fin_interest: Compute the value of a principal & annual deposits at a...

In umx: Structural Equation Modeling and Twin Modeling in R

Compute the value of a principal & annual deposits at a compound interest over a number of years

Description

Allows you to determine the final value of an initial principal (with optional periodic deposits), over a number of years (yrs) at a given rate of interest. Principal and deposits are optional. You control compounding periods each year (n) and whether deposits occur at the beginning or end of the year. The function outputs a nice table of annual returns, formats the total using a user-settable currency symbol. Can also report using a web table.

notes: Graham valuation: fair P/E = 9 + (1.5 * growth%). e.g. $INTEL fair P/E = 9+.53 = 10.5 up to 9+210 = 29 Can move the weighting between a conservative .5 and an optimistic 2 (in terms of how long the growth will last and how low the hurdle rate is)

Usage

fin_interest(
  principal = 0,
  deposits = 0,
  inflate = 0,
  interest = 0.05,
  yrs = 10,
  final = NULL,
  n = 12,
  when = "beginning",
  symbol = NULL,
  largest_with_cents = 0,
  baseYear = as.numeric(format(Sys.time(), "%Y")),
  table = TRUE,
  report = c("markdown", "html")
)

Arguments

principal	The initial investment at time 0.
deposits	Optional periodic additional investment each year.
inflate	How much to inflate deposits over time (default = 0)
interest	Annual interest rate (default = .05)
yrs	Duration of the investment (default = 10).
final	if set (default = NULL), returns the rate required to turn principal into final after yrs (principal defaults to 1)
n	Compounding intervals per year (default = 12 (monthly), 365 for daily)
when	Deposits made at the "beginning" (of each year) or "end"
symbol	Currency symbol to embed in the result.
largest_with_cents	Default = 0
baseYear	Default = current year (for table row labels)
table	Whether to print a table of annual returns (default TRUE)
report	"markdown" or "html",

Value

• Value of balance after yrs of investment.

References

• https://en.wikipedia.org/wiki/Compound_interest

See Also

• umx_set_dollar_symbol(), fin_percent(), fin_NI(), fin_valuation()

Other Miscellaneous Functions: deg2rad(), fin_JustifiedPE(), fin_NI(), fin_percent(), fin_ticker(), fin_valuation(), rad2deg(), umxBrownie()

Examples

## Not run: 
# 1. Value of a principal after yrs years at 5% return, compounding monthly.
# Report in browser as a nice table of annual returns and formatted totals.
fin_interest(principal = 5000, interest = 0.05, rep= "html")

## End(Not run)

# Report as a nice markdown table
fin_interest(principal = 5000, interest = 0.05, yrs = 10)

umx_set_dollar_symbol("£")
# 2 What rate is needed to increase principal to final value in yrs time?
fin_interest(final = 1.4, yrs=5)
fin_interest(principal = 50, final=200, yrs = 5)

# 3. What's the value of deposits of $100/yr after 10 years at 7% return?
fin_interest(deposits = 100, interest = 0.07, yrs = 10, n = 12)

# 4. What's the value of $20k + $100/yr over 10 years at 7% return?
fin_interest(principal= 20e3, deposits= 100, interest= .07, yrs= 10, symbol="$")

# 5. What is $10,000 invested at the end of each year for 5 years at 6%?
fin_interest(deposits = 10e3, interest = 0.06, yrs = 5, n=1, when= "end")

# 6. What will $20k be worth after 10 years at 15% annually (n=1)?
fin_interest(deposits=20e3, interest = 0.15, yrs = 10, n=1, baseYear=1)
# $466,986

# manual equivalent
sum(20e3*(1.15^(10:1))) # 466985.5

# 7. Annual (rather than monthly) compounding (n=1)
fin_interest(deposits = 100, interest = 0.07, yrs = 10, n=1)

# 8 Interest needed to increase principal to final value in yrs time.
fin_interest(principal = 100, final=200, yrs = 5)

umx documentation built on May 29, 2024, 5:40 a.m.