Present Value

present_value.ipynb

{
 "cells": [
  {
   "cell_type": "code",
   "execution_count": 1,
   "metadata": {},
   "outputs": [],
   "source": [
    "import pandas as pd"
   ]
  },
  {
   "cell_type": "code",
   "execution_count": 2,
   "metadata": {},
   "outputs": [
    {
     "data": {
      "text/plain": [
       "556.8374181775592"
      ]
     },
     "execution_count": 2,
     "metadata": {},
     "output_type": "execute_result"
    }
   ],
   "source": [
    "def present_value(fv, i_rate, n_periods):\n",
    "    return fv / (1 + i_rate) ** n_periods\n",
    "\n",
    "present_value(1000, 0.05, 12)"
   ]
  },
  {
   "cell_type": "code",
   "execution_count": 3,
   "metadata": {},
   "outputs": [],
   "source": [
    "df = pd.DataFrame([(1000, 0.05, 12), (1000, 0.07, 12), (1000, 0.09, 12), (500, 0.02, 24)],\n",
    "                  columns=['fv', 'i_rate', 'n_periods'])"
   ]
  },
  {
   "cell_type": "code",
   "execution_count": 4,
   "metadata": {},
   "outputs": [
    {
     "data": {
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       "<table border=\"1\" class=\"dataframe\">\n",
       "  <thead>\n",
       "    <tr style=\"text-align: right;\">\n",
       "      <th></th>\n",
       "      <th>fv</th>\n",
       "      <th>i_rate</th>\n",
       "      <th>n_periods</th>\n",
       "    </tr>\n",
       "  </thead>\n",
       "  <tbody>\n",
       "    <tr>\n",
       "      <td>0</td>\n",
       "      <td>1000</td>\n",
       "      <td>0.05</td>\n",
       "      <td>12</td>\n",
       "    </tr>\n",
       "    <tr>\n",
       "      <td>1</td>\n",
       "      <td>1000</td>\n",
       "      <td>0.07</td>\n",
       "      <td>12</td>\n",
       "    </tr>\n",
       "    <tr>\n",
       "      <td>2</td>\n",
       "      <td>1000</td>\n",
       "      <td>0.09</td>\n",
       "      <td>12</td>\n",
       "    </tr>\n",
       "    <tr>\n",
       "      <td>3</td>\n",
       "      <td>500</td>\n",
       "      <td>0.02</td>\n",
       "      <td>24</td>\n",
       "    </tr>\n",
       "  </tbody>\n",
       "</table>\n",
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      ],
      "text/plain": [
       "     fv  i_rate  n_periods\n",
       "0  1000    0.05         12\n",
       "1  1000    0.07         12\n",
       "2  1000    0.09         12\n",
       "3   500    0.02         24"
      ]
     },
     "execution_count": 4,
     "metadata": {},
     "output_type": "execute_result"
    }
   ],
   "source": [
    "df"
   ]
  },
  {
   "cell_type": "code",
   "execution_count": 13,
   "metadata": {},
   "outputs": [],
   "source": [
    "for (index, row) in df.iterrows():\n",
    "    df.loc[index, 'pv'] = present_value(row.fv, row.i_rate, row.n_periods)"
   ]
  },
  {
   "cell_type": "code",
   "execution_count": 15,
   "metadata": {},
   "outputs": [],
   "source": [
    "df['pv2'] = df.apply(lambda r: present_value(r['fv'], r['i_rate'], r['n_periods']), axis=1)"
   ]
  },
  {
   "cell_type": "code",
   "execution_count": 16,
   "metadata": {},
   "outputs": [],
   "source": [
    "df['pv3'] = df['fv']/(1 + df['i_rate']) ** df['n_periods']"
   ]
  },
  {
   "cell_type": "code",
   "execution_count": 17,
   "metadata": {},
   "outputs": [
    {
     "data": {
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       "<table border=\"1\" class=\"dataframe\">\n",
       "  <thead>\n",
       "    <tr style=\"text-align: right;\">\n",
       "      <th></th>\n",
       "      <th>fv</th>\n",
       "      <th>i_rate</th>\n",
       "      <th>n_periods</th>\n",
       "      <th>pv</th>\n",
       "      <th>pv2</th>\n",
       "      <th>pv3</th>\n",
       "    </tr>\n",
       "  </thead>\n",
       "  <tbody>\n",
       "    <tr>\n",
       "      <td>0</td>\n",
       "      <td>1000</td>\n",
       "      <td>0.05</td>\n",
       "      <td>12</td>\n",
       "      <td>556.837418</td>\n",
       "      <td>556.837418</td>\n",
       "      <td>556.837418</td>\n",
       "    </tr>\n",
       "    <tr>\n",
       "      <td>1</td>\n",
       "      <td>1000</td>\n",
       "      <td>0.07</td>\n",
       "      <td>12</td>\n",
       "      <td>444.011959</td>\n",
       "      <td>444.011959</td>\n",
       "      <td>444.011959</td>\n",
       "    </tr>\n",
       "    <tr>\n",
       "      <td>2</td>\n",
       "      <td>1000</td>\n",
       "      <td>0.09</td>\n",
       "      <td>12</td>\n",
       "      <td>355.534725</td>\n",
       "      <td>355.534725</td>\n",
       "      <td>355.534725</td>\n",
       "    </tr>\n",
       "    <tr>\n",
       "      <td>3</td>\n",
       "      <td>500</td>\n",
       "      <td>0.02</td>\n",
       "      <td>24</td>\n",
       "      <td>310.860744</td>\n",
       "      <td>310.860744</td>\n",
       "      <td>310.860744</td>\n",
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      "text/plain": [
       "     fv  i_rate  n_periods          pv         pv2         pv3\n",
       "0  1000    0.05         12  556.837418  556.837418  556.837418\n",
       "1  1000    0.07         12  444.011959  444.011959  444.011959\n",
       "2  1000    0.09         12  355.534725  355.534725  355.534725\n",
       "3   500    0.02         24  310.860744  310.860744  310.860744"
      ]
     },
     "execution_count": 17,
     "metadata": {},
     "output_type": "execute_result"
    }
   ],
   "source": [
    "df"
   ]
  },
  {
   "cell_type": "code",
   "execution_count": 8,
   "metadata": {},
   "outputs": [
    {
     "name": "stdout",
     "output_type": "stream",
     "text": [
      "1.18 ms ± 58.3 µs per loop (mean ± std. dev. of 7 runs, 1000 loops each)\n"
     ]
    }
   ],
   "source": [
    "%timeit df.apply(lambda r: present_value(r['fv'], r['i_rate'], r['n_periods']), axis=1) "
   ]
  },
  {
   "cell_type": "code",
   "execution_count": 9,
   "metadata": {},
   "outputs": [
    {
     "name": "stdout",
     "output_type": "stream",
     "text": [
      "493 µs ± 45.3 µs per loop (mean ± std. dev. of 7 runs, 1000 loops each)\n"
     ]
    }
   ],
   "source": [
    "%timeit df['fv']/(1 + df['i_rate']) ** df['n_periods'] "
   ]
  },
  {
   "cell_type": "code",
   "execution_count": null,
   "metadata": {},
   "outputs": [],
   "source": []
  }
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