FINANCE

A library for financial modelling in Ruby.

INSTALL

$ sudo gem install financial_calculator

IMPORTANT CHANGES

This project started as a fork of the finance gem. The fork occured at version 2.0 of the finance library, and the first version of this gem is version 2.1. Version 2.1 is designed to be a drop in replacement for the finance gem, having only updated tests and documentation. However, starting with version 3.0, several significant changes have been made to the strucuture of the library as well as the underlying calculations.

Since there are many additional calculations that can be included in this gem, I am working on developing a roadmap of which ones I will be adding and in what order. However, I am always willing to accept well tested pull requests for new features.

OVERVIEW

GETTING STARTED

>> require 'financial_calculator'

Note: The entire library is contained under the FinancialCalculator namespace. Existing code will not work unless you add:

>> include FinancialCalculator

for all of the examples below, we'll assume that you have done this.

AMORTIZATION

You are interested in borrowing $250,000 under a 30 year, fixed-rate loan with a 4.25% APR.

>> rate = Rate.new(0.0425, :apr, :duration => (30 * 12))
>> amortization = Amortization.new(250000, rate)

Find the standard monthly payment:

>> amortization.payment
=> DecNum('-1229.91')

Find the total cost of the loan:

>> amortization.payments.sum
=> DecNum('-442766.55')

How much will you pay in interest?

>> amortization.interest.sum
=> DecNum('192766.55')

How much interest in the first six months?

>> amortization.interest[0,6].sum
=> DecNum('5294.62')

If your loan has an adjustable rate, no problem. You can pass an arbitrary number of rates, and they will be used in the amortization. For example, we can look at an amortization of $250000, where the APR starts at 4.25%, and increases by 1% every five years.

>> values = %w{ 0.0425 0.0525 0.0625 0.0725 0.0825 0.0925 }
>> rates = values.collect { |value| Rate.new( value, :apr, :duration => (5  * 12) }
>> arm = Amortization.new(250000, *rates)

Since we are looking at an ARM, there is no longer a single "payment" value.

>> arm.payment
=> nil

But we can look at the different payments over time.

>> arm.payments.uniq
=> [DecNum('-1229.85'), DecNum('-1360.41'), DecNum('-1475.65'), DecNum('-1571.07'), ... snipped ... ]

The other methods previously discussed can be accessed in the same way:

>> arm.interest.sum
=> DecNum('287515.45')
>> arm.payments.sum
=> DecNum('-537515.45')

Last, but not least, you may pass a block when creating an Amortization which returns a modified monthly payment. For example, to increase your payment by $150, do:

>> rate = Rate.new(0.0425, :apr, :duration => (30 * 12))
>> extra_payments = 250000.amortize(rate){ |period| period.payment - 150 }

Disregarding the block, we have used the same parameters as the first example. Notice the difference in the results:

>> amortization.payments.sum
=> DecNum('-442745.98')
>> extra_payments.payments.sum
=> DecNum('-400566.24')
>> amortization.interest.sum
=> DecNum('192745.98')
>> extra_payments.interest.sum
=> DecNum('150566.24')

You can also increase your payment to a specific amount:

>> extra_payments_2 = 250000.amortize(rate){ -1500 }

SUPPORTED STANDARD CALCUALTIONS

PV
NPV
XNPV
IRR
XIRR

FEATURES

Currently implemented features include:

Uses the flt library to ensure precision decimal arithmetic in all calculations.
Fixed-rate mortgage amortization (30/360).
Interest rates
Various cash flow computations, such as NPV and IRR.
Adjustable rate mortgage amortization.
Payment modifications (i.e., how does paying an additional $75 per month affect the amortization?)

RESOURCES

COPYRIGHT

This library is released under the terms of the LGPL license.

This program is free software: you can redistribute it and/or modify it under the terms of the GNU Lesser General Public License as published by the Free Software Foundation, either version 3 of the License, or (at your option) any later version.

This program is distributed in the hope that it will be useful, but WITHOUT ANY WARRANTY; without even the implied warranty of MERCHANTABILITY or FITNESS FOR A PARTICULAR PURPOSE. See the GNU Lesser General Public License for more details.

You should have received a copy of the GNU Lesser General Public License along with this program. If not, see http://www.gnu.org/licenses/.