topic Re: counting interest in SAS Enterprise Guide

counting interest

woo — Mon, 29 Sep 2014 20:27:06 GMT

Hello friends please help me to count interest rate

I have some discrepancy in counting interest rate with Bank calculator and with SAS

I am counting interest for $9000.00 @ 2.49% for 12 month.

Bank is giving me monthly payment $760.00 which would be $9120.00 at end of the 12 months (so basically i am paying 120 more than actual amount)

where as if i use below code i am getting something different...

data test;

capital=9000;

interest_rate='2.49%';

do month=1 to 12;

interest=2.49/100*capital;

output;

capital+interest;

end;

run;

/*12TH OBS WILL BE

11796.113263

2.49%

293.72322026

data test2;

capital=9000;

interest_rate='2.49%';

do month=1 to 12;

interest=capital*.12/12;

output;

capital+interest;

end;

run;

12TH OBS WILL BE

10041.01512

2.49%

100.4101512

is this happening coz of my code is adding interest every time when its counting interest for amount...? if so how can i do "capital-interest"

Re: counting interest

ballardw — Mon, 29 Sep 2014 20:39:47 GMT

Is the interest rate 2.49 per month? Or did you take an annual rate and divide by 12?

In either case you might want to look in the documentation for financial functions. Payment seems to imply that you may be paying down a loan.

Look at:

data want;

payment=mort(9000, ., .0249/12,12);

run;

proc print;run;

This seems to match the bank as a loan of 9000, with annual rate of 2.49% compounded monthly(the /12) for 12 months.

Re: counting interest

woo — Mon, 29 Sep 2014 20:49:35 GMT

Thanks a lot Ballardw for yr quick response but is there a way i can see payment per month in your case...so basically instead seeing only one obs i want to see 12 obs in your code...

Re: counting interest

ballardw — Mon, 29 Sep 2014 22:33:35 GMT

You might need to provide some details as to what you are actually trying to do. If it is a loan repayment then the results of the MORT function I posted are the likely monthly payment, the same value, for each of 12 months. So you could either put the function inside a do loop of month=1 to 12 with an output statement inside the loop or just multiply the result by 12 for a total.

There are other financial functions that you may want to investigate such as CUMIPMT, cumulative interest payment.

Re: counting interest

ChrisHemedinger — Tue, 30 Sep 2014 17:05:01 GMT

Anybody remember PROC LOAN? It's part of SAS/ETS.

SAS/ETS User's Guide Example Programs

Chris

Re: counting interest

ballardw — Tue, 30 Sep 2014 18:14:08 GMT

Not everyone has ETS though...

Re: counting interest

woo — Tue, 30 Sep 2014 20:03:22 GMT

Thanks Ballardw and Chris...i got the answer...using ETS and Mort function....