added floating discount rate support #8834
Conversation
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@cclauss i'd really appreciate some feedback |
| 2. An array of cash flows, with the index of the cash flow being the associated year | ||
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| Note: This algorithm assumes that cash flows are paid at the end of the specified year | ||
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| def present_value(discount_rate: float, cash_flows: list[float]) -> float: | ||
| def present_value(discount_rates: list[tuple], cash_flows: list[float]) -> float: | ||
| """ | ||
| >>> present_value(0.13, [10, 20.70, -293, 297]) |
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I am confused as to why line 21 delivers 4.69 in the old code and 4.15 in the new.
Will it do the same if 0.13 is changed to [0.13] on line 21?
I would like us to keep the old tests (with modifications if required) to prove that the old and new are equivelent.
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I am confused as to why line 21 delivers
4.69in the old code and4.15in the new.
The formula produces4.15, i have no idea why it was4.69in the first place. You can cross check with the formula found here. Another test came up with wrong results, fixed it as well. -
Will it do the same if
0.13is changed to[0.13]on line 21?
no it will produce an error. The idea is if there is a fixed rate, the user need only provide a float number of the rate, and if its a floating rate, the user provides a list of tuples.There is no instance where a variable of type[float]is provided.
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@cclauss the enumerate() function starts counting from 0 where i in
cash_flow / ((1 + discount_rate) ** i) for i, cash_flow in enumerate(cash_flows) should start counting from 1, not 0, hence the computational error in the previous iteration. My implementation produces the correct result.
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What does enumerate(cash_flows, 1) do?
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Should
def present_value(discount_rates: list[tuple] be changed to
def present_value(discount_rates: float | list[tuple]?
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Should
def present_value(discount_rates: list[tuple]be changed todef present_value(discount_rates: float | list[tuple]?
Yes that's better, changing it rn
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What does
enumerate(cash_flows, 1)do?
It fixes the problem but i think that's beside the point. The test cases in place had different results than my tests because the previous implementation calculated wrong results. My implementation provides the correct results which is why there were differences between the tests.
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@cclauss do i resolve the conversation or do i leave this up to reviewers? I'd appreciate a review at this time
Co-authored-by: Christian Clauss <cclauss@me.com>
The existing algorithm provided the ability to calculate the present value of a series of cash flows with a fixed discount rate, i enhanced it so it works with a floating discount rate.
The basic functionallity has not been altered, the algorithm can be used as it was before without any problems.
Added doctests for new cases i introduced, also added new Errors and edge case tests.