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  3. Introduction to Financial Concepts in Python

Exercise

Rising housing prices

Home values have been rising steadily each year, and this is a rather large investment for you.

Calculate your home equity value over time given a steady growth rate of 0.25% per month. A repeated array of this growth rate (with a length equal to the number of mortgage payment periods) is already stored for you in an object called growth_array.

The home_value and cumulative_percent_owned variables from the previous exercise are available.

Instructions

100 XP
  • Calculate the cumulative growth over time using np.cumprod() and growth_array.
  • Forecast the home value over time using cumulative growth array and the initial home_value .
  • Forecast the portion of home equity value owned over time given the home_value_forecast and cumulative_percent_owned.
  • Run the provided code to see a plot of Home Value vs. Home Equity over time.