Resend: Loan payments vs financial calculator mismatch

[Robert Heller]

At Mon, 19 Oct 2009 23:21:51 +0200 Geert Janssens <janssens-geert at telenet.be> wrote:

> 
> On Monday 19 October 2009, you wrote:
> > Geert Janssens <janssens-geert at telenet.be> writes:
> > > 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 ?
> >
> > Sounds like a fencepost error..  Not sure who's error it is.
> >
> I'm not familiar with the term "fencepost" (I'm no native English speaker). 

Fenceposts are what are used to hold up a fence.  Typically a fence is a
barrier to keep people or animals in or out of a designated space.

A "fencepost error" is a computer science term (well a geeky term) that
refers to an off-by-one error.  Imagine this problem: you need to build
a fence that is 100 meters long with fenceposts every 10 meters.  How
many fenceposts will you need?  Hint: 10 is the *wrong* answer!

> However, since the financial calculator gives me a result very close to what 
> my bank gives me, I tend to assume the financial calculator is doing things 
> properly, while the loan payment druid is having the error.
> 
> Regards,
> 
> Geert
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