calculator.ipynb

{
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  {
   "cell_type": "code",
   "execution_count": 62,
   "metadata": {},
   "outputs": [],
   "source": [
    "import numpy_financial as npf"
   ]
  },
  {
   "attachments": {},
   "cell_type": "markdown",
   "metadata": {},
   "source": [
    "<font size=\"4\">Future Value Calculation (Retirement Calculation)</font>"
   ]
  },
  {
   "cell_type": "code",
   "execution_count": 63,
   "metadata": {},
   "outputs": [],
   "source": [
    "# npf.fv(rate, nper, pmt, pv[, when])\n",
    "# rate: interest rate per period\n",
    "# nper: number of compounding periods\n",
    "# pmt: payment per period\n",
    "# pv: present value\n",
    "# when: when payments are paid (begin/end of period)"
   ]
  },
  {
   "cell_type": "code",
   "execution_count": 64,
   "metadata": {},
   "outputs": [],
   "source": [
    "annual_return = 0.07\n",
    "monthly_contr = 1600\n",
    "num_comp_years = 25\n",
    "\n",
    "# Example: 401K plan: 7% annual return, 25 years, $1600 monthly contribution"
   ]
  },
  {
   "cell_type": "code",
   "execution_count": 65,
   "metadata": {},
   "outputs": [
    {
     "name": "stdout",
     "output_type": "stream",
     "text": [
      "Compounding period: 25 years\n",
      "Monthly contribution: $1600\n",
      "You would have contributed a total of: $480000.00\n",
      "Assuming average annual return of 7.00%\n",
      "At the end of the period, you will have: $1296114.71\n"
     ]
    }
   ],
   "source": [
    "final_balance = npf.fv(annual_return/12, num_comp_years*12, -monthly_contr, 0, when='end')\n",
    "total_contributions = monthly_contr * num_comp_years * 12\n",
    "\n",
    "print(f'Compounding period: {num_comp_years} years')\n",
    "print(f'Monthly contribution: ${monthly_contr}')\n",
    "print('You would have contributed a total of: ${:.2f}'.format(total_contributions))\n",
    "print('Assuming average annual return of {:.2f}%'.format(annual_return*100))\n",
    "print('At the end of the period, you will have: ${:.2f}'.format(final_balance))"
   ]
  },
  {
   "attachments": {},
   "cell_type": "markdown",
   "metadata": {},
   "source": [
    "<font size=\"4\">Present value calculation (purchasing power: what is it worth in today's dollar?)</font>"
   ]
  },
  {
   "cell_type": "code",
   "execution_count": 66,
   "metadata": {},
   "outputs": [],
   "source": [
    "# pv(rate, nper, pmt[, fv, when])\n",
    "# rate: interest rate per period\n",
    "# nper: number of compounding periods\n",
    "# pmt: payment per period\n",
    "# fv: future value\n",
    "# when: when payments are paid (begin/end of period)"
   ]
  },
  {
   "cell_type": "code",
   "execution_count": 67,
   "metadata": {},
   "outputs": [],
   "source": [
    "inflation_rate = 0.038"
   ]
  },
  {
   "cell_type": "code",
   "execution_count": 68,
   "metadata": {},
   "outputs": [
    {
     "name": "stdout",
     "output_type": "stream",
     "text": [
      "Assuming average inflation rate of 3.80%\n",
      "Your retirement savings will be worth $502013.69 in today's dollars\n",
      "3% of that is $15060.41\n"
     ]
    }
   ],
   "source": [
    "present_value = -npf.pv(inflation_rate/12, num_comp_years*12, 0, final_balance, when='end')\n",
    "\n",
    "print('Assuming average inflation rate of {:.2f}%'.format(inflation_rate*100))\n",
    "print('Your retirement savings will be worth ${:.2f} in today\\'s dollars'.format(present_value))\n",
    "print('3% of that is ${:.2f}'.format(present_value*0.03))"
   ]
  },
  {
   "attachments": {},
   "cell_type": "markdown",
   "metadata": {},
   "source": [
    "<font size=\"4\">Compute the number of periodic payments (loan/financing)</font>"
   ]
  },
  {
   "cell_type": "code",
   "execution_count": 69,
   "metadata": {},
   "outputs": [],
   "source": [
    "# nper(rate, pmt, pv, fv=0, when='end')\n",
    "# rate: interest rate per period\n",
    "# pmt: payment per period\n",
    "# pv: present value\n",
    "# fv: future value\n",
    "# when: when payments are paid (begin/end of period)"
   ]
  },
  {
   "cell_type": "code",
   "execution_count": 70,
   "metadata": {},
   "outputs": [],
   "source": [
    "principal = 1000000\n",
    "monthly_payment = 7000\n",
    "interest_rate = 0.06"
   ]
  },
  {
   "cell_type": "code",
   "execution_count": 71,
   "metadata": {},
   "outputs": [
    {
     "name": "stdout",
     "output_type": "stream",
     "text": [
      "For a home loan of $1000000 at 6% interest rate\n",
      "If you pay $7000 per month\n",
      "It will take you 20.93 years to pay off your home loan\n",
      "You will have paid a total of $1758249.18\n"
     ]
    }
   ],
   "source": [
    "# Example: Home loan of $1,000,000 at 6% interest rate\n",
    "\n",
    "num_month = npf.nper(interest_rate/12, monthly_payment, -principal, 0, when='end')\n",
    "num_year = num_month / 12\n",
    "\n",
    "print(f'For a home loan of ${principal} at 6% interest rate')\n",
    "print(f'If you pay ${monthly_payment} per month')\n",
    "print('It will take you {:.2f} years to pay off your home loan'.format(num_year))\n",
    "print('You will have paid a total of ${:.2f}'.format(monthly_payment*num_month))"
   ]
  },
  {
   "attachments": {},
   "cell_type": "markdown",
   "metadata": {},
   "source": [
    "<font size=\"4\">Compute the payment against loan principal plus interest (loan/financing)</font>"
   ]
  },
  {
   "cell_type": "code",
   "execution_count": 72,
   "metadata": {},
   "outputs": [],
   "source": [
    "num_year_borrowed = 15\n",
    "principal = 500000"
   ]
  },
  {
   "cell_type": "code",
   "execution_count": 73,
   "metadata": {},
   "outputs": [
    {
     "name": "stdout",
     "output_type": "stream",
     "text": [
      "For a 15-year fixed-rate mortgage of $500000 at 6% interest rate\n",
      "You will need to pay $4219.28 per month\n",
      "You will have paid a total of $759471.15\n"
     ]
    }
   ],
   "source": [
    "# Example: How much can I borrow? Monthly payment required for a 15-year fixed-rate mortgage of $500,000 at 6% interest rate\n",
    "\n",
    "monthly = -npf.pmt(interest_rate/12, num_year_borrowed*12, principal, when='end')\n",
    "\n",
    "print(f'For a 15-year fixed-rate mortgage of ${principal} at 6% interest rate')\n",
    "print('You will need to pay ${:.2f} per month'.format(monthly))\n",
    "print('You will have paid a total of ${:.2f}'.format(monthly*num_year_borrowed*12))"
   ]
  }
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