TimeValueOfMoneyCalculate the time value of money (TVM) using continuous compounding |
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Diagram
Information
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The Real output y indicates the nominal value of the input u at the end (Future Value) or the beginning (Present Value) of a horizon of length u_T using the interest rate u_r according to the formula:
The given rate is assumed to be a continuously compounding rate (aka force of interest). Using the switch isCCR automatic conversion of a discrete rate can be activated.
Notes
- There is no accumulation, so the input is simply transformed at any moment given rate and time horizon values.
See also
Parameters (5)
| rate |
Value: Type: Rate (1/s) Description: Constant compounding rate |
|---|---|
| T |
Value: Type: Time (s) Description: Constant time horizon (T >0 → FV, T < 0 → PV) |
| hasConstantRate |
Value: false Type: Boolean Description: = true, if the discount rate is given by the constant parameter |
| hasConstantHorizon |
Value: false Type: Boolean Description: = true, if the time horizon is given by a constant parameter |
| isCCR |
Value: true Type: Boolean Description: = true, the rate does not need conversion to a continuously compounding rate |
Connectors (4)
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y |
Type: RealOutput Description: Information output signal |
|---|---|---|
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u |
Type: RealInput Description: Current value input |
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u_T |
Type: RealInput Description: Time horizon(T >0 → FV, T < 0 → PV) |
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u_r |
Type: RealInput Description: Interest rate |
Components (7)
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rate_x_T |
Type: Product_2 Description: Inputs are multiplied |
|---|---|---|
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timeValueFactor |
Type: Exp Description: Natural exponential function |
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timeValue |
Type: Product_2 Description: Time value of money |
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parConstantRate |
Type: ConstantConverterRate Description: Constant rate for compounding |
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CCR |
Type: ForceOfInterest Description: Continuously compounding rate |
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unchangedRate |
Type: PassThrough Description: Output is identical to input |
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parT |
Type: ConstantConverterTime Description: Constant time into the future (time horizon) |
Used in Components (1)
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BusinessSimulation.MoleculesOfStructure.InformationProcessing Trend-based forecast for an exponentially growing quantity |