Can you help me with some very simple calculations?
I'm going through your comments in src/calculations/fin.c and distilling what you wrote into the docs.
I would like to calculate, by hand, a few things. For example, what is the effective interest rate for a 4% loan compounded monthly with monthly payments?
So, I should use eq 19: ieff = (1 + i/CF)^(CF/PF) - 1
which gives: ieff = (1 + 4/12)^(12/12) - 1 = 1/3
Right?
But, that means that in this case 12*ieff = i. I would have thought there would be a slight difference between (ieff*12) and i, due to the addition of monthly compounding.
In the limiting case of continuous compounding, we use eq 20:
ieff = exp(i/PF) - 1 = exp (4/12) - 1 = 0.3956
...and thus get that 12*ieff = 4.747 (a number larger than 4, as it should be).
Obviously I'm thinking about this wrong. Help!
Thanks, Jon
-- -**-*-*---*-*---*-*---*-----*-*-----*---*-*---*-----*-----*-*-----*--- Jon Lapham <[EMAIL PROTECTED]> Rio de Janeiro, Brasil Work: Extracta Moléculas Naturais SA http://www.extracta.com.br/ Web: http://www.jandr.org/ ***-*--*----*-------*------------*--------------------*---------------
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