interestPayment¶

Evaluates the interest payment for an investment for a given period.

Synopsis¶

interestPayment (rate, period, nPeriods, presentValue, futureValue, when)

Required Arguments¶

float rate (Input): Interest rate.
int period (Input): Payment period.
int nPeriods (Input): Total number of periods.
float presentValue (Input): The current value of a stream of future payments, after discounting the payments using some interest rate.
float futureValue (Input): The value, at some time in the future, of a current amount and a stream of payments.
int when (Input): Time in each period when the payment is made, either AT_END_OF_PERIOD or AT_BEGINNING_OF_PERIOD. For a more detailed discussion on see the Usage Notes section of this chapter.

Return Value¶

The interest payment for an investment for a given period. If no result can be computed, NaN is returned.

Description¶

Function interestPayment computes the interest payment for an investment for a given period.

It is computed using the following:

\[\left\{ \mathit{presentValue}(1+\mathit{rate})^{\mathrm{nPeriods}-1} + \mathit{payment}(1 + \mathit{rate} * \mathit{when}) \left[\frac{(1+\mathit{rate})^{\mathrm{nPeriods}-1}}{\mathit{rate}}\right] \right\} \mathit{rate}\]

Example¶

In this example, interestPayment computes the interest payment for the second year of a 25-year $100,000 loan with an annual interest rate of 8%. The payment is made at the end of each period.

from __future__ import print_function
from numpy import *
from pyimsl.math.interestPayment import interestPayment, AT_END_OF_PERIOD

rate = 0.08
period = 2
n_periods = 25
present_value = 100000.00
future_value = 0.0

interest_payment = interestPayment(rate, period, n_periods,
                                   present_value, future_value, AT_END_OF_PERIOD)
print("The interest due the second year on the $100,000", end=' ')
print("loan is $%.2f." % (interest_payment))

Output¶

The interest due the second year on the $100,000 loan is $-7890.57.