NET_PRES_VALUE Function
Evaluates the net present value of a stream of unequal periodic cash flows, which are subject to a given discount rate.
Usage
result = NET_PRES_VALUE (rate, values)
Input Parameters
rate—Interest rate per period.
values—One-dimensional array of equally-spaced cash flows.
Returned Value
result—The net present value of an investment. If no result can be computed, NaN is returned.
Input Keywords
Double—If present and nonzero, double precision is used.
Discussion
Function NET_PRES_VALUE computes the net present value of an investment. Net present value is the current value of a stream of payments, after discounting the payments using some interest rate.
It is found by solving the following with count = N_ELEMENTS (values):
where valuei = the ith cash flow.
Example
In this example, NET_PRES_VALUE computes the net present value of a $10 million prize paid in 20 years ($500,000 per year) with an annual interest rate of 6%.
rate = 0.06
value = FLTARR(20)
value(*) = 500000.
PRINT, NET_PRES_VALUE(rate, value)
; PV-WAVE prints: 5.73496e+06
