PV of a cash-flow ladder

easyFinanceacceptance —~10 min

Implement present_value(cashflows, rate, terminal) — the present value of a ladder of cash flows paid at the end of periods 1..n at a flat per-period rate, plus a terminal amount paid together with the last flow.

Every dividend model, bond and annuity is this loop. Return the value rounded to 4 decimal places.

example 1

input

cashflows=[100.0, 100.0, 100.0], rate=0.05, terminal=0.0

output

272.3248

example 2

input

cashflows=[5.0, 5.0, 5.0, 5.0, 5.0], rate=0.04, terminal=100.0

output

104.4518

constraints

1 ≤ n ≤ 600
0 ≤ rate ≤ 0.5
terminal ≥ 0

teacher · 2 hints · the first is free

●solution.py· utf-8 · spaces:4

def present_value(cashflows: list, rate: float, terminal: float) -> float:
    """PV of flows at t = 1..n plus a terminal amount at t = n. 4 dp."""
    pv = 0.0
    for t, cf in enumerate(cashflows, start=1):
        pv += cf / (1 + rate) ** t
    # TODO: the terminal amount is paid with the last flow and is not discounted in yet
    return round(pv, 4)

ln 1, col 1tab indent · esc leave editor

python 3.13 · pyodide

+ 6 hidden on submit

input · keyword arguments to present_value()

cashflows=[100.0, 100.0, 100.0], rate=0.05, terminal=0.0

expected

272.3248

the judge calls present_value() with exactly these inputs · outputs are compared to 6 decimal places

● standing bypython 3.13 in your browser · pyodide 0.28.3 · judged on the server to 6 dp⌘↵ run · ⌘⇧↵ submit

paper only · educational · not advice