Automatic loan payment calculation.

Doug Laidlaw laidlaws@murraytel.com.au
Wed, 7 Nov 2001 10:56:24 +1100


Yes, Quicken's Help file says that there is a slight difference between the 
two, but oesn't say exactly what it is.  That is why Quicken's Reconcile 
window includes an Adjustment feature that creates a balancing adjustment.  
In my experience also, the difference has been only a few cents.

Doug.

On Wed,  7 Nov 2001 09:15, you wrote:
> >>>>>> "Paul" == Paul Lussier <pll@mclinux.com> writes:
> >
> >    Paul> Now, one thing you could do is write a script to
> >    Paul> autmagically generate this stuff (the formulae are pretty
> >    Paul> standard and well known) and spew the data either in xml
> >    Paul> format or qif format and periodically import the data into
> >    Paul> gnucash.
> >
> >>> On 6 Nov 2001, Roland Roberts, identified below as "roland", spake
> >>> forth:
>
>   roland> And since the stupid equation is so well-known, why does
>   roland> my payment schedule in Quicken never match the one my bank
>   roland> gives me?
>
>   roland> No, I'm not being sarcastic, I really would like to know if
>   roland> Quicken is as stupid as I think it is or if there are some
>   roland> extra rules the bank uses that I Quicken doesn't know about.
>
> Well, it's not really that Quicken is being stupid or rules the bank
> uses that Quicken doesn't know about.
>
> Someone please correct me if I'm wrong here, as IANAA, and my
> understanding for things financial and mathematical is limited :)
>
> I'd gladly place the intest calucation formula here, however I don't
> know it off the top of my head, and I'm to lazy to go find it :)
>
> However, there are essentially 2 ways to compute interest.  There's
> the simple interest calculation and the more complicated interest
> calculation.
>
> The simple method says, starting with $x, at %y per year, at the end
> of the year you have $x + ($x * %y).
>
> The complicated method says that $x at %y per year is %z per some
> smaller period of time (i.e. daily).  Therefore, you must compute
> this amount each day and add it up to figure out what you'll have at
> the end of the year.
>
> Banks typically use the simple method when they owe you money and the
> complex method when you owe them.  The reason, money!  The complex
> method is more accurate, and means you'll owe them a few cents more.
> A few cents here and there among all of it's customers adds up.  It
> also means they owe you less when it comes time you pay you interest
> on your bank accounts.
>
> The reason Quicken's calculations differ is probably because the bank's
> formula is slightly more accurate than the one Quicken uses, which is
> probably relatively simple.
>
> It's been quite some time since I used Quicken, but IIRC, the
> diffence was only a few cents, it wasn't a major difference.
>
> Hope that helps somewhat.