Example: Net Present Value of an Investment

A lady wins a $10 million lottery. The money is to be paid out at the end of each year in $500,000 payments for 20 years. The current treasury bill rate of 6% is used as the discount rate. Here, the net present value of her prize is computed. 

import com.imsl.finance.*;
import java.text.NumberFormat;

public class npvEx1 {

    public static void main(String args[]) {
        double rate = 0.06;
        double[] value = new double[20];

        for (int i = 0; i < 20; i++) {
            value[i] = 500000.;
        }
        double npv = Finance.npv(rate, value);

        System.out.println("The net present value of the $10 million "
                + "prize is " + NumberFormat.getCurrencyInstance().format(npv));
    }
}

Output

The net present value of the $10 million prize is $5,734,960.61
Link to Java source.