bainfund.py

# Bain Fund

# FV = projected cash flow for each year (amount you expect to receive)
# n = number of periods out the cash flow is from the present
def present_value(FV, n, discount_rate=.1):
	return FV/((1 + discount_rate)**n)

if __name__ == "__main__":
	gross_rates_of_return = [.05, .15, .25, .35, .45]
	fund_start_size = 200000000 # 200 million

	for rate in gross_rates_of_return:
		installments = [fund_start_size/4, fund_start_size/4, fund_start_size/4, fund_start_size/4]

		for year in range(1, 10):
			
			# each investment is split into 4 equal parts and done within the first 4 years
			if year <= 5:
				# installment #1
				installment_number = 0
				installments[installment_number] = installments[installment_number] + installments[installment_number]*rate
			if year > 1 and year <= 6:
				# installment #2
				installment_number = 1
				installments[installment_number] = installments[installment_number] + installments[installment_number]*rate
			if year > 2 and year <= 7:
				# installment #2
				installment_number = 2
				installments[installment_number] = installments[installment_number] + installments[installment_number]*rate
			if year > 3 and year <= 8:
				# installment #2
				installment_number = 3
				installments[installment_number] = installments[installment_number] + installments[installment_number]*rate
		
		rate_present_value = present_value(sum(installments), 10)
		print("rate return: ", rate, 
			  " present value ", rate_present_value,
			  " worth? ", rate_present_value > fund_start_size
		)