PRESENT_VALUE Function
Evaluates the net present value of a stream of equal periodic cash flows, which are subject to a given discount rate.
Usage
result = PRESENT_VALUE(rate, n_periods, payment, future_value, when)
Input Parameters
rate—Interest rate.
n_periods—Total number of periods.
payment—Payment made in each period.
future_value—The value, at some time in the future, of a current amount and a stream of payments.
when—Time in each period when the payment is made, either 0 for at the end of period or 1 for at the beginning of period.
Returned Value
result—The 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 PRESENT_VALUE computes the present value of an investment.
If rate = 0:
present_value + (payment)(n_periods) + future_value = 0
If rate ≠ 0:
Example
In this example, PRESENT_VALUE computes the present value of 20 payments of $500,000 per payment ($10 million) with an annual interest rate of 6%. The payment is made at the end of each period.
PRINT, PRESENT_VALUE(0.06, 20, 500000., 0., 0)
; PV-WAVE prints: -5.73496e+06
