This section is optional since it is quite complex in terms of mathematical expression. Skipping this section would not have any impact on the understanding of the other chapters. Thus, this section is for advanced learners. Up to now in this chapter, we have learnt the usage of several functions, such as pv(), fv(), nper(), pmt(), and rate() included in the SciPy module or numpy.lib.financial submodule. The first general formula is related to the present value:
On the right-hand side of the preceding equation, the first one is the present value of one future cash flow, while the second part is the present value of annuity. The variable type takes a value of zero (default value); it is the present value of a normal annuity, while it is an annuity due if type takes a value of 1. The negative sign is for the sign convention. If using the same notation as that used for the functions contained in SciPy and numpy.lib.financial, we have the following formula...
