortization#
Level-payment loans that repay themselves, and the APR that the Truth in Lending Act made lenders disclose.
Annuities#
Streams of level payments: De Witt’s life annuities, the perpetual consol, and Price’s sinking fund.
Compounding#
Interest on interest: Pacioli’s rule of 72, Witt’s compound-interest tables, and Bernoulli’s limit of ever more frequent compounding.
Day counts#
Turning dates into year fractions: 30/360 accrued interest and ISDA’s actual/actual conventions.
Internal rate of return#
The rate that zeroes a project’s NPV, the projects that have several, and Baldwin’s modified IRR.
Present value#
Discounting payments to one comparable number: Fibonacci’s present value, Fisher’s real and nominal rates, and Fisher’s net present value.
Fibonacci’s present value: comparing payment schedules
Fisher’s net present value: choosing between income streams