Example of PPMT and PMT Financial Functions in Basic (52070)

MORE INFORMATION

Code Example

' To try this example in VBDOS.EXE:
' 1. From the File menu, choose New Project.
' 2. Copy the code example to the Code window.
' 3. Press F5 to run the program.

' To run this program in the environment, you must invoke the
' environment with the /L switch to load the default Quick library:
'    VBDOS.EXE /L FINANCE.QLB         for Visual Basic 1.0 for MS-DOS
'    QBX /L FINANCER.QLB              for Basic PDS 7.0 for MS-DOS
' To run outside the QBX.EXE environment, you must link with the
' appropriate library (FINANCER.LIB, FINANCAR.LIB, FINANCEP.LIB, or
' FINANCAP.LIB).

REM $INCLUDE: 'FINANCE.BI'

DEFDBL A-Z

' Initialize variables:
CLS
houseval = 110000#     ' Purchase price of house (median for Seattle).
apprec = 1.07#         ' Assumed yearly appreciation rate of house.
sellper = 10# * 12#    ' Period (month) at which you choose to sell.
down = .1#             ' Fraction of houseval paid as down payment.
equity = down * houseval  ' Initial equity in house (10% down payment).
pv1 = (1 - down) * houseval 'Present value of loan = 90% of houseval.
rate1 = .1025# / 12 ' Loan interest rate (10.25%) divided by 12 months.
pool = 0 ' Pool of money, if any, to earn interest & subtract payments.
poolint = 1.0057# ' Monthly interest earned on pool to get 7% yearly.
pointsbuy = .02#  ' Assumed fees to buy loan, as fraction of houseval.
pointsell = .07#  ' Selling fees (points) as fraction of selling price.
per = 0#           ' Month (period) counter.
nper1 = 360#       ' # periods in loan. 30-year loan has 360 months.
ptype% = 0#        ' 0 means payment due at end of each period.
fv1 = 0#           ' Future value (the goal) of a loan is always zero.
ptot1 = 0#         ' Current total of principal paid towards loan.
in = .95#          ' 1 minus the inflation rate.
proptax = -130#    ' Property taxes per month (tax deductible).
fire = -25#        ' Fire/house insurance per month.
roommate = 400#   ' Rent income from roommate (0 if none) after taxes.
roominflate = 1.02 ' Yearly rate you increase your roommate's rent.
tax = .8#       ' 1 minus your average yearly Tax rate (as a fraction).
initial = pool + equity
PRINT "Purchase price ="; houseval;
PRINT " // Initial pool + equity = "; initial
upfront = equity + (pointsbuy * houseval)
PRINT "Up front cost (down payment + loan fees) ="; upfront

' Calculate monthly (principal+interest) payment:
payment1 = Pmt(rate1, nper1, pv1, fv1, ptype%, Status%)
IF down < .2# THEN
   minsure = .03 * payment1 ' Monthly mortgage insurance rate (3% of
ELSE               ' principal+interest payment). You usually must pay
   minsure = 0#    ' mortgage insurance if you paid < 20% down.
END IF
PRINT "monthly payment= "
PRINT payment1; "+"; fire; "+"; proptax; "+"; minsure; "= ";
PRINT payment1 + fire + proptax + minsure
PRINT "not counting tax savings ("; 1 - tax; "factor ) ";
PRINT "or roommate income ("; roommate; ")";
PRINT "**************************************************"

' Add up numbers until the period (month) where you sell (sellper):
FOR j = 1 TO sellper
   per = j
   ' Yearly rent increase:
   IF j MOD 12 = 0 THEN roommate = roominflate * roommate

   ' Calculate principal and interest amounts paid:
   principal1 = PPmt(rate1, per, nper1, pv1, fv1, ptype%, Status%)

   ptot1 = ptot1 + principal1   ' Total accumulated principal to date.
   interest1 = payment1 - principal1
   itot1 = itot1 + interest1  'Total accumulated interest paid to date.
   ' Outaftertax1 and outgo values are negative:
   outaftertax1 = ((interest1 + proptax) * tax) + principal1 + fire
                  + minsure
   pool = pool + outaftertax1 + roommate  ' (outaftertax is negative).
   ' Pool earns interest if positive (no interest charged if negative,
   ' assuming you make monthly house payments without borrowing):
   IF pool > 0 THEN pool = pool * poolint
   equity = equity + ABS(principal1) ' Monthly principal builds equity.
NEXT

' Calculate final appreciation and closing costs; and print out:
years = sellper / 12#   ' Number of years after which you sold.
aphouseval = houseval * (apprec ^ years) ' Appreciated house value.
closecost = -(pointsbuy * houseval) - (pointsell * aphouseval)
naphouseval = aphouseval - houseval  ' Net appreciation on house value.
final = pool + equity + naphouseval + closecost
in1989 = final * (in ^ years)  ' In 1989 dollars (inflation adjusted).
PRINT
PRINT "After"; years; " years, buy+sell closecost ="; closecost
PRINT "total principal paid="; ptot1 + ptot2
PRINT "total interest paid="; itot1 + itot2
PRINT "Appreciated value of house = "; aphouseval
PRINT "final pool+equity+apprec-close="; final
PRINT "or"; in1989; " in 1989 dollars with"; 1 - in; "yearly inflation"
PRINT "(which is a"; CSNG(in ^ years); " overall inflation factor)"
PRINT
PRINT "Net ave. equity increase per month="; (final - initial)
                                          / sellper
PRINT "(or with inflation="; (in1989 - initial) / sellper;
      "in 1989 dollars)"