Introduction to Financial Concepts in Python
Dakota Wixom
Quantitative Finance Analyst
Goal: Save $1.0 million over 40 years. Assume an average 7% rate of return per year.
import numpy as np
np.pmt(rate=((1+0.07)**1/12 - 1), nper=12*40, pv=0, fv=1000000)
-404.61
What if your investments only returned 5% on average?
import numpy as np
np.pmt(rate=((1+0.05)**1/12 - 1), nper=12*40, pv=0, fv=1000000)
-674.53
Goal: Save $1.0 million over 25 years. Assume an average 7% rate of return per year.
import numpy as np
np.pmt(rate=((1+0.07)**1/12 - 1), nper=12*25, pv=0, fv=1000000)
-1277.07
What if your investments only returned 5% on average?
import numpy as np
np.pmt(rate=((1+0.05)**1/12 - 1), nper=12*40, pv=0, fv=1000000)
-1707.26
Assume an average rate of inflation of 3% per year
import numpy as np
np.fv(rate=-0.03, nper=25, pv=-1000000, pmt=0)
466974.70
Introduction to Financial Concepts in Python