More financial functions

Bond Valuation and Analysis in Python

Joshua Mayhew

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The nper() function

Tells you number of periods required to grow PV to FV

import numpy_financial as npf
?npf.nper

Signature: npf.nper(rate, pmt, pv, fv=0)

Compute the number of periodic payments.


Parameters
rate : Rate of interest (per period)

pmt : Payment

pv : Present value

fv : (optional) Future value

The nper() function

How long to save USD 7,000 investing USD 270 per month at 5% per year compounded monthly?

import numpy_financial as npf
npf.nper(rate=0.05/12, pmt=-270, pv=0, fv=7000)

24.67

The pmt() function

Tells you the payment amount required to grow PV to FV

import numpy_financial as npf
?npf.pmt

Signature: npf.pmt(rate, nper, pv, fv=0)

Compute the payment against loan principal plus interest.


Given:
 * an interest `rate` compounded once per period, of which there are

 * `nper` total

 * a present value, `pv` (e.g., an amount borrowed)

 * a future value, `fv` (e.g., 0)


Return:
   the (fixed) periodic payment.

The pmt() function

We have borrowed USD 275,000 at an annual rate of 3.5% compounded monthly
What monthly payment to pay off a mortgage in ten years?

import numpy_financial as npf
npf.pmt(rate=0.035/12, nper=10*12, pv=275000, fv=0)

-2719.36

The rate() function

Tells you interest rate required to grow PV to FV

import numpy_financial as npf
?npf.rate

Signature: npf.rate(nper, pmt, pv, fv)

Compute the rate of interest per period.


Parameters
nper : Number of compounding periods

pmt : Payment

pv : Present value

fv : Future value

The rate() function

What investment return to retire in 30 years?
You save USD 1,500 each month and want to end up with USD 1 million.
Assume the investments you make have monthly compounding.

import numpy_financial as npf
12 * npf.rate(nper=30*12, pmt=-1500, pv=0, fv=1000000)

0.0377

Let's practice!

Bond Valuation and Analysis in Python