[GNC-dev] Interest

[Frank H. Ellenberger]

Hi.

as ISTR questions about this theme have been on the user list before and
it seems not to be trivial, I would like to ask:

David, can you condense your findings into a separate wiki page "Zero
Interest Loans" or similar?

All others can then contribute there and we can share the link, where
desired.

TIA
Frank

Am 14.12.18 um 12:55 schrieb Hamidreza Jafari:
> On پنجشنبه ۱۳ دسامبر ۲۰۱۸ ۷:۵۲:۱۱ (+0330) David Cousens wrote:
>> Hamid,
>>
>> What would you envisage a loan calculator for a zero interest loan
>> providing? How would you envisage such a calculator dealing with the five
>> loan types often encountered in Islamic finance e.g. Murabaha
>> Mudarabah
>> Ijara
>> Musharaka
>> Wakala.
>> As far as I can see these are all dealt with by (Principal + profit)/No of
>> repayments. Any further complexities are likely to be contractual in basis
>> rather than in the accounting.
>>
>> If you can describe what you would like to have GnuCash do, in dealing with
>> such loans, then we are better able to assess how to meet your needs.
>>
>> You are right in that it is also highly likely that the original developer
>> did not envisage dealing with a zero interest loan for some obvious
>> reasons. The formulae commonly used to calculate the payment for an
>> interest bearing loan is proportional to the interest rate and the present
>> value of the loan, see https://en.wikipedia.org/wiki/Mortgage_calculator,
>> which would result in a zero value payment for a zero value interest rate
>> which is more than likely why a zero interest rate has been excluded in the
>> existing assistant code.
>>
>> As other have pointed out and the above article in Wikipedia describes, the
>> payment in the case of zero interest becomes simply the principal of the
>> loan divided by the number of payments to be made. This is not a complex
>> calculation as in the case of an interest bearing loan, which is why a
>> calculated payment schedule is not really required.
>>
>> GnuCash is developed almost entirely by volunteers and there are only a
>> relatively small number of people with a comprehensive knowledge of the
>> code able to add new features, so incorporating new features requires a
>> developer with:
>>
>> 1 the time to tackle the problem (bugs which prevent GnuCash from working
>> correctly are a higher priority than new features;
>> 2 the expertise to tackle it;
>> 3 usually a specific interest in the area of the problem.;
>> 4 the problem having a priority with the user base (i.e. the number of users
>> requesting a solution).
>>
>> As a result new features can sometimes take some time to be developed and
>> incorporated into the GnuCash.
>>
>> The way to get new features incorporated is to go to
>> https://bugs.gnucash.org and enter a description of the problem you would
>> like to have addressed describing it as completely as possible. That will
>> at least get your problem into the queue and development cycle, where it
>> can at least compete with existing bugs/feature requests for priority.
>>
>> In the mean time, the suggestions people have made are to help you achieve a
>> way of using GnuCash to achieve your ends using the existing features of
>> GnuCash, until such time as GnuCash can be improved. That is a prime
>> function of the forum.
>>
>> It may be that a simple change in the code to allow a zero interest rate in
>> the current loan assistant is all that is required. Even small changes take
>> some time however as the GnuCash code is complex and changes introduced in
>> one area can result in unexpected results and problems in other areas of
>> the code.
>>
>>
>> David Cousens
>>
>> On Thu, 2018-12-13 at 05:09 +0330, Hamidreza Jafari wrote:
>>> On چهارشنبه ۱۲ دسامبر ۲۰۱۸ ۱۷:۳۱:۲۱ (+0330) Christopher Lam wrote:
>>> Many on the list are mentioning that the scenario is possible but simply
>>> not provisioned in the part that does it automatically which here it is
>>> the calculator. The stress so far evident in discussions causes one to
>>> question if this was even originally intended, that is manual operation.
>>> If so that has to change. I am not currently in need of such feature but
>>> a high view will require that work that can be automated, should be
>>> automated.
>>>
>>> About improving GnuCash, I would rather finish the translation sooner but
>>> redesign and extension is possible when practical usage gets momentum.
>>>
>>> Hamid
>>>
>>>> Hi
>>>> I am not an original developer on this loan assistant.
>>>> However I think that the original loan druid was designed to
>>>> calculate/estimate the loan repayment amounts, assuming a conventional
>>>> loan, with a non-zero interest rate.
>>>> If the interest rate was zero, there would be little need for a loan
>>>> druid.
>>>> e.g. original loan = $1,000 and 20 repayments of $50 each... A simple
>>>> calculator would do the trick.
>>>> I do not think there has ever been a policy against having a zero-rated
>>>> loan... but I think that the loan module has not been properly tested
>>>> with
>>>> such figures. So, I am not entirely sure that a "simple refactoring" is
>>>> a
>>>> good description of the process; it would require a complete review of
>>>> the
>>>> loan assistant, and more testing of code to handle zero-interest loans,
>>>> to
>>>> ensure crashes such as division-by-zero do not occur.
>>>> There is very little time developer CPU cycles available for such work;
>>>> if
>>>> you are able to assist in reviewing code, enabling and testing, you are
>>>> very welcome on board.
>>>> So I think, at least, the "Loan Repayment Calculator" message "The
>>>> interest
>>>> rate cannot be zero" should really be "The loan calculator does not
>>>> handle
>>>> zero interest rates."
>>>>
>>>> On Tue, 11 Dec 2018 at 20:05, Hamidreza Jafari <hamidrjafari at gmail.com>
>>>>
>>>> wrote:
>>>>> Hello,
>>>>>
>>>>> I use GnuCash mostly for personal finance and use its basic features,
>>>>> that's
>>>>> why I have not tried it completely with all its capabilities. When I
>>>>> decided
>>>>> to translate I had no idea I would encounter parts of it designed in
>>>>> specific
>>>>> doctrines. This is one such string that paused my for a while:
>>>>>
>>>>> Enter the annual interest rate in percent. Accepts values from 0.001 -
>>>>> 100.
>>>>> The Mortgage Assistant does not support zero-interest loans.
>>>>>
>>>>> Although it is possible to set up zero interest business using extra
>>>>> effort it
>>>>> is better that the tool can be used at a policy level. Historical
>>>>> views on
>>>>> the
>>>>> subject are clear. It is true that Islam (which was referred to as
>>>>> Sharia)
>>>>> takes sides about it, it is not the only one contending. There are
>>>>> some
>>>>> issues
>>>>> in life that are not a matter of voting simply because of limited
>>>>> capacity
>>>>> of
>>>>> everyday person.
>>>>>
>>>>> It is not clear to me if there are some other parts in GnuCash that
>>>>> have
>>>>> been
>>>>> designed in similar ideas. I would like it to be accepting of the
>>>>> moral
>>>>> side
>>>>> by allowing interest-free transactions (I currently suffice to this
>>>>> level
>>>>> of
>>>>> goodness advocacy). I hope it is designed and implemented in such a
>>>>> way
>>>>> that
>>>>> extension is possible if not a simple refactoring can do the job.
>>>>>
>>>>> What's the situation?
>>>>>
>>>>> Hamid
>>>>>
>>>>>
>>>>> _______________________________________________
>>>>> gnucash-devel mailing list
>>>>> gnucash-devel at gnucash.org
>>>>> https://lists.gnucash.org/mailman/listinfo/gnucash-devel
>>>
>>> _______________________________________________
>>> gnucash-devel mailing list
>>> gnucash-devel at gnucash.org
>>> https://lists.gnucash.org/mailman/listinfo/gnucash-devel
> 
> The discussion inevitably would continue to the essence of life since a 
> business say a company exists because it can provide more or at least ample 
> resources than it consumes. It is better to keep it on track and not bring in 
> many other issues that are vital but require time and effort to discuss more 
> than is reasonable in an email reply.
> 
> Hamid
> 
> 
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