If your loan fees are expressed as a fixed amount you may be able to
represent the total PV of the loan as loan amount + fees, and then solve
for the monthly payment amount using the annuity formula:
PV = C(1/r  1/(r(1+r)^t))
=> C = PV/(1/r  1/(r(1+r)^t))
Then you can build a payment schedule and calculate the APR of the
entire loan plus fees by calculating the IRR of the cash flows. Do you
actually need commonsmath to do this? Could you do it in Excel instead,
using the IRR() or PMT() functions? That would probably be easier.
Rory
David Hoffer wrote:
> Luc,
>
> It's not clear to me that I could. See another email I just sent for the
> approximate formula.
>
> I think NewtonRaphson or Bisection can be used to solve the nonlinear part
> but I don't know how.
>
> Dave
>
> Original Message
> From: Luc Maisonobe [mailto:Luc.Maisonobe@free.fr]
> Sent: Saturday, August 16, 2008 3:45 PM
> To: Commons Users List
> Subject: Re: commonsmath usage to calculate APR?
>
> David Hoffer a écrit :
>
>> My usage is for USA only at this point.
>>
>> I have inputs of loanAmount, monthlyInterestRate, numberMonths, loanFees;
>>
> so
>
>> this would be for fixed monthly payments.
>>
>
> You can try this (considering monthlyInterestRate is a number between
> 0.0 and 1.0, i.e. percent values have already been divided by 100.0, and
> considering the loanFees are fixed monthly fees):
>
> public double getMonthlyPayment(final double loanAmount,
> final double monthlyInterestRate,
> final int numberMonths,
> final double loanFees) {
> final double f = Math.pow(1 + monthlyInterestRate, numberMonths);
> return loanFees + monthlyInterestRate * f * loanAmount / (f  1);
> }
>
> Could you compute the APR from this monthly payment ?
>
> Luc
>
>
>> I understand that commonsmath doesn't have specific finance methods
>>
> however
>
>> I think the APR formula is a nonlinear equation that I was hoping
>> commonsmath could help solve.
>>
>> Dave
>>
>> Original Message
>> From: Luc Maisonobe [mailto:Luc.Maisonobe@free.fr]
>> Sent: Saturday, August 16, 2008 2:45 PM
>> To: Commons Users List
>> Subject: Re: commonsmath usage to calculate APR?
>>
>> David Hoffer a écrit :
>>
>>> Can anyone point me to an example of how to use commonsmath to calculate
>>> APR (Annual Percentage Rate)?
>>>
>> There are no specific finance related algorithm in commonsmath.
>>
>>
>>> I think this is solvable using either the NewtonSolver or BisectionSolver
>>> but I am not sure how to accomplish this. Perhaps a different way is
>>> better.
>>>
>> I think so, but it depends on what you really need. APR computation
>> seems to be slightly different depending on local regulations (for
>> example USA or EU). It also depends on the assumptions you do and the
>> input data. For example you can compute it one way for fixed monthly
>> payments and another way for varying monthly payments.
>>
>>
>>> Any help would be greatly appreciated.
>>>
>> Could you explain your needs more precisely ?
>>
>> Luc
>>
>>
>>> Thanks.
>>>
>>>
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