(17BII) TVM with introductory interest rate
07-07-2015, 01:20 PM (This post was last modified: 06-15-2017 01:23 PM by Gene.)
Post: #1
 Dave Britten Senior Member Posts: 1,374 Joined: Dec 2013
(17BII) TVM with introductory interest rate
fhub provided me with the basic formula that's in use here. This equation lets you solve TVM problems with two separate interest rates: i%1 for the first n1 periods, and i%2 for the last n2 periods. This can be useful for opening a revolving balance charge account that has a promotional introductory rate, and you'd like to calculate a uniform payment amount to pay off the balance after a set number of periods. This uses SPFV and USFV extensively, since those calculate (1+i/100)^n and ((1+i/100)^n-1)/(i/100) respectively without losing accuracy for very small values of i.

Usage: Pretty much like the built-in TVM solver, except instead of I%YR and N, you've got I%1, N1, I%2, and N2. I%1 is the annual interest rate for the first N1 periods, and I%2 is the annual interest rate for the remaining N2 periods. Make sure you set the PYR variable appropriately (probably 12 or 1).

For beginning-period payments, store 1 in BEG. For ending-period, store 0.

Line breaks added for clarity.

Code:
0x(N1+I%1+N2+I%2+PYR+PV+PMT+FV+BEG) +PV*SPFV(I%1/PYR:N1)*SPFV(I%2/PYR:N2) +PMT*USFV(I%1/PYR:N1)*SPFV(I%1/PYR:BEG)*SPFV(I%2/PYR:N2) +PMT*USFV(I%2/PYR:N2)*SPFV(I%2/PYR:BEG) +FV
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