Resend: Loan payments vs financial calculator mismatch

[Fred Bone]

On 18 October 2009 at 22:14, Geert Janssens said:

> I never got an answer on the question below and I'm still having trouble
> with this. So I take the liberty to resend my original message:
> 
> Hi,
> 
> I am trying to setup a scheduled transaction for a loan.
> 
> At this moment I didn't receive the full table of payments from my bank
> yet, but the first payment has been made.
> 
> Using the financial calculator in GnuCash, I find that the numbers fit: I
> have 12 payments, for the amount that I loaned, with the interest we
> agreed, the monthly payment calculated very closely matches what the bank
> charged me.
> 
> However, if I try to set this up using the Mortgage and Loan druid, I end
> up with one payment less (11 instead of 12) and the amount per payment is
> too high.
> 
> Just for reference:
> The loan is:
> Amount: 4.000 €
> Intrest: 6.6% (or near to it, I didn't get the final number yet)
> To be paid in 12 monthly payments of 343,53 € each.
> 
> The financial calculator gets very close to this.
> 
> However the druid gives me 11 monthly payments of 345,37 € each.
> 
> Where's the difference ?

To begin with, I think you will find that it actually schedules the 12 
payments you requested. You'll note that the 11 listed in the "Review" 
window do not pay off the whole principal.

I tried it, using your figures, and accepting defaults (e.g. first 
payment tomorrow). I went to Scheduled Transaction Editor and changed the 
thing to "create automatically" and "create 365 days in advance". I then 
ran "since last run". The result was 12 (not 11) transactions, and the 
final payment overpays by 0.01.

The small excess in monthly payments is probably due to a different 
method of interest calculation and I do not have time to investigate. You 
may be able to produce the correct payment by adjusting the rate. In 
particular, I see that entering a rate of 5.6% produces a payment of 
343.53.