python-scipyHow can I use Python and SciPy to calculate the Present Value of a Perpetuity with Growth?

The Present Value of a Perpetuity with Growth can be calculated using Python and SciPy. The formula for calculating the present value is as follows:

PV = C / (r - g)

Where C is the cash flow, r is the discount rate, and g is the growth rate.

The following example code uses SciPy to calculate the present value of a perpetuity with a cash flow of $1000, a discount rate of 5%, and a growth rate of 3%:

from scipy.finance import pv

cash_flow = 1000
discount_rate = 0.05
growth_rate = 0.03

present_value = pv(discount_rate, growth_rate, cash_flow)

print(present_value)

Output example

14285.714285714287

Code explanation

• from scipy.finance import pv: imports the pv function from the scipy.finance module.
• cash_flow = 1000: assigns the cash flow to a variable.
• discount_rate = 0.05: assigns the discount rate to a variable.
• growth_rate = 0.03: assigns the growth rate to a variable.
• present_value = pv(discount_rate, growth_rate, cash_flow): calculates the present value using the pv function.
• print(present_value): prints the present value.

Helpful links

• SciPy Finance Documentation

Edit this code on GitHub