Financial interest calculation

Sat Dec 18 14:02:04 EST 2004

Hi Terry,

After testing the Julian day calculation in U.S. Naval observatory website http://aa.usno.navy.mil/data/docs/JulianDate.html  

and comparing the results for both formula's i was surprised to get on both of them incorrect 

results for the date (24/06/2002)  .... using your formula i got "2452408.98" in Julian format

using the other formula i got "2452439.41"

regarding the fin.c code for the financial calculator i went through it several times but the 

equations  that  are not clear to me for example i have a deal that has the following parameters :

financed amount        3076.5
payment term           60 months
future value               4440

no grace period ..... does it affect the calculation if it is existed ?

using the following equations would you mind mapping those parameters to any of them 

explaining why you choose specific one that the others

 *       if PMT*FV >= 0, then PV case         what does this condition mean ?
 *       if PMT*FV <  0, then FV case            what does this condition mean ?

How the guessing part is being handled here ?
 *
 *     PV case:
 *                | n*PMT + PV + FV |
 * 16)     i[0] = | ----------------|
 *                |      n*PV       |
 *
 *              = abs[(n*PMT + PV + FV)/(n*PV)]
 *
 *     FV case:
 *         a) PV != 0
 *
 *                    |      FV - n*PMT           |
 * 17)         i[0] = |---------------------------|
 *                    | 3*[PMT*(n-1)^2 + PV - FV] |
 *
 *                  = abs[(FV-n*PMT)/(3*(PMT*(n-1)^2+PV-FV))]
 *         b) PV == 0
 *
 *                    |      FV + n*PMT           |
 * 18)         i[0] = |---------------------------|
 *                    | 3*[PMT*(n-1)^2 + PV - FV] |
 *
 *                  = abs[(FV+n*PMT)/(3*(PMT*(n-1)^2+PV-FV))]

Regards

Saher Edris

Friends <fastsnip-frnds1 at yahoo.com> wrote:
On Saturday 18 December 2004 08:52, saher edris wrote:
> I could like some clarification regarding ... how Newton's Raphson is being
> used in calculating the nominal interest rate from given parameters like
> "p.v. , payment term,f.v."
>
>
> Regards
>
> Saher Edris

Please examine the file "src/calculation/fin.c". In particular read the 
comment lines starting at line 475 and continuing to line 528. These lines 
explain the calculation of interest from the other four parameters.

I am sure that if you read the comment lines starting at line 24 and 
continuing through line 1,130, they will explain most of the questions you 
might have about the financial calculator computations. I tried to explain as 
much as possible in the comment lines about not only the code, but the logic 
behind the code and the financial calculation assumptions. Approximately half 
of the file is comments on the financial equations, how they are coded and 
their use.

Have you been able to compare your JDN modification against the USNO 
computation and/or against the other test dates I sent?

Terry

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