[Edu-sig] re: financial calculation

[Arthur]

>Though maybe my calculations need to be checked, in Python.
which I attempt, as follows:
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from __future__ import division

import datetime
import math

def future_value(iday,cday,ivalue,cvalue,years):
   days_invested=(cday-iday).days
   year_periods=365/days_invested
   annualized_rate = math.log(cvalue/ivalue)*year_periods
   #future_value at the end of given years 
   return ivalue*math.pow(math.e,annualized_rate*years)


#date we purchased stock
iday=datetime.date(2004,12,27)

#date of valuation
cday=datetime.date(2005,2,11)

#price at purchase
ivalue=64.5

#current price
cvalue=81

#let's keep this up for ten years  - sure....
print future_value(iday,cday,ivalue,cvalue,10)
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which returns
4561078546.84

well over $4 bliion
4,561,078,546.84

This is still not seeming intuitively correct.  Which might be a problem of my intuition, or my calculation. 
Really not sure.

A very serious - (or just serious,compared to my silliness) - quantitative financial analysis tool available to the
Python programmer/student of quantitative finance is the Python bindings to the C++ Quantlib library.

http://www.quantlib.org/

Unfortuantely while it provides automatically generated API documentation, I haven't found anything that could be 
called a user manual.

Art


 



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