PgivenFivary: "Present equivalent of a series of future cash flows subject...

In iemisc: Irucka Embry's Miscellaneous Functions

"Present equivalent of a series of future cash flows subject to varying interest rates" (Engineering Economics)

Description

Compute P given F and i that varies

Usage

PgivenFivary(Fn, ik, k)

Arguments

Fn	numeric vector that contains the future value(s) at the end of a period n
ik	numeric vector that contains the effective interest rate(s) per period as a percent for the kth period
k	numeric vector that contains the kth period values

Details

P is expressed as

P = \frac{F_n}{\prod \limits_{k=1}^n{\left(1 + i_k\right)}}

P

the "present equivalent"

F_n

the "future cash flows subject to varying interest rates"

i_k

the "interest rate for the kth period"

k

the "number of interest periods"

Value

PgivenFivary numeric vector that contains the present value(s)

Author(s)

Irucka Embry

Source

1. r - Add a Column to a Dataframe From a List of Values - Stack Overflow answered by Matthew Plourde on Jun 21 2012. See https://stackoverflow.com/questions/11130037/add-a-column-to-a-dataframe-from-a-list-of-values/11130178.

2. r - Why does is.vector() return TRUE for list? - Stack Overflow answered by Andrie on May 17 2011. See https://stackoverflow.com/questions/6032772/why-does-is-vector-return-true-for-list/6032909.

References

William G. Sullivan, Elin M. Wicks, and C. Patrick Koelling, Engineering Economy, Fourteenth Edition, Upper Saddle River, New Jersey: Pearson/Prentice Hall, 2009, page 142, 162.

Examples

library(iemisc)

# Example for equation 4-31 from the Reference text (page 162)
PgivenFivary(Fn = 1000, ik = c(10, 12, 13, 10), k = 1)
# i1 is 10\%, i2 is 12\%, i3 is 14\%, and i4 is 10\% & k = 1 year

iemisc documentation built on Sept. 25, 2023, 5:09 p.m.