|TVM calculations (again)|
Message #1 Posted by Thomas Radtke on 30 Aug 2003, 6:17 a.m.
a few weeks ago I complained about some miscalculations concerning TVM and a HP-18c et al. The method usually used to calculate the FV for payments that occur at a different period than the interest compoundings is to convert the interest prior to the TVM calculation. Thats not ok if payments are made more often than interest compoundings. I found by iterating over payments and a subsequent iteration over compoundings that
if payments are made at the beginning of the payment period and
if payments are made at the end of the payment period.
(q=(1+p%),j=interest compounding periods,n=payment periods per comp.period)
Note that the payment convention is strictly german i.e., the PV and PMT are signed (the germans are thinking in 'savings accounts' instead of loans;).
Well, I thought I had something to publish here as noone I asked could tell me anything else than to use the faulty method described first. Too bad, I recently found an older source which mentions equations similar to mine:(. Anyway, I did the same for the case where payments occur less often than interest compoundings and found for begin and end of period payments
(n=payment periods,j=comp.periods per payment period)
respectivly. This is--probably by accident>:)--exactly what ICONV+TVM gives (You have to check this by hand as Maple refuses to validate it correctly:). It's just in a more compact shape and easier to use.
Thomas (Who is still seeking for (i) a job anywhere in the western world and (ii) a cheap 28C to accompany his 18C:)