(11C) Loan Repayments

[Dieter]

(11-13-2018 01:37 PM)Gamo Wrote:  Formula Used:

image: "n = log 1 + i · [1 / (1 – PV · i / PMT)]"

No, that's not the formula. The "1+i" part must be a subscript after the log, indicating that the base 1+i logarithm of the bracketed term is calculated.

But the program uses a correct formula. I'd write it this way:
\[\begin{align}
n~&=~-log_{~1+i}~(1-\frac{i \cdot PV}{PMT}) \\
\\
&=~ -\frac{ln(1-\frac{i \cdot PV}{PMT})}{ln(1+~i)}
\end{align}\]

This is what the program correctly implements. Assuming that the user enters the monthly payment and the annual interest rate.

Dieter