Example: Net Present Value of an Investment
A lady wins a $10 million lottery. The money is to be paid out at the end of each year in $500,000 payments for 20 years. The current treasury bill rate of 6% is used as the discount rate. Here, the net present value of her prize is computed.
using System;
using Imsl.Finance;
public class npvEx1
{
public static void Main(String[] args)
{
double rate = 0.06;
double[] value_Renamed = new double[20];
for (int i = 0; i < 20; i++)
value_Renamed[i] = 500000.0;
double npv = Finance.Npv(rate, value_Renamed);
Console.Out.WriteLine("The net present value of the $10 " +
"million prize is " + npv.ToString("C"));
}
}
Output
The net present value of the $10 million prize is $5,734,960.61
Link to C# source.