Automatic loan payment calculation.

[Robert A. Uhl]

On Tue, Nov 06, 2001 at 02:47:04PM -0800, Dave Peticolas wrote:
> > 
> > Any chance that scheduled transactions will be able to handle
> > sum-of-digits depreciation?  Done right, I'd think it would, but
> > perhaps there may be a good reason to run in fear from it:-)
> 
> What is sum-of-digits depreciation?

It's from the old GnuCash docs.  Say I've a computer I bought for
$1,200 and I wish it to have a lifespan of 6 years.  I want it to
depreciate monthly, thus there are 72 months to worry about.  I add
1+2+...+71+72, which is (72*73)/2, or 2,628.  I divide the price by
this number, getting .456621.

Then, counting down in reverse order, I multiply the month number by
the depreciation.  The first month the computer loses 72 * .456621, or
$32.88.  The second it loses 71 * .456621, or $32.42.  The
second-to-last month it will lose 91c, and the last it will lose 46c.

This gives a nice, easy-to-calculate curve.

-- 
Robert Uhl <ruhl@4dv.net>

America's wildlife--kill it, eat it, wear it!