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#1
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CUMIPMT with balloon payment
Hi,
I want to use CUMPRINC and CUMIPMT in an amortization for a loan that includes a balloon payment. CUMPRINC handles this perfectly when I subtract the balloon amount (fv) from the principal (pv), like so: CUMPRINC(rate, nper, pv-fv, start_period, end_period, type) However, when I try the same thing with CUMIPMT it generates incorrect values. That is, when compared with a running total of values generated by IPMT, the CUMIPMT values are always less. For example, the following returns -100: =IPMT(0.1,1,10,1000,-100,0) However, the following returns -90: =CUMIPMT(0.1,10,900,1,1,0) Any ideas? Paul |
#3
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CUMIPMT with balloon payment
Hi Paul!
Formula given was for a single payment for a series of payments it's: =CUMIPMT(rate,nper,pv,start_period,end_period,type )-(fv*rate*(end_peri od-start_period+1)) The thing about balloon loans is that the payment comprises interest only. Accordingly the cumulative interest on the balloon element is the number of payments counted multiplied by the interest on the balloon for one period. -- Regards Norman Harker MVP (Excel) Sydney, Australia Excel and Word Function Lists (Classifications, Syntax and Arguments) available free to good homes. "Norman Harker" wrote in message ... Hi Paul! With: =IPMT(0.1,1,10,1000,-100,0) You are paying interest on 1000 in period 1 1000*.1 = 100 Sign change needed to follow sign convention used by Excel With: =CUMIPMT(0.1,10,900,1,1,0) You are only paying interest on 900 in period 1 To get the interest payments with a balloon loan using CUMIPMT use: =CUMIPMT(rate,nper,pv,start_period,end_period,type )+(fv*rate) By deducting the balloon amount from the PV you are making a conceptual error of completely ignoring the balloon. -- Regards Norman Harker MVP (Excel) Sydney, Australia Excel and Word Function Lists (Classifications, Syntax and Arguments) available free to good homes. "Paul" wrote in message om... Hi, I want to use CUMPRINC and CUMIPMT in an amortization for a loan that includes a balloon payment. CUMPRINC handles this perfectly when I subtract the balloon amount (fv) from the principal (pv), like so: CUMPRINC(rate, nper, pv-fv, start_period, end_period, type) However, when I try the same thing with CUMIPMT it generates incorrect values. That is, when compared with a running total of values generated by IPMT, the CUMIPMT values are always less. For example, the following returns -100: =IPMT(0.1,1,10,1000,-100,0) However, the following returns -90: =CUMIPMT(0.1,10,900,1,1,0) Any ideas? Paul |
#4
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CUMIPMT with balloon payment
No, the signs are correct. The IPMT formula below returns -100, as it should.
"Norman Harker" wrote in message ... Hi Paul! With: =IPMT(0.1,1,10,1000,-100,0) You are paying interest on 1000 in period 1 1000*.1 = 100 Sign change needed to follow sign convention used by Excel |
#5
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CUMIPMT with balloon payment
I appreciate your responses, but unfortunately your formulas don't
work. The values they return still do not jibe with summing the IPMT results. Paul "Norman Harker" wrote in message ... Hi Paul! Formula given was for a single payment for a series of payments it's: =CUMIPMT(rate,nper,pv,start_period,end_period,type )-(fv*rate*(end_peri od-start_period+1)) The thing about balloon loans is that the payment comprises interest only. Accordingly the cumulative interest on the balloon element is the number of payments counted multiplied by the interest on the balloon for one period. -- Regards Norman Harker MVP (Excel) Sydney, Australia Excel and Word Function Lists (Classifications, Syntax and Arguments) available free to good homes. "Norman Harker" wrote in message ... Hi Paul! --SNIP-- To get the interest payments with a balloon loan using CUMIPMT use: =CUMIPMT(rate,nper,pv,start_period,end_period,type )+(fv*rate) By deducting the balloon amount from the PV you are making a conceptual error of completely ignoring the balloon. |
#6
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CUMIPMT with balloon payment
Hi Paul!
Sorry but I say they do! Using IPMT: =IPMT(10%,1,10,100000,-50000,0) Returns: -10000 =IPMT(10%,2,10,100000,-50000,0) Returns: -9686.27302558744 =IPMT(10%,3,10,100000,-50000,0) Returns: -9341.17335373363 Sum: -29027.4463793211 My CUMIPMT approach using: =CUMIPMT(rate,nper,pv,start_period,end_period,type )-(fv*rate*end_perio d-start_period+1) =CUMIPMT(10%,10,50000,1,1,0)-(50000*10%*1-1+1) Returns: -10000 =CUMIPMT(10%,10,50000,1,2,0)-(50000*10%*2-1+1) Returns: -19686.2730255874 =CUMIPMT(10%,10,50000,1,3,0)-(50000*10%*(3-1+1)) Returns: -29027.4463793211 That checks out for a single period, for periods 1&2, and periods 1,2&3 And: =CUMIPMT(10%,10,50000,2,3,0)-(50000*10%*(3-2+1)) Returns: -19027.4463793211 Which checks out with the IPMT return for periods 2 and 3. -- Regards Norman Harker MVP (Excel) Sydney, Australia Excel and Word Function Lists (Classifications, Syntax and Arguments) available free to good homes. "Paul" wrote in message om... I appreciate your responses, but unfortunately your formulas don't work. The values they return still do not jibe with summing the IPMT results. Paul "Norman Harker" wrote in message ... Hi Paul! Formula given was for a single payment for a series of payments it's: =CUMIPMT(rate,nper,pv,start_period,end_period,type )-(fv*rate*(end_peri od-start_period+1)) The thing about balloon loans is that the payment comprises interest only. Accordingly the cumulative interest on the balloon element is the number of payments counted multiplied by the interest on the balloon for one period. -- Regards Norman Harker MVP (Excel) Sydney, Australia Excel and Word Function Lists (Classifications, Syntax and Arguments) available free to good homes. "Norman Harker" wrote in message ... Hi Paul! --SNIP-- To get the interest payments with a balloon loan using CUMIPMT use: =CUMIPMT(rate,nper,pv,start_period,end_period,type )+(fv*rate) By deducting the balloon amount from the PV you are making a conceptual error of completely ignoring the balloon. |
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