Time for action – getting the present value

Let's reverse—compute the present value with numbers from the previous tutorial.

Plug in the figures from the Time for action – determining future value tutorial to calculate the present value.

print "Present value", np.pv(0.03/4, 5 * 4, -10, 1376.09633204)

This gives us 1,000 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 previous Time for action tutorial to get the present value from the future value. This was done with the NumPy pv function.