# [Numpy-discussion] Definitions of pv, fv, nper, pmt, and rate

David Goldsmith d_l_goldsmith at yahoo.com
Tue Jun 9 12:58:05 EDT 2009

```--- On Tue, 6/9/09, Skipper Seabold <jsseabold at gmail.com> wrote:

> These are the two most basic building blocks of time value
> problems,
> discounting one cash flow and an annuity.  There are
> *plenty* of
> examples and use cases for uneven cash flows or for
> providing a given
> pv or fv.  Without even getting into actual financial
> contracts,
> suppose I have an investment account that already has
> \$10,000 and I
> plan to add \$500 every month and earn 4%.  Then we
> would need
> something like fv to tell me how much this will be worth
> after 180
> months.  I don't necessarily need a reference to tell
> me this would be
> useful to know.

Use case examples aren't the problem; worked out examples combining these two principles aren't the problem; usefulness isn't the problem; the problem is one of meeting a particular reference standard.

> I don't know that these are "formulas" per se, rather than

Except that we do provide a "formula" in our help doc; perhaps the "solution" is to get rid of that and include an explanation of how our function combines the two basic formulae (for which I do have a hard-copy reference: Gitman, L. J., 2003.  "Principals of Managerial Finance (Brief), 3rd Ed."  Pearson Education) to handle the more general case.

> FV (even if one of these last two values is zero).  If
> you need a
> textbook reference, as I said before you could literally
> pick up any
> corporate finance text and derive these functions from the
> basics.

I don't question that, what I question is the appropriateness of such derivation in numpy's help doc; as I see it, one of the purposes of providing references in our situation is precisely to avoid having to include derivations in our help doc.

But it's all moot, as Robert has furnished me with a reference specifically for the "formula" we do have, and, although it's an electronic reference, it seems "stable" enough to warrant an exception to the "references should be hard-copy AMAP" policy.

DG

```