Non-annual Compounding In general, with more than one compounding period in a year, we can express the formula for present value as follows: where m = number of compounding periods per year, RsR_s = quoted annual interest rate, and N = number of years. Annualising Returns A general equation to annualise returns is given, where…
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Calculating the Money Weighted Return The money-weighted return accounts for the money invested and provides the investor with information on the actual return the investor earns on the investment. The internal rate of return is the discount rate at which the sum of present values of cash flows will equal zero. In general, the equation…
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Holding Period Return 0A holding period return, R, is the return earned from holding an asset for a single specified period of time. where the subscript indicates the time of the price or income; (t=0) is the beginning of the period; and (t=1) is the end of the period. A holding period return can be…
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An interest rate (or yield), denoted r, is a rate of return that reflects the relationship between differently dated – time – cash flows. Interest rates can be thought of in three ways: Taking the perspective of investors in analysing market-determined interest rates, we can view an interest rate r as being composed of a…
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In some python scripts, you may see a function definition and a conditional statement that looks like the example below: In this code, there is a function called main() that prints the phrase “Hello World!” when the Python interpreter executes it. There is also a conditional (or if) statement that checks the value of __name__…
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Symbol(s) Meaning Example Example Matches * Matches the preceding character, subexpression, or bracketed character, 0 or more times a*b* aaaaaaaa, aaaaabbbb, bbbbbbb + Matches the preceding character, subexpression, or bracketed character, 1 or more times a+b+ aaaaaab, aaaabbbbb, abbbbbbb [] Matches any character within the brackets (i.e., “Pick any one of these things”) [A-Z]* APPLE,…
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You want to find out which fraction of your car’s use is for commuting to work, and which is for personal use. You know the one-way distance from your home to work. For a particular period, you recorded the beginning and ending mileage on the odometer and the number of work days. Write an algorithm…
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You want to decide whether you should drive your car to work or take the train. You know the one-way distance from your home to your place of work, and the fuel efficiency of your car (in miles per gallon). You also know the one-way price of a train ticket. You assume the cost of…
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In order to estimate the cost of painting a house, a painter needs to know the surface area of the exterior. Develop an algorithm for computing that value. Your inputs are the width, length, and height of the house, the number of windows and doors, and their dimensions. (Assume the windows and doors have a…
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Write an algorithm to settle the following question: A bank account starts out with $10,000. Interest is compounded monthly at 0.5 per cent per month. Every month, $500 is withdrawn to meet college expenses. After how many years is the account depleted? State the current bank statement total is $10,000 State the monthly rate is…
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