Function InvestmentConstantPresentValue(FutureValue, Payment, NumberPeriods, InterestRate, Type)

InvestmentConstantPresentValue

The function InvestmentConstantPresentValue returns the present value of an investment based on periodic, constant payments and a constant interest rate.

InvestmentConstantPresentValue(
    FutureValue,             ! (input) numerical expression
    Payment,                 ! (input) numerical expression
    NumberPeriods,           ! (input) numerical expression
    InterestRate,            ! (input) numerical expression
    Type                     ! (input) numerical expression
    )

Arguments

FutureValue

The cash balance you want to attain after the last payment is made. FutureValue must be a real number.

Payment

The periodic payment for the investment. Payment must be a real number.

NumberPeriods

The total number of payment periods for the investment. NumberPeriods must be a positive integer.

InterestRate

The interest rate per period for the investment. InterestRate must be a numerical expression in the range \((-1, 1)\).

Type

Indicates when payments are due. \(Type = 0\): Payments are due at the end of each period. \(Type = 1\): Payments are due at the beginning of each period.

Return Value

The function InvestmentConstantPresentValue returns the total amount that a series of future payments is worth at this moment.

Note

• This function can be used in an objective function or constraint and the input parameters FutureValue, Payment and InterestRate can be used as a variable.

• The function InvestmentConstantPresentValue is similar to the Excel function PV.

Example

Paying regularly money over time, resolves a debt:

! Paying 10 per period,
! for 10 periods, and
! an interest of 4%,
! resolves a debt of 81
_p_constPresentValue := InvestmentConstantPresentValue(
    FutureValue   :  0,
    Payment       :  10,
    NumberPeriods :  10,
    InterestRate  :  0.04,
    type          :  0);
block where single_column_display := 1, listing_number_precision := 6 ;
    display _p_constPresentValue;
endblock ;

The present value computed is negative, indicating a debt:

_p_constPresentValue := -81.108958 ;

References

• General equations for investments with constant, periodic payments.