Amount of Interest from an Effective Rate, a Payment Frequency and a Balance

j() calculates j, the amount of interest payable from an effective rate, a payment frequency and a balance.

j2eff_rate() calculates the effective interest rate from the amount of interest payable, a payment frequency and a balance.

Usage

j(eff_rate, pay_fq, bal = 1)

j2eff_rate(j, pay_fq, bal = 1)

Arguments

eff_rate

numeric, the effective annual rate of interest.

pay_fq,

integer, the payment frequency per year.

bal

numeric, the balance of the loan; default 1.

j

numeric, the interest payment.

Value

A numeric: j() returns the calculated interest payment; j2eff_rate() returns the effective rate of interest.

Details

Interest payable (j): —

$$j = \displaystyle \left(\left(1 + er \right)^{\frac{1}{pf}} - 1 \right).bal$$

Effective rate (er): —

$$er = \displaystyle \left(1 + \frac{j}{bal} \right)^{pf} - 1$$

where \(j\) is the interest payment, \(er\) is the effective rate, \(pf\) is the payment frequency, and \(bal\) is the balance. See amort.period() in package FinancialMath for further details.

See also

amort.period(), amort.table()

Other amort: eff_rate(), get_amortval()

Examples

j(0.05915929, 12, 4000)
#> [1] 19.20444

j2eff_rate(19.20444, 12, 4000)
#> [1] 0.05915928