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zero_s
2010 Aug 20
1
Shifting of Principal amount while calculating Present Value
...= 7/(1+3.60/100) + 7/(1+4.17/100)^2 + 107/(1+4.73/100)^3 which is equal to 106.3549
Similarly when used the respective rates, PV(A) = 106.2122, PV(A) = 105.7969 and PV(BBB) = 104.8871
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## My problem
I have tried the following R code.
zero_rate =
read.csv('zero_rate_table.csv')
zero_rate1 = zero_rate[, -1]
cash_flow = c(7, 7, 107)
t = c(1,2,3)
PV_table = cash_flow / (1+zero_rate1/100)^t
## Then using rowSums, I should get the required result. However, I am getting following output as
> PV_table
year_1 ...