From: eric engle (engleerica_at_yahoo.com)
Date: Thu Sep 26 2002 - 10:48:31 PDT
There is a program in newton formulas called net
present value.
Conceptually I understand the idea. If I have a stream
of future income, it has a discounted value if I were
to have that same income stream as a lump sum -
conceptually it is "just" the time value of money.
Since I work as a teacher in accident law net present
value is actually a problem which comes up frequently
- a person is injured and must be compensated for
their future lost wages. So they will receive a lump
sum to represent their lost future income - which must
be discounted however for the interest which would
have accrued to the money over time.
Problem is, I cannot figure out how to get the formula
to work on the newton!
Ok, it indicates, interst rate over 12 periods, so I
presume that means a monthly rather than an annual
rate of interest - which the newton calculates for me.
So annual interest is entered...
Ok, the payments are over a 12 month period, so I
presume the payments are also monthly? Ok, again,
annual entered, newton will calculate the months...
So lets presume 12% interest automatically divided by
the newton into 1% monthly interest, over 10 years,
automatically multiplied by the newton to 120 months
and monthly income of 1000.
We now have three remaining fields - the mystery zone
- present value
Which is what I am wanting to calculate! At least so I
think - o.k. let's leave that blank.
This leaves two fields:
Future Value
and
Payment
O.k. now this _could mean what the person will recieve
as a lump sum compensation. Or it could mean what they
would recieve monthly as income during the time! So I
am confused here...
And future value?
So these last three fields are confusing me! And
worse, I thoroughly understand the concept! And the
kick in the snout - the machine will return negative
values!
Well I am stumped! Any help would be greatly appreciated!
=====
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http://www.lexnet.bravepages.com/ind.htm (law)
http://www.geocities.com/newtontechspecs (Newton)
Help! I need to buy a copy of code warrior pro version 4 (i.e. with pascal) for x86 work (nowhere on ebay germany)
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