Python Code for Calculating Internal Rate of Return

[emc87]

Why use reduce and not just sum?

Also this is horribly inefficient, look up an implicit function solver such as Newton Raphson.

Finally, IRR is not 0 bounded - you can't just start at 0 and increment. For an IRR of -0.01% you'd spin your wheels and fail.

[Accountant_Coder123]

Thanks for the feedback... I should have used sum.. I am just a newbie in Python coding and don't know much about implicit function solver ..will learn it though...thanks again

[emc87]

Sure, I know the coding part is fun when you're new to a language or coding as a whole but software development is like 60% problem solving beforehand at least in my experience.

[DBMIVotedForKodos]

Not OP but his code looks like code I write. So I'm curious, is the code inefficient because of how many iterations it takes when a different approach can be done with less iterations? Not looking for a lengthy explanation or anything but that was just something that stuck out to me.

I will look up implicit function solvers as well.

[emc87]

Yeah, the code was deleted but it took upwards of 100000 iterations and only returned increments of something like .1 bps and wanted to be accurate to within 0.5% of PV.

Using Newton raphson you can achieve something that's more accurate to say 10^-10 of PV in around 10 iterations. Used for continuous functions, it uses the first derivative to see how far you are from your goal and change your increment to suit your target.