The following is an example of
how to calculate the minimum payment repayment estimate, the minimum
payment total cost estimate, the estimated monthly payment for repayment
in 36 months, the total cost estimate for repayment in 36 months,
and the savings estimate for repayment in 36 months using the guidance
in Appendix M1 to this part where three annual percentage rates apply
(where one of the rates is a promotional APR), the total outstanding
balance is $1000, and the minimum payment formula is 2 percent of
the outstanding balance or $20, whichever is greater. The following
calculation is written in SAS code.
data one;
/*
Note: pmt01 = estimated monthly payment
to repay balance in 36 months
sumpmts36 = sum of payments for repayment
in 36 months
month = number of months to repay total
balance if making only minimum payments
pmt = minimum monthly payment
fc = monthly finance charge
sumpmts = sum of payments for minimum payments
*/
* inputs;
* annual percentage rates; apr1= 0.0; apr2=0.17;
apr3=0.21; * insert in ascending order;
* outstanding balances; cbal1=500; cbal2=250;
cbal3=250;
* dollar minimum payment; dmin=20;
* percent minimum payment;
pmin=0.02; * (0.02+perrate);
* promotional rate information;
* last month for promotional
rate; expm=6; * = 0 if no promotional rate;
* regular rate; rrate=.17; * = 0 if no promotional
rate;
array apr(3); array perrate(3);
days=365/12; * calculate days
in month;
* calculate estimated monthly payment to
pay off balances in 36 months, and total cost of repaying balance
in 36 months;
array xperrate(3);
do I=1 to 3;
xperrate(I)=(apr(I)/365)*days; * calculate
periodic rate;
end;
if expm gt 0 then xperrate1a=(expm/36)*xperrate1+(1-(expm
/36))*(rrate/365)*days; else xperrate1a=xperrate1;
tbal=cbal1+cbal2+cbal3;
perrate36=(cbal1*xperrate1a+ cbal2*xperrate2+cbal3*xperrate3)/(cbal1+cbal2+cbal3);
* months to repay; dmonths=36;
* initialize counters for sum
of payments for repayment in 36 months; Sumpmts36=0;
pvaf=(1-(1+perrate36)**-dmonths)/perrate36;
* calculate present value of annuity factor;
pmt01=round(tbal/pvaf,0.01); * calculate
monthly payment for designated number of months;
sumpmts36 = pmt01 * 36;
* calculate time to repay and total cost
of making minimum payments each month;
* initialize counter for months, and sum
of payments;
month=0;
sumpmts=0;
do I=1 to 3;
perrate(I)=(apr(I)/365)*days; * calculate
periodic rate;
end;
put perrate1= perrate2= perrate3=;
eins:
month=month+1; * increment month counter;
pmt=round(pmin*tbal,0.01); * calculate payment
as percentage of balance;
if month ge expm and expm ne 0 then perrate1=(rrate/365)*days;
if pmt lt dmin then pmt=dmin; * set dollar
minimum payment;
array xxxbal(3); array cbal(3);
do I=1 to 3;
xxxbal(I)=round(cbal(I)*(1+perrate(I)),0.01);
end;
fc=xxxbal1+xxxbal2+xxxbal3-tbal;
if pmt gt (tbal+fc) then do;
do I=1 to 3;
if cbal(I) gt 0 then pmt=round(cbal(I)*(1+perrate(I)),0.01);
* set final payment amount;
end;
end;
if pmt le xxxbal1 then do;
cbal1=xxxbal1-pmt;
cbal2=xxxbal2;
cbal3=xxxbal3;
end;
if pmt gt xxxbal1 and xxxbal2 gt 0 and pmt
le (xxxbal1+xxxbal2) then do;
cbal2=xxxbal2-(pmt-xxxbal1);
cbal1=0;
cbal3=xxxbal3;
end;
if pmt gt xxxbal2 and xxxbal3 gt 0 then
do;
cbal3=xxxbal3-(pmt-xxxbal1-xxxbal2);
cbal2=0;
end;
sumpmts=sumpmts+pmt; * increment sum of
payments;
tbal=cbal1+cbal2+cbal3; * calculate new
total balance;
* print month, balance, payment amount,
and finance charge;
put month= tbal= cbal1= cbal2= cbal3= pmt=
fc= ;
if tbal gt 0 then go to eins; * go to next
month if balance is greater than zero;
* initialize total cost savings;
savtot=0;
savtot= round(sumpmts,1)—round (sumpmts36,1);
* print number of months to repay debt if
minimum payments made, final balance (zero), total cost if minimum
payments made, estimated monthly payment for repayment in 36 months,
total cost for repayment in 36 months, and total savings if repaid
in 36 months;
put title=’ ’;
put title=’number of months to repay debt
if minimum payment made, final balance, total cost if minimum payments
made, estimated monthly payment for repayment in 36 months, total
cost for repayment in 36 months, and total savings if repaid in 36
months’;
put month= tbal= sumpmts= pmt01= sumpmts36=
savtot=;
put title=’ ’;
run;
