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Re: Issue understanding the use of Cashflow

  • To: mathgroup at smc.vnet.net
  • Subject: [mg127055] Re: Issue understanding the use of Cashflow
  • From: Stuart Nettleton <Stuart.Nettleton at uts.edu.au>
  • Date: Wed, 27 Jun 2012 04:10:07 -0400 (EDT)
  • Delivered-to: l-mathgroup@mail-archive0.wolfram.com
  • References: <201206260846.EAA06860@smc.vnet.net>

Hi, you might have missed the cashflow at time zero 0. These two  
formulations give the same answer of 246,938:

npv1=TimeValue[Annuity[1342.05, 360 - 10], 0.05/12]

npv2=TimeValue[Cashflow[Join[{0}, Table[1342.05, {i, 360 - 10}]]], 0.05/12]

Also, you can check this with -NPV as the time zero element:

npv3=TimeValue[Cashflow[Join[{-npv1}, Table[1342.05, {i, 360 - 10}]]],  
0.05/12]

and you have Chop[npv3] == 0

For and amortization schedule, look at the help page for TimeValue, which  
provides a clear example:
"Since a loan's balance at any time is equal to the present value of its  
remaining future payments, Annuity can be used to create an amortization  
table"

Cheers, Stuart

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