Strangeness in Mortgage/Loan Repayment Druid

[Matthew Vanecek]

On Wed, 2003-07-02 at 23:15, Perry Smith wrote:
> Yes, it is 78's not 77's.  Sorry
> 
> So, given a starting principle, interest rate, and number of payments,  
> how do you calculate the payment you need to send in each month with  
> "your" formula?
> 

The bank's formula, really, not mine.  The payments are already
calculated by the bank.  I use whatever the bank told me my monthly
payment is.  Why would you want to use anything else?  PMT() is only
useful if you don't know how much to pay (when has any bank *ever* let
that happen!!), or are trying to run scenarios on a *future* loan.  Once
you get the loan, the *bank* tells you what your payments are; not
Gnucash or any spreadsheet.  All I care is how much of a given payment
goes to interest, and how much goes to principal.  I'm also interested
in what happens when I pay extra at some point during the period.  Of
course, due to banking oddities, I'd never roll extra up into the
monthly payment--it's always a separate transfer earmarked to principal
made right after my regular loan payment.

If you want PMT() to calculate accurately, then you have to determine
how the interest is compounded.  Doing rate/12, for a monthly loan, gets
close enough--less than a penny off in my case (in OpenOffice).  Since
the main goal of Gnucash should be to determine how much of a payment is
interest and principal, and since your bank is going to tell you what
your payment is anyhow, the PMT() function is not highly useful in
Gnucash except for running scenarios, IMO.

Can you really get loans where the note holder *doesn't* tell you what
your payments are going to be, and makes *you* figure it out?

> >>> My auto loan is simple interest.  Here's how the payment breakdown
> >>> works
> >>> out.  Suppose an interest rate of 5%:
> >>>
> >>> bal = initial/running principal balance
> >>> prin = principal portion of payment
> >>> int  = interest portion of payment
> >>> days = payment date - last payment date
> >>> amt  = amount of payment
> >>>
> >>> int  = (days * (5%/365)) * bal
> >>> prin = amt - int
> >>> bal  = bal - prin
> >>>
> >>>
> >>> This formula matches my bank's numbers perfectly, so I'm pretty happy
> >>> with it.  Unfortunately, I couldn't get Gnucash to do the same thing,
> >>> so
> >>> I just transfer the numbers from the spreadsheet.  Using the
> >>> spreadsheet
> >>> also allows me to insert rows for extra payments.  I tried all the  
> >>> PMT
> >>> and INT and FPV and NPV formulas--they all seemed to be a few pennies
> >>> off at the closest.  So I just use my own.  *shrug*worksforme. YMMV,
> >>> etc., etc.
> >>>
> >>>
> >>>
> >>> --   
> >>> Matthew Vanecek
> >>> perl -e 'print
> >>> $i=pack(c5,(41*2),sqrt(7056),(unpack(c,H)-2),oct(115),10);'
> >>> ********************************************************************* 
> >>> **
> >>> *********
> >>> For 93 million miles, there is nothing between the sun and my shadow
> >>> except me.
> >>> I'm always getting in the way of something...
> >>>
> >>> _______________________________________________
> >>> gnucash-devel mailing list
> >>> gnucash-devel at lists.gnucash.org
> >>> https://lists.gnucash.org/mailman/listinfo/gnucash-devel
> >>>
> > -- 
> > Matthew Vanecek
> > perl -e 'print  
> > $i=pack(c5,(41*2),sqrt(7056),(unpack(c,H)-2),oct(115),10);'
> > *********************************************************************** 
> > *********
> > For 93 million miles, there is nothing between the sun and my shadow  
> > except me.
> > I'm always getting in the way of something...
> >
-- 
Matthew Vanecek
perl -e 'print $i=pack(c5,(41*2),sqrt(7056),(unpack(c,H)-2),oct(115),10);'
********************************************************************************
For 93 million miles, there is nothing between the sun and my shadow except me.
I'm always getting in the way of something...