*! version 1 feb2013
help fvvar

Title

fvvar -- Returns the future value of a series of payments (cash flows)

Syntax

fvvar
varname1 varname2
[, options ]

Options
due(#) When payments are due or made: 0 = end of period (default), or 1 = beginning of period

generate(string) Set the new variable's name.

Description

fvvar Returns the future value of a series of payments (based on a compounded interest rate).
The cash flows must occur at regular intervals and match the corresponding periodic capitalization rate.
fvvar generates a new variable containing the entire schedule of capitalized cash flows.

Options

due(#) When payments are due or made: 0 = end of period (default), or 1 = beginning of period.

generate(string) Set the middle part of new variable's name, default is c.
The new varname is composed as follows: varname1 + _c + value of due option.

Definitions

fvvar uses the following conventions:

¤ Periodic cash flows must be placed in varname1.

¤ Periodic capitalization rate must be placed in varname2. Enter as a decimal fraction (so should be greater than 0 and smaller than 1).

Input Arguments

The first entry in each varname should be the initial period's value.

Example

Find the (end of period) future value of the following yearly cash flows.

. list year cash_flow cap_rate if year<=5, sep(0) noobs

+
+
| year cash_flow cap_rate |
+
+
| 1 $ 10,000 0.15 |
| 2 $ 20,000 0.10 |
| 3 $ 30,000 0.12 |
| 4 $ 40,000 0.14 |
| 5 $ 50,000 0.15 |
+
+

. fvvar cash_flow cap_rate
Future value = 177342.06
Note: New variable's name is cash_flow_c0

Examples

. fvvar var1 var2, due(1)

. fvvar var1 var2, due(1) gen(cap)

Saved results

Scalars

r(due) due value

r(FV) future value of cash flows

Author

Maximo Sangiacomo
Email: msangia@hotmail.com