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Created Investment_rules automation scripts #397

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28 changes: 28 additions & 0 deletions INVESTMENT_RULES/README.md
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# List of python scripts that auomates calculation of really handful of Investment Rules.

## 1. What Is the Rule of 72?
The Rule of 72 is a simple way to determine how long an investment will take to double given a fixed annual rate of interest. Dividing 72 by the annual rate of return gives investors a rough estimate of how many years it will take for the initial investment to duplicate itself.

### Key takeaways
The Rule of 72 is not precise, but is a quick way to get a useful ballpark figure.
For investments without a fixed rate of return, you can instead divide 72 by the number of years you hope it will take to double your money. This will give you an estimate of the annual rate of return you’ll need to achieve that goal.
The calculation is most accurate for rates of return of about 5% to 10%.
For more precise outcomes, divide 69.3 by the rate of return. While not as easy to do in one’s head, it is more accurate.

### How the Rule of 72 Works
For example, the Rule of 72 states that $1 invested at an annual fixed interest rate of 10% would take 7.2 years ((72 ÷ 10) = 7.2) to grow to $2.

For more details refer https://www.investopedia.com/ask/answers/what-is-the-rule-72/

## 2. Real Rate of Return adjusted to Inflation
You know that investments have to do more than keep pace with inflation for you to build wealth. As Golden says,
“A dollar today is not worth a dollar in the future.” But how do you determine what your investment return is after inflation?
This equation helps you compute your real return, or your return adjusted for inflation.

For example, if an investment returns 8 percent, and inflation is 3 percent, this is how you’d set up the problem:
[ ( 1.08 ÷ 1.03 ) - 1 ] x 100 = 4.85 percent real return

“You’re losing to inflation every year,” says Charles Sachs, a wealth manager at Kaufman Rossin Wealth in Miami.
“Long term, inflation runs about 3 percent. So your money buys half as much in 20 years.”

Learn more here--> https://finance.yahoo.com/news/6-investment-formulas-financial-success-172744221.html
18 changes: 18 additions & 0 deletions INVESTMENT_RULES/inflation_adjusted_return.py
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Inflation_Adjsted_Return_Summary = """
Learn More about this investment rule in README.md located in INVESTMENT_RULES folder**
"""

print(Inflation_Adjsted_Return_Summary)

# Get the Avg Investment Rate of Return and Avg Inflation Rate
invest_rate_return = float(input("What is expected average Rate of Return (don't use % sign): "))/100
avg_inflration_rate = float(input("What is your avg inflation rate?: "))/100


def inflation_adjusted_return(invest_rate_return, avg_inflration_rate):
# Simple formula is : ((1 + Investment return percentage) / (1 + Inflation rate percentage) - 1) x 100
inflration_adjusted_return_val = (((1 +invest_rate_return )/(1 +avg_inflration_rate)) - 1) * 100
return inflration_adjusted_return_val

real_return = round(inflation_adjusted_return(invest_rate_return, avg_inflration_rate),2)
print(f"Your Actual Rate of Return adjusted to the inflation is {real_return}%. Not {invest_rate_return*100}% ")
11 changes: 11 additions & 0 deletions INVESTMENT_RULES/rule_of_72.py
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# Get Aannual fixed interest rate
fixed_interest_rate = input("Please enter the Annual Fixed interest rate (don't use % sign): ")


def calculate_time_taken_to_double(fixed_interest_rate):
# A simple formula calulate the time it takes to double an investment.
time_taken = 72/float(fixed_interest_rate)
return time_taken

time_taken_to_double = round(calculate_time_taken_to_double(fixed_interest_rate),2)
print(f"Your investment will take {time_taken_to_double} year(s) to double!")