Hum, simple I'm sure but perhaps calculating APR is not quite that simple; you have to factor in loan expenses (that's why APR is not the same as interest rate).
I think it is something like: P' = (P+E)I(1+i)^n/(1+i)^n Then you solve for APR with the non-linear function which is something like: ((a(1+a)^n)-(P'/P))/((1+a)^n-1) = 0 Where a=ARR/12 Calculating P' is straightforward. Solving for a is where I'm not clear, plus I'm not certain of the math above. -Dave -----Original Message----- From: Bear Giles [mailto:[EMAIL PROTECTED] Sent: Saturday, August 16, 2008 3:40 PM To: Commons Users List Subject: Re: commons-math usage to calculate APR? There are closed-form expressions for that, although I don't have them off the top of my head. Something like m = P / (1 - i)^n or maybe m = P / ((1 + i)^n - 1) where m is monthly payment, P is principal, i is monthly interest, n is number of months. It's definitely not very complex for a simple fixed-term, fixed-rate loan. Bear David Hoffer wrote: > 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. > > I understand that commons-math doesn't have specific finance methods however > I think the APR formula is a non-linear equation that I was hoping > commons-math could help solve. > > -Dave > > -----Original Message----- > From: Luc Maisonobe [mailto:[EMAIL PROTECTED] > Sent: Saturday, August 16, 2008 2:45 PM > To: Commons Users List > Subject: Re: commons-math usage to calculate APR? > > David Hoffer a écrit : > >> Can anyone point me to an example of how to use commons-math to calculate >> APR (Annual Percentage Rate)? >> > > There are no specific finance related algorithm in commons-math. > > >> 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 > --------------------------------------------------------------------- To unsubscribe, e-mail: [EMAIL PROTECTED] For additional commands, e-mail: [EMAIL PROTECTED] --------------------------------------------------------------------- To unsubscribe, e-mail: [EMAIL PROTECTED] For additional commands, e-mail: [EMAIL PROTECTED]
