251 words — categories: calculus
from math import e def pv(p, k, t): k = k / 100 return p * e**(-k*t) def fv(p, k, t): k = k / 100 return p * e**(k*t) def apv(r, k, t): k = k / 100 return (r / k) * (1 - e**(-k*t)) def afv(r, k, t): k = k / 100 return (r / k) * (e**(k*t) - 1)
Present Value of a Trust
In 18 years, Maggie Oaks is to receive $200,000 under the terms of a trust established by her grandparents. Assuming an interest rate of 5.8%, comopounded continuously, what is the present value of Maggie’s legacy?
pv(200000, 5.8, 18)
At age 35, Rochelle earns her MBA and accepts a position as vice president of a company. Assume she will retire at the age of 65, having received an annual salary of $95,000 and the that interest rate is 6% compounded continuously.
- What is the present valye of her position?
- What is the accumulated future value of her position?
years = 65 - 35 apv(95000, 6, years)
afv(95000, 6, years)
Lauren Johnson signs a 10-yr contract as a loan office for a bank, at a salary of $84,000 per year. After 7 yr, the bank offers her early retirement. What is the least amount the bank should offer Lauren, given that the going interest rate is 7.4%, compounded continuously?
total_comp = afv(84000, 7.4, 10) earned_comp = afv(84000, 7.4, 7) total_comp - earned_comp