quant finance and algo trading - setting up time value of money.ipynb

{
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   "cell_type": "code",
   "execution_count": 14,
   "metadata": {},
   "outputs": [],
   "source": [
    "from math import exp"
   ]
  },
  {
   "cell_type": "code",
   "execution_count": 15,
   "metadata": {},
   "outputs": [],
   "source": [
    "def discrete_future_value(x,r,n):\n",
    "    return x*(1+r)**n"
   ]
  },
  {
   "cell_type": "code",
   "execution_count": 16,
   "metadata": {},
   "outputs": [],
   "source": [
    "def discrete_present_value(x,r,n):\n",
    "    return x*(1+r)**-n"
   ]
  },
  {
   "cell_type": "code",
   "execution_count": 17,
   "metadata": {},
   "outputs": [],
   "source": [
    "def continuous_future_value(x,r,t):\n",
    "    return x*exp(r*t)"
   ]
  },
  {
   "cell_type": "code",
   "execution_count": 18,
   "metadata": {},
   "outputs": [],
   "source": [
    "def continuous_present_value(x,r,t):\n",
    "    return x*exp(-r*t)"
   ]
  },
  {
   "cell_type": "code",
   "execution_count": 21,
   "metadata": {},
   "outputs": [
    {
     "name": "stdout",
     "output_type": "stream",
     "text": [
      "Future value of $100 in 5 years (discrete model):   127.62815625000003\n",
      "Future value of $100 in 5 years (continuous model):   128.40254166877415\n",
      "Present value of $100 in 5 years (discrete model):   78.35261664684589\n",
      "Presnt value of $100 in 5 years (continuous model):   77.8800783071405\n"
     ]
    }
   ],
   "source": [
    "if __name__ == \"__main__\":\n",
    "    x = 100\n",
    "    r = 0.05\n",
    "    n = 5\n",
    "    \n",
    "    print('Future value of $100 in 5 years (discrete model):  ', discrete_future_value(x,r,n))\n",
    "    print('Future value of $100 in 5 years (continuous model):  ', continuous_future_value(x,r,n))\n",
    "    print('Present value of $100 in 5 years (discrete model):  ', discrete_present_value(x,r,n))\n",
    "    print('Presnt value of $100 in 5 years (continuous model):  ', continuous_present_value(x,r,n))"
   ]
  },
  {
   "cell_type": "code",
   "execution_count": null,
   "metadata": {},
   "outputs": [],
   "source": []
  }
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