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--L-+---T1----+-T--2----T----3--T-+----4T---+---T5----+-T--6----T----7--T---+R Manual (Ver 1.50) for PELTON'S FINANCIAL UTILITIES, Ver 1.50 by: PELTON COMPUTER CONSULTANTS / Stephen J. Foss P.O. Box 687 Ipswich, MA 01938 Tel: (508)356-7621, (508)356-0571 REGISTRATION FORM for Pelton's Financial Utilities: Fee = $48.00 Today's Date_________________________,19______ Name___________________________________________________________ Company________________________________________________________ Address________________________________________________________ City, State, Zip_______________________________________________ Daytime telephone__(_______)__________________ext._____________ [ ] $48.00 Check Enclosed. (Make payable to PELTON COMPUTER) Charge $48.00 to my [ ] MasterCard [ ] Visa (Must fill in below) Card #________________________________________ Expiration Date_______________________________ Signature_____________________________________ Send FREE info about: [ ] Other Pelton Computer programs available from your Shareware dealer. [ ] Pelton's Financial-Calculation Services. [ ] Pelton's Financial Utilities Problem-Example Book. [ ] Understanding Your Home Mortgage Loan Booklet. [ ] Enclosed is $19.00. Send me the Pelton's Financial Utilities Problem-Example Book. (Includes newest ed. now, one update later.) [ ] Enclosed is $5.00. Send me the "Understanding Your Home Mortgage Loan Booklet." To register, mail completed registration form and $48.00 fee to: Pelton Computer, P.O. Box 687, Ipswich, MA 01938 1.1 Registration Fee. The registration fee for this program is $48.00. The authors of Shareware programs work very hard to make excellent programs which are easy-to-use, useful, and help the computer users to be more productive. The small regi- stration fee allows us to put you on our active customer list which will result in many benefits to you. If you use this program please register as we would like to stay in touch with you. Also, we are always working on and releasing upgrades and program enhancements. Use the form above, or print it out from the Main Menu (see section 1.16 below), or run the program with the /R qualifier (GO /R, see secs. 1.6, 1.9, 1.13, 1.19). We thank you in advance. The author who conceived, designed, programmed, and perfected the computer programs of Pelton Computer Consultants is Stephen J. Foss, B.S., M.S. (Physics), M.S.E.E., M.B.A. He is a member of the Association of Shareware Professionals. 1.2 Other reasons to register. Here's what you get when you register: a. An immediate upgrade to the newest available version b. The accompanying newest manual release c. One or more free interim upgrades for major fixes if necessary (program plus manual) d. One more free upgrade (program and manual) to the next major release when its ready e. Six (6) months worth of telephone support relating to use of the program with friendly, patient guidance f. Regular notices of new programs and services g. A free subscription to our product newsletter for the life of your registration, which is one (1) year from the date of your registration h. The status of valued customer who gets automatic top priority on your calls, programming fixes and suggestions, and all customer-support issues i. Your source of knowledgeable computer-aided financial prob- lem solving. Please register if you are using the program now, have been using it, or plan to use it in the future. Thank you for your support in our programming efforts. USER FEEDBACK FORM for Pelton's Financial Utilities Likes, dislikes, features wanted, problems? List below: Likes___________________________________________________________ ________________________________________________________________ Dislikes________________________________________________________ ________________________________________________________________ Features wanted_________________________________________________ ________________________________________________________________ Problems, bugs__________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ Want something customized?______________________________________ ________________________________________________________________ ________________________________________________________________ Want us to program something special for you?________________________________________________ What?___________________________________________________________ ________________________________________________________________ Remarks_________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ Mail completed Customer Feedback Form to: Pelton Computer, P.O. Box 687, Ipswich, MA 01938 TABLE OF CONTENTS BY SECTION NUMBER 1. Introduction and Selection Guide 2. Distributions 3. Things-to-Do 4. Future Amount 5. Payments 6. G5 Loan 7. IRA Calculator 8. G7 Variable Loan 9. Finance 10. MGM Chapter 1 - Introduction and Selection Guide TABLE OF CONTENTS BY SECTION NUMBER 1.1 Welcome to the Pelton Financial Utilities. 1.2 Installing the Pelton Financial Utilities. 1.3 How to use this manual. 1.4 How to print or view this manual. 1.5 Files included with this release. 1.6 Registration procedures and fee. 1.7 Hardware requirements. 1.8 Intended audience for the Pelton's Financial Utilities. 1.9 Quick run. How to run the main program. 1.10 Using disk caching. 1.11 Setting the PATH to make Pelton's Financial Utilities universally accessible. 1.12 Planning Your Problem-Solving Strategy. 1.13 How to Run Pelton's Financial Utilities. 1.14 The Pelton Financial Utility Main Menu. 1.15 The Utilities Selection Guide. 1.16 Pelton's name, address, and telephone number, Order Form, and User Feedback Form. 1.17 Reporting a problem with the utilities. 1.18 The Eight Pelton Financial Utilities. 1.19 The PAYMENTS Utility. 1.20 The G5LOAN Utility. 1.21 The FINANCE Utility. 1.22 The IRA Utility. 1.23 The DISTRIBUTIONS Utility. 1.24 The FUTURE AMOUNT Utility. 1.25 The G7 VARI-LOAN Utility. 1.26 The MGM (MONEY GROWTH MATRIX). 1.27 Disclaimer. 1.28 Copyright infringement. 1.1 Welcome to the Pelton Financial Utilities. The Pelton Financial Utilities is a collection of computer programs driven by a fancy menu, part of which is the "Selection Guide." The utilities solve many time-value financial problems encountered in business. See sections 1.18 to 1.26, below. The Selection Guide guides the new or inexperienced Pelton user to the appropriate financial utility to make it easy to get a quick and accurate answer. See sections 1.13 and 1.15 below. 1.2 Installing the Pelton Financial Utilities. To install Pelton's Financial Utilities on your computer's hard disk, simply put disk 1 in drive A and type INSTALL. The INSTALL program walks you through the complete installation process. Refer to your Quick Installation Guide for more information about the installation. 1.3 How to use this manual. Review Chapter 1 first, then any chapter that may interest you. Each chapter discusses an individual utility, which are tied together through the Main Menu and the Selection Guide. Use the Selection Guide to help guide you through to an answer of a financial problem if you don't readily know which utility to run from the menu. Many users use the Selection Guide all the time. 1.4 How to print or view this manual. Method 1: PRINT PELTON.DOC Method 2: COPY PELTON.DOC LPT1 To view the manual on your screen just type: TYPE PELTON.DOC. If you wish to stop the screen at any time simply press the "pause" key, and then press <ENTER> to restart, or press ^S (this means hold down the <CTRL> key with one finger and press the S key) to stop the screen and ^Q to restart. To make our computing lives easier, there are some very nice screen viewing programs available from your Shareware dealer. 1.5 Files included with this release. ORDER Order Form PROBLEM Future Amount utility INSTALL EXE Installation Program GO EXE Main Menu FUTURE COM Future Amount utility DISTRIB COM Distributions utility FINANCE COM Finance utility PAYMENTS COM Payments utility G5LOAN COM G5Loan utility G5LOAN NAD part of the G5Loan utility G7 COM G7 VARI-LOAN utility G7 CHN part of the G7 VARI-LOAN utility G7 HLP G7 VARI-LOAN help file section IRA COM IRA Calc utility MGM COM MGM (Money Growth Matrix) utility AL1 MGM an MGM example file THINGS COM Things-To-Do utility THINGS TNG a sample Things-To-Do file SAMPLE TNG another sample Things-To-Do file LSTFL T9G the Things-To-Do control file 1.6 Registration procedures and fee. Please fill out the registration form (see above) or print one out from the program (can do GO /R). The registration fee is $48.00. Send in the com- pleted form with the fee. 1.7 Hardware requirements. You'll need an IBM PC, XT, AT, or compatible computer with at least one floppy disk drive (unless you plan to run from a diskless workstation) with 384K ("K" loosely stands for 1,000 or exactly 1,024 bytes) of memory, pref- erably a color monitor but mono will work fine (see "Quick run" below). The speed of your computer is not a major factor but the faster the better for you anyway. You may use a dot matrix or laser printer. 1.8 Intended audience for the Pelton's Financial Utilities. Anyone who needs financial information, reports, quantities and answers, or schedules or documentation about the time-value of money. 1.9 Quick run. How to run the main program. At the DOS prompt type: GO. This automatically runs the program in either color mode or mono mode (black & white), according to the equipment you have hooked up. The program actually checks your computer's configuration and sets the color accordingly. Sometimes, as in the case of a laptop computer, the screen is actually mono, but the video board is CGA (Color Graphics Adapter). In this case, the program senses a color configuration and the mono screen washes out some colors. Therefore, if you have a mono monitor being driven from a color card, you can force the program to display in black & white by typing: GO /B. Similarly, you may force the program into color with: GO /C. To print out a registration form do: GO /R. 1.10 Using disk caching. At Pelton Computer, we have been using disk-caching software for many years. Disk-caching software is available from your Shareware dealer. This caching software allows the computer to load a program from memory more than fifty times faster than from disk. The caching scheme tells the operating system to look in cache memory before it looks at the disk for a program or data, assuming, theoretically, that you will use 20% of your programs 80% of the time. Pelton's Financial Utilities is a good candidate for disk caching as it would appear to load almost instantaneously. 1.11 Setting the PATH to make Pelton's Financial Utilities universally accessible. DOS has this amazing command called PATH, which has been well thought out and is a critically important to a DOS computer user. Suppose you have hard disks C and D and have 50 or more directories set up on each one. Every time you wanted to use a utility like DISTRIB how would you access it? Well, you could copy DISTRIB.COM to each directory every time you need it. Or, you could copy it once to a special directory, say PELTON just for an example, and put PELTON in DOS's PATH statement. Your PATH statement could look like this: PATH=C:\;C:\system;C:\PELTON;D:\tools; In this PATH statement we have the root directory of C (C:\), a SYSTEM dir- ectory which probably contains the DOS files, our PELTON directory, and a TOOLS directory. Notice the semicolons (;). Remember that we copied DISTRIB.COM into the PELTON directory. Now, every time we wish to use DISTRIB it's made available by the PATH command of DOS (even though we copied it to the hard disk only one time). The PATH statement can be typed at the DOS prompt in real time, or it can be put into the boot file, AUTOEXEC.BAT. NOTE: you could put C:\PELTON in your path and then run the utilities (GO) from any other directory, however, unless you are in the same directory as the utilities (i.e. \PELTON) the data files (and name and address files) would not be found. 1.12 Planning Your Problem-Solving Strategy. The first step in strategy planning is to define your goal - define your target. What are you looking for? Is it an "ending balance," a "payment amount," an "interest rate," or a "starting amount" (sometimes called a "beginning amount" or "lump sum.")? The second step is to write down the information you are given to work with and make sure it is complete. For a simple example, suppose your goal is to find the monthly payment of a mortgage loan. You are given the amount financed (usually called the "principal"), the annual interest rate, and the term. In this case your information is complete. If it weren't, Pelton's Financial Utilities would inform you so. Once you have gathered all your information, the utilities will ask you the correct questions in an appropriate order. For more complex problems, which are solved in parts, break the problem into parts and ascertain what information you need for each part. In this type of problem, the solution of one part is the required information for the next part. The more organized you are, the easier complex financial prob- lems will be to solve. 1.13 How to Run Pelton's Financial Utilities. To run the Pelton Financial Utilities computer program simply type GO if you have a color monitor, or GO /BW if you have a monochrome monitor (amber, green, black-and-white). The main utilities menu, which we will mention often, will appear quickly. Then, from this menu, you can make your choice of which utility to run. We built in a powerful advanced feature called the Selection Guide to make it very easy to use the financial utilities. This Selection Guide actually guides you to the correct utility by asking a few simple questions about the type of problem you wish to solve. More on the Selection Guide below. To print out a registration form do: GO /R. Don't be hesitant, or don't ponder too much over getting your feet wet with the utilities. One always gets a nice feeling after "buying into" an application program if the program works well and the user really gets the job done. With Pelton's Financial Utilities you will get the answer. Besides, you'll wind up with a good sense of satisfaction after getting results - a feeling that you've accomplished something. 1.14 The Pelton Financial Utility Main Menu. The utilities Main Menu is shown below in Fig. 1-1. All the individual financial utilities can be run from this single well-organized and easy-to- use menu. [ Productivity Programs ] 1. Selection Guide 2. Distributions 3. Things-to-Do 4. Future Amount 5. Payments 6. G5 Loan 7. IRA Calculator 8. G7 Variable Loan 9. Finance 0. MGM p. Info on Pelton e. Exit Program Figure 1-1 To run a utility you simply move the "light bar" up and down via the arrow (cursor) keys until your choice is reverse-highlighted, then press <ENTER>. Or touch a key from 1 to 9, 0, p, or e. Pressing <ESCAPE> or "e" will bring you back to DOS or your system-level menu, if you have one, or your presen- tation manager, if that's what you're using. 1.15 The Utilities Selection Guide. As previously mentioned, we have added a powerful tool to the main util- ities menu. This tool is the Selection Guide. If you are not totally familiar with each financial utility, use the Selection Guide to select the appropriate utility and starting place. The Selection Guide makes it as easy and as straightforward as possible for you to get your solution. After you have chosen the Selection Guide from the main utilities menu, you will see the top level of the Selection Guide (Fig. 1-2). [ Selection Guide Top Level ] 1. Calc a Loan Payment, etc. 2. Work with Loans 3. Money Growth 4. Money Disbursement 5. Exit back to Main Menu Figure 1-2 The top level of the guide presents you with five choices: calculate a loan payment (or a rate, term, or principal provided three of the four are quantities are known), calculate and print a loan schedule (standard, installment, bimonthly, biweekly), calculate all money growth quantities with schedules, and calculate all money disbursement quantities with schedules. Entry number 1 threads into the Loan Calculator whereas entries 2-4 call upon other guides (menus). Entry 5 immediately brings you back to the utilities Main Menu. [ Loan Selection Guide ] 1. Mortgage Loans, Installment Loans, etc. 2. Complex Loans, comparison of loans, etc. 3. Exit back to Main Selection Guide Figure 1-3 Figure 1-3 shows the Loan Selection menu which appeared on the screen when you choose "Work with Loans" from the top level. Here, entry 1 calls upon G5LOAN, and entry 2 calls upon G7 VARI-LOAN. See the table of contents to locate examples of these powerful financial utilities. [ Growth Selection Guide ] 1. Figure out a Deposit amount only. 2. Calc quantities for Interest only. 3. Calc quantities for Deposits & Int. 4. Calculate an IRA's Ending Balance. 5. Exit back to Selection Guide. Figure 1-4 Figure 1-4 shows the Growth Selector which appears when "Money Growth" is chosen from the top level. Entry 1 of the Growth Selector calls up the FUTURE AMOUNT utility, entries 2 and 3 thread into the appropriate level of the FINANCE utility, and entry 4 brings up the IRA utility. [ Disbursement Selection Guide ] 1. Figure out a Withdrawal amount only. 2. Calc quantities when Withdrawals + Int. 3. Exit back to Selection Guide. Figure 1-5 Figure 1-5 shows the Disbursement Selector which appears when "Money Disbursement" is chosen from the top level. Entry 1 of the Disbursement Guide calls up the DISTRIBUTIONS utility, and entry 2 threads into the appropriate level of the FINANCE utility. If you know basically what kind of financial problem you have to solve, the Selection Guide will help lead you there in the quickest way, even if you have never used Pelton's Financial Utilities before. 1.16 Pelton's name, address, and telephone number, Order Form, and User Feedback Form. You'll notice an entry on the Main Menu marked "p" for "Info on Pelton." If you move the slide bar down to this level and press <ENTER> or "p", you will be prompted to press "I" or "F", Information or a User Feedback Form, res- pectively. Use the User Feedback Form to report any problems, bugs, new ideas, enhancements, likes or dislikes. If you choose "I", Pelton's name, address, and telephone number will appear immediately in a box on the center of the screen. The menu program will also ask you if you wish to print this information on your printer. You may answer yes (Y), no (N), or exit (E). If you choose to print, an Order Form will be printed. Pressing the <ESCAPE> key always exits or backs you out of the present context throughout the utilities. If you choose "F" a User Feed- back Form will be printed. Interactively, you may type GO /R to get a print- out of the registration form. 1.17 Reporting a problem with the utilities. Computer programs are always being enhanced with features, or expanded in some way. Even though extensive care to detail and extensive testing have taken place during the development of software, before it gets to the user, occasionally a "bug" will surface. As you attempt to use the program, therefore, perhaps something doesn't quite work correctly, or quite work the way you expect. If a "bug" should appear, please file a User Feedback Form so that the programmer will be aware of it and can fix it for you and for others. We conscientiously strive to make our computer programs the best possible for our user community. To report a problem just write down your name, address, and phone number (in case we want to contact you about the problem), which program you have trouble with, and a description of the problem. Remember, the better your description, the quicker we can locate and fix the problem. 1.18 The Eight Pelton Financial Utilities. These are the eight utilities listed on the utilities Main Menu: PAYMENTS, G5LOAN, FINANCE, IRA, DISTRIBUTIONS, FUTURE AMOUNT, G7 VARI-LOAN, and MGM. 1.19 The PAYMENTS Utility. This utility is used to print out range-and-spreads to the screen or to your printer. You are asked for a starting interest rate which forms a spread in increments of 0.5 across the top, and you are asked for a starting value of another quantity which is spread in appropriate increments down the left- hand column. In between is a checkerboard of values around which your eye may peruse so that you may hone in on a value close to what is desired. Then you will have defined a starting point since you'll know the rate from the top row and the value from the left-hand column. 1.20 The G5LOAN Utility. The G5LOAN utility creates documentation for standard mortgage loans, installment loans with rebates calculated according to the Rule-of-78's, bimonthly loans, biweekly loans, loans with different compounding periods, or conventional loans where the payment varies according to the remaining amount financed plus a fixed sum. You may modify the payment amount, or state a balloon payment number. G5LOAN also comes with a loan calculator with which you may figure out a payment, rate, term, or amount financed, given three out of four. It also displays the add-on interest for an installment loan. G5LOAN is very practical, professional, straightforward, and easy-to-use. 1.21 The FINANCE Utility. This utility is broken into two major sections: money growth, and money disbursement. Money growth, in itself, consists of two parts: growth of a sum by interest alone, and growth of a sum by interest and deposits. Money disbursement is the depletion by withdrawal of an interest-bearing sum over time. FINANCE will figure out any quantity - principal, rate, term, deposit or withdrawal, starting sum or ending balance, as long as five of these six quantities are known. As you can see, FINANCE is a very powerful program and can greatly assist you in financial planning. 1.22 The IRA Utility. This one is a special utility because it can calculate an ending balance of a complex IRA, which is an interest-bearing savings account into which an initial deposit, a recurring monthly deposit, and a recurring yearly deposit are made. The initial, monthly, or yearly deposit may be zero (but not all three, of course) as long as the date of the first deposit ever made has been signified. A summary sheet, a yearly summary, or a complete schedule may be printed after calculation. 1.23 The DISTRIBUTIONS Utility. This utility is actually a subset of the all-inclusive FINANCE utility. Given a starting balance, interest rate, term, and an ending balance which must be less than the starting balance, the DISTRIBUTIONS utility will immediately calculate the withdrawal amount for you. This withdrawal amount is the amount of money that you may withdraw from your interest-bearing starting sum to reach the ending balance over the term. 1.24 The FUTURE AMOUNT Utility. This utility is also a subset of the all-inclusive FINANCE utility. Given a starting balance, interest rate, term, and an ending balance which must be greater than the starting balance, the FUTURE AMOUNT utility will immedi- ately calculate the deposit amount for you. This deposit amount is the amount of money that you must deposit into your interest-bearing account so that your money grows to the ending balance over the term. 1.25 The G7 VARI-LOAN Utility. With this Pelton Financial Utility you can analyze one or two different complex loans in which the interest rates or payment amounts may vary from payment-to-payment. Secondly, you can quickly compare the two loans via the side-by-side analysis summary. With G7 VARI-LOAN you can change any rate or payment amount, list the first three or last three payments, or show a summary (first 3 and last 3). You can also expand or shrink (balloon) a loan, and you can save and recall your work! The "compare" feature clearly helps you to decide which loan is better for you. G7 VARI-LOAN has many other helpful features as you will see later. 1.26 The MGM (MONEY GROWTH MATRIX). Money growth calculations are easy, but MGM gives you a quick mechanism to enter some simple data and produce an answer. MGM presents you with a grid on which you enter a starting amount, a rate, a date, and a recurring or nonrecurring deposit amount. You can enter more than one line of this type of information. Then you simply press a button to get the ending balance to your money growth problem. 1.27 Disclaimer. In no event will the author be liable for any damages, including any lost profits, lost savings or other incidental or consequential loss or damages arising out of the use of- or the inability to use- this program -- even if the author has been advised of the possibility of such damages. The author makes no warranties, either express or implied, respecting the software, its quality, performance, merchantability, or fitness for any particular purpose. 1.28 Copyright infringement. This program is protected under the copyright laws of the U.S. This pro- gram is not public domain; it is released to the Shareware distribution channel as Shareware. Users and Shareware vendors may copy it freely and distribute it. This program may not be sold, nor copied and sold, for profit or under a value-added scheme (to increase the value of a computer system, etc.) or under a new name, etc., because the author reserves all copyright law rights. The author has the reasonable intent of hoping for new registrants obtained from the Shareware distribution channel, but does not want the program to be stolen by any person or company. Any person or company interested in purchasing or licensing the rights to this program should contact the author. Chapter 2 - Distributions TABLE OF CONTENTS BY SECTION NUMBER 2.1 What is the DISTRIB program, and what does it do? 2.2 Features. 2.3 The Schedule. 2.4 Exiting the program. 2.5 Entering the data (answering the queries). 2.6 Displaying a schedule. Pausing or Escaping. 2.7 Entering the actual payment and the date of the first payment. 2.8 Schedule printing. 2.1 What is the DISTRIB utility, and what does it do? Given a starting balance, interest rate, term, and an ending balance which must be smaller than the starting balance, the DISTRIB utility will immed- iately calculate the withdrawal amount for you. This withdrawal amount is the amount of money that you may take out of your interest-bearing account so that your money decreases to the ending balance over the term. Calculat- ing the withdrawal amount to reach the ending balance is not trivial be- cause not only are you concerned about the withdrawal amount itself, but you must take into consideration that the account is interest-bearing. DISTRIB is a very simple utility that can immediately solve a not-so-simple prob- lem. A perfect example of a use of DISTRIB is the distributions from a closed IRA account. An elderly man has saved $57,000 in an IRA and wishes to withdraw a certain amount per month. The interest rate is 6.25%. He plans for 15 years worth of withdrawals and wants to leave $1,500 in the account. Find the monthly withdrawal amount. Using DISTRIB the answer is $483.68. 2.2 Features. The utility offers you the following features: o Full glorious, attractive color screens, or black & white (mono) o Fancy reports to screen or printer o Different compounding frequencies o Can pause or quit during report output o Easy-to-understand queries (questions) - you don't need financial training to use this utility o User can escape or quit at any time o This utility aids you in solving serious financial-calculation problems o Fast loading o The utility is well thought out; people who use it like it o Fast execution o Continuous dedicated support by the author o Excellent documentation o This utility will increase your productivity and give you a true sense of accomplishment o Information is where you need it. 2.3 The Schedule. Below is shown the first few and last few entries of a typical schedule (using the example of section 1, above). Notice the BEGINNING BALANCE (which starts at $57,000), the ENDING BALANCE (which ends at $1,500), and PRINCIPAL WITHDRAWN (which is the withdrawal amount calculated = $483.68). Also, we added a dummy date for the first withdrawal date of 01/01/89 (it was actu- ally entered as 010189). Remember, interest is always being gained, too. ---------------------------------------------------------------------------- PMT WITHDRAWAL BEGINNING PRINCIPAL PERIODIC ENDING TOTAL # DATE BALANCE WITHDRAWN INT.GAIN BALANCE PAID OUT ---------------------------------------------------------------------------- 1 1/01/89 57,000.00 483.68 296.88 56,813.20 483.68 2 2/01/89 56,813.20 483.68 295.90 56,625.42 483.68 3 3/01/89 56,625.42 483.68 294.92 56,436.66 483.68 4 4/01/89 56,436.66 483.68 293.94 56,246.92 483.68 5 5/01/89 56,246.92 483.68 292.95 56,056.19 483.68 . . . . . . . . . . . . . . . . . . . . . 177 9/01/03 3,379.62 483.68 17.60 2,913.54 483.68 178 10/01/03 2,913.54 483.68 15.17 2,445.03 483.68 179 11/01/03 2,445.03 483.68 12.73 1,974.08 483.68 180 12/01/03 1,974.08 474.08 10.28 1,500.00 484.36 ----------------------------------------------------------------------------- end ----------------------------------------------------------------------------- WANT A PRINTOUT? (Y/N) 2.4 Exiting the utility. Pressing <ESCAPE> and sometimes E or e will either back you out of that par- ticular inquiry sequence or completely exit you from the utility, depending on the context you are within. Pressing <F10> will immediately exit you from the utility. Pressing the <F1> key will repeat the previous question. Sup- pose you made a mistake on the rate (you typed 6.6 instead of 6.2), then at the compounding frequency query just press <F1> to go back to the interest rate query and enter the correct quantity (6.2). 2.5 Entering the data (answering the queries). Below are shown the questions (queries) that you will be presented with. The figures reflect the example stated in section 1. Enter your TITLE for the report, if you desire one, otherwise just hit <ENTER> > Enter BEGINNING BALANCE (initial amount) >57000 Enter ENDING BALANCE (how much you will end up with); this amount should be less than the BEGINNING BALANCE, and, it may be zero; if zero, hit <ENTER> >1500 Enter ANNUAL INTEREST RATE >6.25 If you want Monthly distributions, as is common then just hit <ENTER>, or Quarterly hit Q, or Weekly hit W, or Daily hit D, or Yearly hit Y. For example, if you choose W for Weekly, your report will show Weekly distributions. Enter COMPOUNDING PERIOD (<ENTER>=M, Q, W, D, Y) ><ENTER> Enter TOTAL NUMBER OF YEARS >15 Enter TOTAL NUMBER OF MONTHS ><ENTER> +--------------------------------------------------+ | | | PERIODIC WITHDRAWAL AMOUNT= $483.68 | | | +--------------------------------------------------+ Want a SCHEDULE? (Y/N/E=exit/S=start over) 2.6 Displaying a Schedule. Pausing or Escaping. Next, by the magic of computer programming, your schedule will be generated on the screen. It's possible to pause the display by pressing a key like the space bar, and then press it again to continue. You can quit by pres- sing the <ESCAPE> key. See the schedule above. At the bottom of the schedule, you'll see the words, "DO YOU WANT A PRINTOUT? (Y/N)." If you respond with an N, the utility goes back to the beginning. For a Y, the utility prints a schedule. 2.7 Entering the actual payment and the date of the first payment. If you have chosen to display or print a schedule, the utility asks for the actual payment to be used and an optional first-payment date like this: Enter PAYMENT you wish (hit <ENTER> for amount above) ><ENTER> Enter date of first payment (mmddyy) >010189 The payment amount doesn't necessarily have to be the amount that the pro- gram calculated; it can be your choice. Of course, the arithmetic will work out better if you choose the default value. Also, it's always more professional to include a date if at all possible. 2.8 Schedule printing. If you elect to print a schedule the program will request the screen or printer. If you choose the printer press the <ESCAPE> key to stop the printing or the <SPACE> key to pause. --------------------------------------------------------------------------- <ESC> to cancel, <SPACE> to pause... DISTRIBUTIONS PROGRAM PRINTING... Chapter 3 - THINGS-TO-DO TABLE OF CONTENTS BY SECTION NUMBER 3.1 What is the THINGS-TO-DO program, and what does it do? 3.2 Features. 3.3 The Main Menu. 3.4 The bottom-line menu. 3.5 Add, aUtoadd, Change, Print, Find, Sort, Help, eXchange, Insert, Remove, <ESC>. 3.7 Other commands. 3.8 Exiting the program. 3.1 What is the THINGS-TO-DO program, and what does it do? THINGS-TO-DO is a program originally written for us, to help us with our development work. It became so good that we wanted to offer it to our clients and customers. You may have many lists of things to do, for ex- ample, lists of prospects, appointments, repairmen, phone numbers, action items for work projects, events leading up to a closing, lists of parts to buy for repairing your house or remodeling, grocery lists, lists of friends and their telephone numbers, party supplies, or any list limited only by your imagination. You'll need THINGS-TO-DO. The computer program, THINGS-TO-DO, manages all of your lists and is very easy to use. To run this program on your IBM PC or compatible, just type the word "THINGS" and the Main Menu immediately appears. You may choose the last-used list, a new list to be created, or an old list. Suppose you choose a new list? The program asks you for the list's name. Then you can add new items. Other features include: change a section of or a whole item, find a string in an item, sort all items, print all items, remove an item, insert an item before another, exchange the places of two items, and help. THINGS-TO-DO is a program for everybody - executives, lawyers, accountants, computer people, church people, doctors, property managers, clerks, secre- taries, homemakers - anybody who keeps an organized list - at home or at the office, or anywhere there's an IBM PC or compatible computer. One of our clients kept a list of items needed to remodel his family room. One THINGS- TO-DO user made up a list for her dinner party. We have found that secre- taries love it and use it all the time. This program comes in full color or black and white. THINGS-TO-DO is a quick and easy computer program that you may use to manage many lists of items. 3.2 Features. The program offers you the following features: o Full glorious, attractive color screens, or black & white (mono) o Change a section of or a whole item o Add up to 3000 items per list o Autoadd feature for adding many items per session o Can automatically enter last list used with one keystroke o Start new lists or use old ones o Find a string in an item o Sort all items alphabetically o Print all items on printer o Remove an item o Insert an item before another o Exchange the places of two items o Pause or quit during printing o Easy-to-understand menu on the bottom of your screen o Escape or quit at any time o This program aids you in being organized o Get help at the press of a key o Fast loading o The program is well thought out; people who use it like it o Fast execution o Continuous dedicated support by the author o Excellent documentation o This program will increase your productivity and give you a true sense of accomplishment o Information is where you need it o Keeps you organized by keeping your lists organized o It's very easy to update the computer list from a paper list o This program was designed with you in mind. 3.3 The Main Menu. THINGS-TO-DO MAIN MENU 1. USE LAST-USED LIST 2. RECALL OLD LIST 3. CREATE A NEW LIST 4. REMOVE AN EXISTING LIST 5. EXIT PROGRAM 3.4 The bottom-line menu. When you finally enter into a list from the Main Menu, your list will be displayed and the 24th-line menu will appear as shown below: A=add C=change E=exit F=find H=help I=insert F10=quit P=print R=remove S=sort U=auto-add X=xchange 3.5 Add, aUtoadd, Change, Print, Find, Sort, Help, eXchange, Insert, Remove, <ESC>. Here's what the commands mean and how they work: what how what it does and how it works ---------------------------------------------------------------------------- Add - press A - adds one new item from a request line to the list. aUtoadd - press U - adds more than one item on an ongoing basis to the present list. After adding the item you get re- turned to the request line. aUtoadd is more com- fortable to use for entering a long list of items. Press <ESC> to quit aUtoadd. Change - press C - Changes a section of an item or the whole item. You tell the program which item # and the change. Exit - press E or <ESC> - You leave the present context. Program quits from Main Menu if you press <ESC> or E. Find - press F - The program finds a string embedded in an item. It tells you the item # or #'s. Help - press H - Brings up the help menu. See section 18 below. Insert - press I - Inserts an item before another item in your list. You tell the program which item #. Print - press P - Prints your list on the printer. Remove - press R - Deletes an item. You tell it the #. Sort - press S - Sorts the whole list in alphabetical order. Be careful not to sort if you have prioritized your items (at entry time, or using Insert, or eXchange) eXchange - press X - Exchanges two items. You tell it the two item #'s. 3.6 Other commands. There are three other commands: <ENTER>, up arrow, and down arrow. When you are displaying your list on the screen you will see 17 items per screen. So if you have 59 items in your list of things-to-do, then there will be 3 screens full (17 items each) and one last screen with 5 items, for a total of 4 screens. Pressing <ENTER> moves the display to the next screen. Like- wise, the down-arrow key moves the display to the next page worth of items. The up-arrow key moves your display to the previous page. 3.7 Pressing H for help. When you press H you'll immediately get this help screen and menu. Press any letter on the left side and you'll get help for that subject. When you are finished viewing your help screen just press any key to go back to this menu. To return to your list simply press <ENTER>. H E L P M E N U A ---> Add a new item C ---> Change an item E ---> Exit the program F ---> Find something in an item H ---> Help (this segment) I ---> Insert an item before another one P ---> Print all items on your printer R ---> Remove an item S ---> Sort your list U ---> aUto-add items to your list X ---> eXchange one item for another <ENTER> ---> To go back to your list of things Choose an Item: a,c,e,f,h,i,p,r,s,u,x > 3.8 Exiting the program. Pressing <ESCAPE> and sometimes E or e will either back you out of that par- ticular inquiry sequence or completely exit you from the program, depending on the context you are within. Chapter 4 - Future Amount TABLE OF CONTENTS BY SECTION NUMBER 4.1 What is the FUTURE program, and what does it do? 4.2 Features. 4.3 The Schedule. 4.4 Exiting the program. 4.5 Entering the data (answering the queries). 4.6 Displaying a schedule. Pausing or Escaping. 4.7 Entering the actual payment and the date of the first payment. 4.8 Schedule printing. 4.1 What is the FUTURE program, and what does it do? Given a starting balance, interest rate, term, and an ending balance which must be greater than the starting balance, the FUTURE program will immed- iately calculate the deposit amount for you. This deposit amount is the amount of money that you must deposit into your interest-bearing account so that your money grows to the ending balance over the term. Calculating the deposit amount to reach a goal of savings is not obvious because not only are you concerned about the deposit amount itself, but you must take into consideration that the account is interest-bearing. FUTURE is a very sim- ple program that can immediately solve a not-so-simple problem. Suppose a lady wishes to save up to $15,000 over 4 years and 6 months. She can get an interest rate of 6.15%. She'll start with $1,000. What would her monthly deposit amount be to reach her goal? Using FUTURE the answer is $220.57. 4.2 Features. The program offers you the following features: o Full glorious, attractive color screens, or black & white (mono) o Fancy reports to screen or printer o Different compounding frequencies o Pause or quit during report output o Easy-to-understand queries (questions) - you don't need financial training to use this program o Escape or quit at any time o This program aids you in solving serious financial-calculation problems o Fast loading o The program is well thought out; people who use it like it o Fast execution o Continuous dedicated support by the author o Excellent documentation o This program will increase your productivity and give you a true sense of accomplishment o Information is where you need it. 4.3 The Schedule. Below is shown the first few and last few entries of a typical schedule (using the example of section 1, above). Notice the BEGINNING BALANCE (which starts at $1,000), ENDING BALANCE (which ends at $15,000), and PRINCIPAL ADDED (which is the deposit amount calculated = $220.57). Also, you added a dummy date for the first deposit date of 01/01/89 (it was actually entered as 010189). Remember, interest is always being gained, too. ----------------------------------------------------------------------------- PMT DEPOSIT BEGINNING PRINCIPAL PERIODIC ENDING TOTAL # DATE BALANCE ADDED INT.GAIN BALANCE PAID IN ----------------------------------------------------------------------------- 1 1/01/09 1,000.00 220.57 5.13 1,225.70 225.70 2 2/01/09 1,225.70 220.57 6.28 1,452.55 226.85 3 3/01/09 1,452.55 220.57 7.44 1,680.56 228.01 4 4/01/09 1,680.56 220.57 8.61 1,909.74 229.18 5 5/01/09 1,909.74 220.57 9.79 2,140.10 230.36 . . . . . . . . . . . . . . . . . . . . . 50 2/01/13 13,535.29 220.57 69.37 13,825.23 289.94 51 3/01/13 13,825.23 220.57 70.85 14,116.65 291.42 52 4/01/13 14,116.65 220.57 72.35 14,409.57 292.92 53 5/01/13 14,409.57 220.57 73.85 14,703.99 294.42 54 6/01/13 14,703.99 220.65 75.36 15,000.00 296.01 ----------------------------------------------------------------------------- end ----------------------------------------------------------------------------- WANT A PRINTOUT? (Y/N) 4.4 Exiting the program. Pressing <ESCAPE> and sometimes E or e will either back you out of that par- ticular inquiry sequence or completely exit you from the program, depending on the context you are within. Pressing <F10> will immediately exit you from the program. Pressing the <F1> key will repeat the previous question. Sup- pose you made a mistake on the rate (you typed 6.6 instead of 6.2), then at the compounding frequency query just press <F1> to go back to the interest rate query and enter the correct quantity (6.2). 4.5 Entering the data (answering the queries). Below are shown the questions (queries) that you will be presented with. The figures reflect the example stated in section 1. Enter your TITLE for the report, if you desire one, otherwise just hit <ENTER> > Enter BEGINNING BALANCE (initial amount, quite often zero); if the amount is zero, then just hit <ENTER> >1000 Enter ENDING BALANCE (how much you will end up with); this is the final amount, or your goal, which should be greater than the BEGINNING BALANCE >15000 Enter ANNUAL INTEREST RATE >6.15 If you want Monthly savings, as is common, then just press <ENTER>, or Quarterly hit Q, or Weekly hit W, or Daily hit D, or Yearly hit Y. For example, if you choose W for Weekly, your report will show Weekly savings (deposits). Enter COMPOUNDING PERIOD (<ENTER>=M, Q, W, D, Y) ><ENTER> Enter TOTAL NUMBER OF YEARS >4 Enter TOTAL NUMBER OF MONTHS >6 +--------------------------------------------------+ | | | PERIODIC SAVINGS AMOUNT= $220.57 | | | +--------------------------------------------------+ Want a SCHEDULE? (Y/N/E=exit/S=start over) 4.6 Displaying a Schedule. Pausing or Escaping. Next, by the magic of computer programming, your schedule will be generated on the screen. It's possible to pause the display by pressing a key like the space bar, and then press it again to continue. You can quit by pres- sing the <ESCAPE> key. See the schedule above. At the bottom of the schedule, you'll see the words, "DO YOU WANT A PRINTOUT? (Y/N)." If you respond with an N, the program goes back to the beginning. For a Y, the program prints a schedule. 4.7 Entering the actual payment and the date of the first payment. If you have chosen to display or print a schedule, the program asks for the actual payment to be used and an optional first-payment date like this: Enter PAYMENT you wish (hit <ENTER> for amount above) ><ENTER> Enter date of first payment (mmddyy) >010189 The payment amount doesn't necessarily have to be the amount that the pro- gram calculated; it can be your choice. Of course, the arithmetic will work out better if you choose the default value. Also, it's always more professional to include a date if at all possible. 4.8 Schedule printing. If you elect to print a schedule the program will request the screen or printer. If you choose the printer press the <ESCAPE> key to stop the printing or the <SPACE> key to pause. --------------------------------------------------------------------------- <ESC> to cancel, <SPACE> to pause... FUTURE AMOUNT PROGRAM PRINTING... Chapter 5 - Payments TABLE OF CONTENTS BY SECTION NUMBER 5.1 What is the PAYMENTS program, and what does it do? 5.2 Features. 5.3 The Main Menu. 5.4 The schedule. 5.5 The questions the computer will be asking you. 5.6 Exiting the program. 5.7 Entering the Principal. 5.8 Entering the Interest Rate. 5.9 Entering the Compounding Frequency. 5.10 Displaying a Schedule. 5.11 Entering the optional Job Number. 5.12 Entering the optional client's name and address. 5.13 Number of copies. 5.14 Schedule printing. 5.1 What is the PAYMENTS program, and what does it do? This utility is used to print out range-and-spreads to the screen or to your printer. You are asked for a starting interest rate which forms a spread in increments of 0.5 across the top, and you are asked for a starting value of another quantity which is spread in appropriate increments down the left- hand column. In between is a checkerboard of values around which your eye may peruse so that you may hone in on a value close to what is desired. Then you will have defined a starting point since you'll know the rate from the top row and the value from the left-hand column. There are five menu choices for ranges-and-spreads. See the Main Menu section below. You can request ranges-and-spreads for amounts financed vs. interest rates, loan payments, affordable principal amounts, growth pay- ments, and distribution amounts. Only after you use this program a few times, will you be able to see its beauty. It's like a new powerful language. Use it to find approximate or "ballpark" financing variables quickly by looking over a topology of related numbers. As an example, PAYMENTS is a simple program that anybody using or needing loan payments should find useful. Using the LOAN PAYMENTS choice from the Main Menu, the program requests the principal, interest rate, and compound- ing frequency, and prints out the periodic payment (monthly, quarterly, etc.) needed to payoff (amortize) the loan in 1 year, 2 years, 3,4,5,...up to 30 years. From this report, a borrower may find, for example, how much the monthly payment is to payoff his loan in 5, 10, 15, or 20 years. Some borrowers look at the 30-year monthly payment and the 20-year payment and find the difference they would have to pay monthly (in additional principal) in order to payoff the loan in only 20 years. This whole process can be done with the PAYMENTS program in only a few keystrokes. This is only one example. PAYMENTS can do much more! See section 5.3 below. 5.2 Features. The program offers you the following features: o Full glorious, attractive color screens, or black & white (mono) o Fancy reports to screen or printer o Different compounding frequencies o Pause or quit during report output o Easy-to-understand queries (questions) - you don't need financial training to use this program o Escape or quit at any time o Client's name and address block is saved for convenience o This program aids you in solving serious financial-calculation problems o Get help at the press of a key o Fast loading o The program is well thought out; people who use it like it o Fast execution o Continuous dedicated support by the author o Excellent documentation o This program will increase your productivity and give you a true sense of accomplishment o Information is where you need it. 5.3 The Main Menu. PAYMENTS PROGRAM SELECTION GUIDE 1 - AMOUNT FINANCED vs. INTEREST RATE You enter a starting interest rate and a starting amount financed. You'll get a payment spread. 2 - LOAN PAYMENTS--------->You enter an amount financed and an interest rate. You get the monthly payments for terms over 1-30 years. 3 - AFFORDABLE PRINCIPAL-->You enter a starting interest rate and your lowest starting payment You'll get an affordability matrix. 4 - GROWTH PAYMENTS------->Enter payment and rate for growth chart. 5 - DISBURSEMENT PAYMENTS->Enter withdrawal and rate for a chart. Enter 1 - 5, or E > 5.4 The schedule. The following schedule is your goal. How do you read it? Well, first of all, the borrower borrowed $10,000 at 10.75%. He then wanted to know how long it would take to pay off the loan for different scenarios, i.e., different amount of time (term). He told the computer program that he wanted "monthly" payments. So, looking at the schedule, for $882.65 per month, the loan will be paid off in 1 year. Notice the (M) near the upper right-hand corner of the report. This "M" stands for "monthly" payments. Similarly, if he wants to repay the loan in 5 years, then he knows right away that the monthly payment will be $216.18. 02/05/88 PAYMENTS Scope Program by PELTON, Ver. 1.3 4:29 PM --------------------------------------------------------------------------- PAYMENTS TO PAYOFF $10,000.00 AT 10.7500% FOR DIFFERENT TERMS IN YEARS (M) # YEARS PAYMENT # YEARS PAYMENT --------------------------------------------------------------------------- 1 882.65 16 109.31 2 464.92 17 106.92 3 326.21 18 104.86 4 257.25 19 103.08 5 216.18 20 101.53 6 189.07 21 100.17 7 169.92 22 98.98 8 155.74 23 97.94 9 144.88 24 97.02 10 136.34 25 96.21 11 129.48 26 95.50 12 123.88 27 94.86 13 119.25 28 94.30 14 115.37 29 93.80 15 112.10 30 93.35 -------------------------------------------------------------------------- DO YOU WANT A PRINTOUT? (Y/N) 5.5 The questions the computer will be asking you. The program will request the principal amount, rate, compounding period, deposit amount, withdrawal amount, optional payment amount, starting date, optional job number, client name, and number of copies. The program won't request all these quantities at once, rather, only certain ones depending on the menu choice and type of range-and-spread desired. 5.6 Exiting the program. Pressing <ESCAPE> and sometimes E or e will either back you out of that par- ticular inquiry sequence or completely exit you from the program, depend- ing on the context you are within. Pressing the <F1> key will repeat the previous question. Suppose you made a mistake on the principal amount (you typed 9000 instead of 90000), then at the interest rate inquiry just press <F1> to go back to the principal amount inquiry and enter the correct quantity. 5.7 Entering the Principal. Here, the program asks how much was borrowed. Enter any amount up to $99,999,999.99. Don't use commas or dollar signs. Below, the user entered $10,000.00. (Type E or <ESCAPE> to exit). Principal: Enter principal amount financed >10000 5.8 Entering the Interest Rate. Next, put in the interest rate (per year). In the example below, the user was "charged" a "yearly" percentage rate of 10.75. (Type E to exit). Interest rate: Enter yearly interest rate >10.75 5.9 Entering the Compounding Frequency. Next, decide what compounding frequency you will be working with. Some business loans are compounded quarterly. Most regular consumer loans are compounded "monthly." To use "monthly" you may just hit carriage return <ENTER> or M. (Type E or <ESC> to exit). Compounding Period: The interest rate was given as a yearly rate (APR), but the lender may calculate payments QUARTERLY which is every three months, for example. Please make the appropriate choice below. <ENTER> OR M = compounding period is MONTHLY (typical), D = DAILY, W = WEEKLY, 2 = EVERY TWO WEEKS, T = TWICE-MONTHLY, Q = QUARTERLY, S = SEMI-ANNUALLY, A = ANNUALLY Enter a letter on left (or just hit <ENTER> for MONTHLY) > 5.10 Displaying a Schedule. Next, by the magic of computer programming, your schedule will be generated on the screen. See the schedule above. At the bottom of the schedule, you'll see the words, "DO YOU WANT A PRINTOUT? (Y/N)." If you respond with an N, the program goes back to the beginning. For a Y, the program asks for a job number, client name, and number of copies. 5.11 Entering the optional Job Number. You may enter a job number, or hit <ENTER>. Below, the user put in job number 909. (Type E to exit). Job Number: Would you like to give this report a job number, 'e' to exit, or press <ENTER> for no job number >909 5.12 Entering the optional client's name and address. Next, you may enter your name and address or your friend's or client's. The computer "pulled" the name and address shown below from the disk. You are asked if you wish to keep it on put in a new name and address. The name and address are stored to help you save time and energy when processing multiple schedules for the same party. (Type E to exit). Client: Enter client name, address, etc.... press <ENTER> for no name, etc. Stephen J. Foss P.O. Box 687 Ipswich, MA 01938 If you want the same client, type 'k' or type 'n' for a new client 'K' = KEEP -or- 'N' = NEW ONE (K/N) Stephen J. Foss P.O. Box 687 Ipswich, MA 01938 5.13 Number of copies. The programs asks how many. The user said 1. (Could type E to exit). --------------------------------------------------------------------------- How Many Copies? > 5.14 Schedule printing. Finally, the schedule begins printing. Press the <ESCAPE> key to stop the printing. The bottom line tells you for whom the report is being printed, and how many copies. --------------------------------------------------------------------------- Report now printing....hit <ESC> to stop... Stephen J. Foss 1 Chapter 6 - G5LOAN TABLE OF CONTENTS BY SECTION NUMBER 6.1 What is the G5LOAN program, and what does it do? 6.2 Features. 6.3 The questions the computer will be asking you. 6.4 Exiting the program. 6.5 Entering the Principal. 6.6 Entering the Interest Rate. 6.7 Entering the Compounding Frequency. 6.8 Displaying a Schedule. 6.9 Entering the optional Job Number. 6.10 Entering the optional client's name and address. 6.11 Schedule printing. 6.1 What is the G5LOAN program, and what does it do? This loan program is not just another "run of the mill" loan scheduler. G5LOAN will print out loan schedules for your documentation, loan summary information, summary-by-years of interest and principal paid, and last pay- ment. The loan calculator will calculate the payment, principal, rate, or term, if you know three out of four of these quantities. Your G5LOAN pro- gram will also calculate the add-on interest amount for installment loans as well as show you the current rebate and the current payoff. How many times have you had to call your bank and ask for this information? Suppose you have a $3,000 loan. The interest rate is 13.5%. Compounding is monthly and the term is 42 months. The loan calculator immediately calculates the pay- ment as $90.03 per month and the add-on interest as $781.26, bringing the total payback (sometimes called the "deferred payment price") to $3,781.26. With G5LOAN you are able to calculate and document six types of loans: 1. regular direct-reduction, with level monthly payments, 2. regular direct-reduction, with twice-monthly payments, 3. regular direct-reduction, with payments every-2-weeks, 4. add-on interest installments according to the rule of 78's, 5. conventional old-fashioned - payments decrease with time, 6. direct-reduction using different compounding periods. 6.2 Features. The program offers you the following features: o Full glorious, attractive color screens, or black & white (mono) o Fancy reports to screen or printer o Different compounding frequencies o Pause or quit during report output o Easy-to-understand queries (questions) - you don't need financial training to use this program o Escape or quit at any time o Client's name and address block is saved for convenience o This program aids you in solving serious financial-calculation problems o Fast loading o The program is well thought out; people who use it like it o Fast execution o Continuous dedicated support by the author o Excellent documentation o This program will increase your productivity and give you a true sense of accomplishment o Information is where you need it. 6.3 The questions the computer will be asking you. The program will request the principal amount, rate, compounding period, optional payment amount, starting date, optional job number, and optional client name. 6.4 Exiting the program. Pressing <ESCAPE> and sometimes E or e will either back you out of that par- ticular inquiry sequence or completely exit you from the program, depend- ing on the context you are within. Pressing the <F1> key will repeat the previous question. Suppose you made a mistake on the principal amount (you typed 9000 instead of 90000), then at the interest rate inquiry just press <F1> to go back to the principal amount inquiry and enter the correct quantity. 6.5 Entering the Principal. Here, the program asks how much was borrowed. Enter any amount up to $99,999,999.99. Don't use commas or dollar signs. Below, the user entered $10,000.00. (Type E to exit). Principal: Enter principal amount financed >10000 6.6 Entering the Interest Rate. Next, put in the interest rate (per year). In the example below, the user was "charged" a "yearly" percentage rate of 10.75. (Type E to exit). Interest rate: Enter yearly interest rate >10.75 6.7 Entering the Compounding Frequency. Next, decide what compounding frequency you will be working with. Some business loans are compounded quarterly. Most regular consumer loans are compounded "monthly." To use "monthly" you may just hit carriage return <ENTER> or M. (Type E or <ESC> to exit). Compounding Period: The interest rate was given as a yearly rate (APR), but the lender may calculate payments QUARTERLY which is every three months, for example. Please make the appropriate choice below. <ENTER> OR M = compounding period is MONTHLY (typical), D = DAILY, W = WEEKLY, 2 = EVERY TWO WEEKS, T = TWICE-MONTHLY, Q = QUARTERLY, S = SEMI-ANNUALLY, A = ANNUALLY Enter a letter on left (or just hit <ENTER> for MONTHLY) > 6.8 Displaying a Schedule. After all data is entered, the program brings you to a summary screen from which each entry may be further changed by choosing the corresponding num- ber. When all data is correct you may proceed to the next menu, the output menu, from which you may display or print a schedule, last payment, summary, or yearly totals of interest and principal paid. If you selected printed output, the program will request a job number (any arbitrary number). 6.9 Entering the optional Job Number. You may enter a job number, or hit <ENTER>. Below, the user put in job number 909. (Type E to exit). Job Number: Would you like to give this report a job number, 'e' to exit, or press <ENTER> for no job number >909 6.10 Entering the optional client's name and address. Next, you may enter your name and address or your friend's or client's. The computer "pulled" the name and address shown below from the disk. You are asked if you wish to keep it on put in a new name and address. The name and address are stored to help you save time and energy when processing multiple schedules for the same party. (Type E to exit). Client: Enter client name, address, etc.... press <ENTER> for no name, etc. Pelton Computer Consultants P.O. Box 687 Ipswich, MA 01938 If you want the same client, type 'k' or type 'n' for a new client 'K' = KEEP -or- 'N' = NEW ONE (K/N) Pelton Computer Consultants P.O. Box 687 Ipswich, MA 01938 6.11 Schedule printing. If you elect to print a schedule the program will request the screen or printer. If you choose the printer press the <ESCAPE> key to stop the printing or the <SPACE> key to pause. ------------------------------------------------------------------------ Report now printing....hit <ESC> to stop... Stephen J. Foss 1 Chapter 7 - IRA CALC TABLE OF CONTENTS BY SECTION NUMBER 7.1 What is the IRA CALC program, and what does it do? 7.2 Features. 7.3 The questions the computer will be asking you. 7.4 The summary. 7.5 Exiting the program. 7.6 The abbreviated schedule. 7.7 The full schedule. 7.1 What is the IRA CALC program, and what does it do? IRA CALC is a computer program that calculates the ending balance for a money-growth financial problem like that of an individual retirement account. The program accepts an initial amount (when you open the account, say), a recurring monthly amount, and a recurring yearly amount, with the associated deposit dates. A summary of information, an abbreviated schedule, and a full schedule can be printed or displayed. The IRA CALC program solves many growth problems; not just IRA's. Compounded daily interest is used in the calculations. As an example, consider an IRA with interest rate 5.5%, an initial deposit of $100 on Feb. 2, 1989, a recurring monthly deposit of $50 which first starts on Mar. 25, 1989, and a recurring yearly deposit of $500 which starts on Apr 15, 1989. The IRA program calculated the final balance as $6,439.28. 7.2 Features. The program offers you the following features: o Full glorious, attractive color screens, or black & white (mono) o Fancy reports to screen or printer o Accepts three type of financial data: initial deposit amount, monthly deposit amount, and yearly deposit amount o Pause or quit during report output o Easy-to-understand queries (questions) - you don't need financial training to use this program o Escape or quit at any time o Easy to change data and rerun the program o This program aids you in solving serious financial-calculation problems o Fast loading o The program is well thought out; people who use it like it o Continuous dedicated support by the author o Excellent documentation o This program will increase your productivity and give you a true sense of accomplishment o Information is where you need it. 7.3 The questions the computer will be asking you. Below is shown a typical session of the IRA CALC program: Enter Annual Interest Rate (e.g., 7.5, E=exit) >5.5 Enter Total Number of Years >5 Enter Total Number of Months >0 5 Years, and 0 Months for 60 Total periods Initial Deposit Amount: This is the amount you first deposited when you opened your account. Enter Initial Deposit Amount = 100 Enter Initial Deposit Date (MMDDYY) = 02-01-89 Monthly Contribution Amount: This is the recurring monthly amount you plan to put into your IRA every month. If zero, just hit <ENTER>, or enter 0. Enter Monthly Contribution Amount = 50 Monthly Contribution Date: This is the date of your FIRST monthly contribution. The day of the month will be used in the calculations. Enter Monthly Contribution Date (MMDDYY) = 03-25-89 Yearly Contribution Amount: If you plan to make a yearly contribution perhaps at tax time, put amount here. If zero, just hit <ENTER>, or enter 0. Enter Yearly Contribution Amount = 500 Yearly Contribution Date: This is the date of your YEARLY recurring contribution. It will be used in the calculations. Enter Yearly Contribution Date (MMDDYY) = 04-15-89 Skip in-between displays and show a summary report (S=skip to summary/N=no) 7.4 The summary. Summary Statistics: Total Number of Periods = 60 Annual Interest Rate = 5.5000 Daily Interest Rate = .000150685 Initial Deposit Amount = 100.00 Initial Deposit Date = 02-01-89 Regular Monthly Contribution = 50.00 Regular Monthly Contribution Date = 03-25-89 Regular Yearly Contribution = 500.00 Regular Yearly Contribution Date = 04-15-89 Grand Total Interest Gained = 889.28 Grand Total Contributions Made = 5,550.00 Final Balance = $ 6,439.28 ========= -------------------------------------------------------------------------- Would you like a printout of this page? (Y/N) 7.5 Exiting the program. Pressing <ESCAPE> and sometimes E or e will either back you out of that par- ticular inquiry sequence or completely exit you from the program, depend- ing on the context you are within. Pressing the <F1> key will repeat the previous question. Suppose you made a mistake on the principal amount (you typed 9000 instead of 90000), then at the interest rate inquiry just press <F1> to go back to the principal amount inquiry and enter the correct quantity. 7.6 The abbreviated schedule. Total Number of YEAR DEPOSITS INTEREST BALANCE ------------------------------------------------------------------------- 1989 1,100.00 36.08 1,136.08 1990 1,100.00 100.17 2,336.25 1991 1,100.00 168.03 3,604.28 1992 1,100.00 239.72 4,944.00 1994 1,100.00 315.46 6,359.46 1995 50.00 29.82 6,439.28 GRAND TOTALS 5,550.00 889.28 6,439.28 =========== 7.7 The full schedule. Total Number of YEAR DEPOSITS INTEREST BALANCE ------------------------------------------------------------------------- 1 FEB 1989 100.00 .41 100.41 2 MAR 1989 50.00 .52 150.92 3 APR 1989 550.00 1.85 702.78 4 MAY 1989 50.00 3.34 756.11 5 JUN 1989 50.00 3.46 809.57 6 JUL 1989 50.00 3.84 863.41 7 AUG 1989 50.00 4.09 917.50 8 SEP 1989 50.00 4.19 971.69 9 OCT 1989 50.00 4.59 1,026.29 10 NOV 1989 50.00 4.69 1,080.97 11 DEC 1989 50.00 5.11 1,136.08 --------- --------- Totals for year = 1989 1,100.00 36.08 12 JAN 1990 50.00 5.36 1,191.44 13 FEB 1990 50.00 5.06 1,246.50 . . . . . . . . . . . . . . . . . . 52 MAY 1993 50.00 26.90 5,813.76 53 JUN 1993 50.00 26.38 5,890.13 54 JUL 1993 50.00 27.62 5,967.75 55 AUG 1993 50.00 27.99 6,045.74 56 SEP 1993 50.00 27.43 6,123.17 57 OCT 1993 50.00 28.71 6,201.88 58 NOV 1993 50.00 28.13 6,280.01 59 DEC 1993 50.00 29.45 6,359.46 --------- --------- Totals for year = 1994 1,100.00 315.46 60 JAN 1995 50.00 29.82 6,439.28 --------- --------- Totals for year = 1995 50.00 29.82 GRAND TOTALS 5,550.00 889.28 6,439.28 =========== Chapter 8 - G7 VARI-LOAN TABLE OF CONTENTS BY SECTION NUMBER 8.1 What is the G7 VARI-LOAN program, and what does it do? 8.2 Features. 8.3 The commands. 8.4 The HELP command. 8.5 Exiting the program. 8.6 Displaying a Schedule. 8.7 Schedule printing. 8.8 G7 VARI-LOAN Example 1 8.9 G7 VARI-LOAN Example 2 8.10 G7 VARI-LOAN Example 3 8.11 G7 VARI-LOAN Example 4 8.12 Example 5: Finding the Future Value of a Present Amount. 8.13 More examples available upon request. 8.1 What is the G7 VARI-LOAN program, and what does it do? With this Pelton Financial Utility you can analyze one or two different complex loans in which the interest rates or payment amounts may vary from payment-to-payment. Secondly, you can quickly compare the two loans via the side-by-side analysis summary. With G7 VARI-LOAN you can change any rate or payment amount, list the first three or last three payments, or show a summary (first 3 and last 3). You can also expand or shrink (balloon) a loan, and you can save and recall your work! The "compare" feature clearly helps you to decide which loan is better for you. G7 VARI-LOAN has many other helpful features as you will see later. 8.2 Features. The program offers you the following features: o Full glorious, attractive color screens, or black & white (mono) o Fancy reports to screen or printer o Pause or quit during report output o Easy to change data and rerun the program o Escape or quit at any time o Client's name and address block is saved for convenience o This program aids you in solving serious financial-calculation problems o Get help at the press of a key o Fast loading o Can save and recall sessions to/from a disk file o The program is well thought out; people who use it like it o Fast execution o Continuous dedicated support by the author o Excellent documentation o This program will increase your productivity and give you a true sense of accomplishment o Information is where you need it. 8.3 The commands. The commands are shown similar to the actual top-level help screen, below. . - : 1 2 ADD BALLOON BEGBAL CALC CHANGE CLEAR CLS CMD COMMENT COMPARE DOWN EXIT EXPAND FILE FV GET GO HEAD HELP HISTORY I LOAN N PREVIOUS PAYMENT PMT PRIN PRINT PV RATE REBUILD RECALL RESET SAVE SHOW SKEL STATUS STORE SUBTRACT SUMMARY TAIL TERM TREE UNBALLOON UP USE YEAR 8.4 Exiting the program. Pressing <ESCAPE> or E (or e) will either back you out of that particular inquiry sequence or completely exit you from the program, depending on the context you are within. You will be asked the "Are you sure? (Y/N)" con- firmation question. 8.5 Displaying a Schedule. To display a schedule use the SHOW command. Use HELP SHOW for the exact syntax. 8.6 Schedule printing. To print a schedule use the PRINT command. Use HELP PRINT for the exact syntax. 8.7 G7 VARI-LOAN Example 1. We have included five examples in this manual as opposed to discussing the commands individually in great detail. For the exact command syntax of a command, just type HELP XXXXX, where XXXXX is the command, or just type HELP for a listing of all commands. Your client said he borrowed $4,500 at 8.25 percent, supposedly, for 9 months. The payment schedule was rather casual, as he paid the following: $510.00, $525.00, $400.00, $475.00, $375.00, and the most recent 6th payment, $515.00. Ascertain your client's financial status, and document the proper schedule of payments for this loan. Use G7 VARI-LOAN by choosing it from the main menu. The utility starts to run and the command prompt appears. Choose an environment as "loan 1". Then, set the principal (amount borrowed), the rate, and the term, as follows: loan 1 prin 4500 rate 8.25 term 9 Next, request a calculation for the appropriate payment by typing "get pmt" (you could also type a "-" as short hand for "get pmt"): get pmt payment = 517.35 This looks good, so let's set the payment amount as follows: pmt pmt This line set the payment amount to the amount calculated, $517.35. Next you must process the loan so that you'll have "line items" or payments to work with. How many line items will there be after the above loan head- ing information is processed? Nine, because there are 9 payments (one for each of the 9 months for which the amount was borrowed). You execute processing with: go You could have used the shorthand notation for processing also ("."). Now you're in a position to actually look at some results. There are three ways to quickly look over the processed loan, namely: "head", "tail", and "summary". Shorthand for "head", "tail" and "summary" are "h", "t", and "sum", respectively. At this time look over the first 10 (only 9 will appear) line items (payments) by typing: head Notice that all 9 payments are neatly shown. "Head" shows the first 9 pay- ments or line items; similarly, "tail" shows you the last 9. "Summary" shows you the first 3 and last 3. Try "summary": summary "Summary" is great for long loans. Now you're ready to make some changes according to the real-life payment schedule. Keep the list of actual pay- ments handy, and type the following: change pmt 1 to 510 change pmt 2 to 525 change pmt 3 to 400 change pmt 4 to 475 change pmt 5 to 375 change pmt 6 to 515 go Don't forget the "go" because that will reprocess the loan with the new payment information. Then type "head" to see the first 9 payments: head The whole loan has been successfully reconstructed. Notice the last pay- ment is higher than usual, as expected, at $831.84. Your assignment is almost complete. Save your work and print out the documentation, assigning a name to the file (e.g., jsmith). After typing "save" the utility will request a name for the file, and you should type "jsmith" as the program will acknowledge your entry. Finally, request a printout of all line items by entering "print all": save enter filename: jsmith work saved under jsmith print all Now, the vital statistics of the loan are in black-and-white. The last thing to do is to exit the utility as follows: exit Are you sure? (y/n) y and then you are brought back to the utilities main menu. 8.8 G7 VARI-LOAN Example 2. Upon reviewing the previous loan (section 2.5) you found out that the client actually paid $555 on payment number 6, and $550 on payment number 2. Your job is to fix the loan, produce documentation, and save your work for later use. First, call up G7 VARI-LOAN from the utilities main menu. From the command prompt you RECALL the previously named file, jsmith, as follows: command >recall jsmith Work saved as JSMITH recalled Wish to rebuild this loan? (Y/N): Y Echo on? (Y/N) Y G7 successfully recalled the file jsmith and then asked you if you wish to rebuild it. You answered "Y" otherwise you would not be able to do any work on this client's loan information. Then G7 asked you if you wanted to watch it being rebuilt. You said "yes", and this is what you saw: rebuilding 1 LOAN 1 2 PRIN 4500 3 RATE 8.25 4 TERM 9 5 GET PMT payment = 517.35 6 PMT PMT 7 - payment = 517.35 8 GO 9 HEAD 10 CHAN PMT 1 TO 510 11 CHAN PMT 2 TO 525 12 CHAN PMT 3 TO 400 13 CHAN PMT 4 TO 475 14 CHAN PMT 5 TO 375 15 CHAN PMT 6 TO 515 16 GO 17 H done loan 1 > And you are left with the "loan 1" environment prompt. The rebuild oper- ation printed line numbers for your reference. Notice that on line 16 the loan actually got processed for you (GO). Now, you have to modify it to suit your new information. So you enter, change pmt 6 to 555 change pmt 2 to 550 . Notice the "." at the end. This means GO or "process". Then you can see your results by entering: tail which prints the last 10 lines out to the screen (here you only have 9 lines in all anyway). Here's what you got: PMT# ENDBAL PRIN-PMT INT-PMT CURR-PMT CURR-RATE 1 4,020.94 479.06 30.94 510.00 8.2500 2 3,498.58 522.36 27.64 550.00 8.2500 3 3,122.63 375.95 24.05 400.00 8.2500 4 2,669.10 453.53 21.47 475.00 8.2500 5 2,312.45 356.65 18.35 375.00 8.2500 6 1,773.35 539.10 15.90 555.00 8.2500 7 1,268.19 505.16 12.19 517.35 8.2500 8 759.56 508.63 8.72 517.35 8.2500 9 .00 759.56 5.22 764.78 8.2500 Next, you requested a summary: summary and here's what you got: PMT# ENDBAL PRIN-PMT INT-PMT CURR-PMT CURR-RATE 1 4,020.94 479.06 30.94 510.00 8.2500 2 3,498.58 522.36 27.64 550.00 8.2500 3 3,122.63 375.95 24.05 400.00 8.2500 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 1,268.19 505.16 12.19 517.35 8.2500 8 759.56 508.63 8.72 517.35 8.2500 9 .00 759.56 5.22 764.78 8.2500 Again, you only have 9 lines in your loan scenario (because the term is 9 months), but the summary is very useful when you have many lines, say 240 or so. Then finally, you save your work: save enter filename: jsmith work saved under jsmith print all 8.9 G7 VARI-LOAN Example 3. A lady wishes to purchase a car but she would like some guidance with her financing options. She can purchase the car for the full price of $4900 and get a 4.9% interest rate over 48 months; or she can take $1,100 cash back and get 10.5% financing for 48 months. Can you help her decide what to do? Let's use G7 VARI-LOAN. From the utilities main menu choose G7 Vari-Loan and enter the "loan 1" environment from the "command" prompt as follows: command >loan 1 loan 1 > Now you're ready to enter the information about the first loan as follows: prin 4900 rate 4.9 term 48 - payment = 112.63 pmt pmt . Remember, the "-" showed you the recommended payment, and you chose that payment by entering "pmt pmt". Plus, you had to process the loan (build a schedule) by typing the "." which is required to calculate the line items. At this time you could actually see what you produced if you were to type "head", "tail", or "summary". But let's move on to the second part of your problem. From the "loan 1" environment prompt, enter "loan 2" to permit entry of information about the second part (in the loan 2 environment): loan 2 > Then, you can use the "calc" function to do a quick calculation for us to determine the principal after cash-back. 4900-1100 is easy, but there are times when you have tougher arithmetic and "calc" will come in handy. loan 2 > calc 4900-1100 answer = 3,800 Then you enter your loan information as follows: prin 3800 rate 10.5 term 48 - payment = 97.30 pmt pmt . Again, use the recommended payment amount and process the loan into a schedule (.), as usual. Now, you're just about done, except for the most important part of any financial analysis: the explanation of your find- ings. From any environment, "loan 1", "loan 2", or "command", you can enter the "compare" command: compare If you forget to complete the processing of the loan in either environment 1 or 2, the compare output would tell you so and you could go back and do so (GO). Let's assume, however, that you have fully-processed loans. Here is the output from the comparison: Comparison: LOAN 1 DIFF LOAN 2 Total number of payments made 48 48 Original number of payments 48 48 Annual interest rate 4.9000 -5.6000 10.5000 Total principal paid off 4,900.00 1100.00 3,800.00 Average payment per period 112.63 15.33 97.30 Last payment made 112.19 15.32 96.88 Total interest paid 505.80 -364.17 869.98 Total amount paid 5,405.80 735.82 4,669.98 Ratio of interest to principal 10.32% -12.57 22.89% Ratio of interest to total amt 9.36% -9.27 18.63% Let's discuss the above comparison chart. Both loans have the same term, 48 months. Loan 1 has a lower interest rate, but how does that affect your client? The total principal borrowed in loan 1 is significantly higher, by $1,100. In our opinion, this is a strong point, because you are using OPM or Other Peoples' Money. Why should our lady use her own money for the small increment of only $15.32 (loan 1) per month more in payment? Next, consider the total interest paid back. This amount is an expense; it's the cost of borrowing money, and expenses should be minimized. This money is actually wasted, and the lady gets nothing for it except the priv- ilege of borrowing. The total interest paid back between loans is signif- icantly different. This difference is a major reason to go with loan 1 and advise your client that loan 1 may be in her better interest. Also, the total amount paid back is more in loan 1 because the lady borrowed more. The ratios also immediately display the attractiveness of loan 1. These interest ratios are half that of loan 2. The lady should take loan 1. This comparison chart of the G7 VARI-LOAN utility has really helped her. 8.10 G7 VARI-LOAN Example 4. A lady wants to get a mortgage loan on a new house. She went to two professional mortgage companies and was offered graduated financing from both firms. Can you compare these two loan scenarios using Pelton's Financial Utilities? The first company offered a loan with a 15-year term (180 payments) with the rate and payments varying over the first 6 years as follows: Year # Interest Rate Payment pmt #'s 1 5.500 $939.65 1-12 2 7.250 1010.12 13-24 3 9.550 1085.88 25-36 4 12.750 1167.32 37-48 5 14.800 1254.87 49-60 6 15.750 1348.99 61-72 7 10.250 1441.89 72-end The second company offered a loan with a 30-year term (360 payments) with the rate and payments varying over the first 3 years as follows: Year # Interest Rate Payment pmt #'s 1 8.875 $903.24 1-12 2 9.875 992.56 13-24 3 10.875 1082.60 25-end The second loan is less complex than the first. Actually, it was fairly easy to compare these two loan scenarios using G7 VARI-LOAN. The first thing to do is to use a standard word processor to makeup a G7 procedure file which you call KAREN.G7. It is important to use ASCII output from your word processor (which is sometimes called an "editor" by computer program- mers), so, if you use Word Perfect or Wordstar or a similar product, make sure the output is in the ASCII format. Using an editor makes it easy to write repeating lines and make quick changes, etc. When you finish the "file" shown below, save it and exit the editor (PC-WRITE was used in this example). command >loan 1 loan 1 >prin 115000 loan 1 >rate 5.5 loan 1 >term 180 loan 1 >- loan 1 >pmt pmt loan 1 >. loan 1 >change rate 13-24 to 7.25 loan 1 >change rate 25-36 to 9.55 loan 1 >change rate 37-48 to 12.75 loan 1 >change rate 49-60 to 14.80 loan 1 >change rate 61-72 to 15.75 loan 1 >change rate 73-180 to 10.25 loan 1 >change pmt 13-24 to 1010.12 loan 1 >change pmt 25-36 to 1085.88 loan 1 >change pmt 37-48 to 1167.32 loan 1 >change pmt 49-60 to 1254.87 loan 1 >change pmt 61-72 to 1348.99 loan 1 >change pmt 73-end to 1441.89 loan 1 >. loan 1 >loan 2 loan 2 >prin 115000 loan 2 >rate 8.875 loan 2 >term 360 loan 2 >pmt 903.24 loan 2 >go loan 2 >change rate 13-24 to 9.875 loan 2 >change rate 25-end to 10.875 loan 2 >change pmt 13-24 to 992.56 loan 2 >change pmt 25-end to 1082.60 loan 2 >go Next, run G7 VARI-LOAN from the utilities main menu. When you get the command prompt, recall your file and rebuild it: command >recall karen Work saved as KAREN recalled Wish to rebuild this loan? (Y/N): Y Echo on? (Y/N) Y Watch the loan get rebuilt by G7. Now, although you're basically finished, before you do a comparison you want to check on the last payment of each loan. Since you're at the "loan 2" prompt, type: loan 2 >tail and you get: PMT# ENDBAL PRIN-PMT INT-PMT CURR-PMT CURR-RATE --------------------------------------------------------------- 352 8,272.68 998.58 84.02 1,082.60 10.8750 353 7,265.06 1,007.63 74.97 1,082.60 10.8750 354 6,248.29 1,016.76 65.84 1,082.60 10.8750 355 5,222.32 1,025.97 56.63 1,082.60 10.8750 356 4,187.05 1,035.27 47.33 1,082.60 10.8750 357 3,142.39 1,044.65 37.95 1,082.60 10.8750 358 2,088.27 1,054.12 28.48 1,082.60 10.8750 359 1,024.60 1,063.68 18.92 1,082.60 10.8750 360 .00 1,024.60 9.29 1,033.88 10.8750 You did really get 360 payments with the last payment close to the others. So this loan looks very "normalized," i.e., you didn't expect to see the term shortened to, say, 342 payments, via a mistake by the loan designers. Then you want to check on the first loan scenario. Since you were in loan environment 2 move "up" to 1, and display the last 10 line items, as: loan 2 >up loan 1 >tail PMT# ENDBAL PRIN-PMT INT-PMT CURR-PMT CURR-RATE --------------------------------------------------------------- 172 11,115.24 1,335.54 106.35 1,441.89 10.2500 173 9,768.30 1,346.95 94.94 1,441.89 10.2500 174 8,409.84 1,358.45 83.44 1,441.89 10.2500 175 7,039.79 1,370.06 71.83 1,441.89 10.2500 176 5,658.03 1,381.76 60.13 1,441.89 10.2500 177 4,264.47 1,393.56 48.33 1,441.89 10.2500 178 2,859.00 1,405.46 36.43 1,441.89 10.2500 179 1,441.53 1,417.47 24.42 1,441.89 10.2500 180 .00 1,441.53 12.31 1,453.85 10.2500 Again, the first loan looks good also (see line 180, above), so you can compare them: loan 1 >compare And the results display immediately as: Comparison LOAN 1 DIFF LOAN 2 Total number of payments made 180 -180 360 Original number of payments 180 -180 360 Annual interest rate 5.5000 -3.3750 8.8750 Total principal paid off 115,000.00 115,000.00 Average payment per period 1,319.48 245.99 1,073.48 Last payment made 1,453.85 419.97 1,033.88 Total interest paid 122,505.59 -148,948.89 271,454.48 Total amount paid 237,505.59 -148,948.89 386,454.48 Ratio of interest to principal 106.53% 236.05% Ratio of interest to total amt 51.58% 70.24% Let's discuss these results. First of all, loan 1 has half as many pay- ments, but the cash flow is greater - the average monthly payment is $246 higher. Loan 1 is also more complex (to administrate); loan 2 is steadier (only 3 interest rate changes). You could lower the term of loan 2 con- siderably if you were to put a few dollars to a few hundred dollars extra per month against the principal (see our booklet on home mortgages en- titled, "Understanding Your Home Mortgage Loan and How to Pay if Off." This extra principal payment would be at our own discretion, i.e., if you had more money some months you'd pay more, and so on. Because loan 2 is less complex than loan 1, and because you can control the term by making extra payments, there may be no particular advantage to loan 1, except that the interest amount paid in loan 1 is much less than in loan 2! The borrower must decide between long-term goals and short-term cash flow. As a matter of fact, let's continue the discussion of loan 2 by adding some extra principal payment per month as follows: loan 1 >loan 2 loan 2 >add 94.00 to pmt all loan 2 >go loan 2 >tail What you did here was to move to loan environment 2 (you could have also said down to move "down" to loan environment 2) and then add an extra $94.00 payment towards principal. Then you processed the loan (GO) and displayed the last 10 line items (tail) which looks like: PMT# ENDBAL PRIN-PMT INT-PMT CURR-PMT CURR-RATE --------------------------------------------------------------- 232 8,256.39 1,091.88 84.72 1,176.60 10.8750 233 7,154.62 1,101.78 74.82 1,176.60 10.8750 234 6,042.86 1,111.76 64.84 1,176.60 10.8750 235 4,921.02 1,121.84 54.76 1,176.60 10.8750 236 3,789.02 1,132.00 44.60 1,176.60 10.8750 237 2,646.75 1,142.26 34.34 1,176.60 10.8750 238 1,494.14 1,152.61 23.99 1,176.60 10.8750 239 331.08 1,163.06 13.54 1,176.60 10.8750 240 .00 331.08 3.00 334.08 10.8750 Notice that the last payment is number 240! That's 20 years. So for another $94.00 per month you knocked 10 years off the life of the loan. Then, just to be complete, you ran another comparison (see below) which shows you the 240 periods of loan 2. You also see a $157 average differ- ence in monthly payment amount. The interested reader may wish to try to modify loan 2 further to reduce the number of payments (line items) to 180, and the run another loan comparison. Comparison LOAN 1 DIFF LOAN 2 Total number of payments made 180 -60 240 Original number of payments 180 -180 360 Annual interest rate 5.5000 -3.3750 8.8750 Total principal paid off 115,000.00 115,000.00 Average payment per period 1,317.37 157.75 1,159.62 Last payment made 1,161.56 827.48 334.08 Total interest paid 122,125.75 -41,182.93 163,308.68 Total amount paid 237,125.75 -41,182.93 278,308.68 Ratio of interest to principal 106.20% 142.01% Ratio of interest to total amt 51.50% 58.68% 8.12 Example 5: Finding the Future Value of a Present Amount. What will $1,000 be worth in 24 months at an interest rate of 9.1509%? Do the following: Choose G7 from the main utilities menu and you will get the "command" prompt: command>. Then, type: pv 1000 i 9.1509 n 24 get fv The future value will readily appear as $1,200. 8.13 More examples available upon request. Call or write the Pelton Computer Consultants for the availability of more G7 VARI-LOAN examples. Chapter 9 - FINANCE TABLE OF CONTENTS BY SECTION NUMBER 9.1 What is the FINANCE program, and what does it do? 9.2 Features. 9.3 The Main Menu. 9.4 The Growth Main Menu. 9.5 The Money Growth (with Deposits & Interest) Menu. 9.6 The Money Growth (Interest only) Menu. 9.7 The Money Disbursement Menu. 9.1 What is the FINANCE program, and what does it do? This utility is broken into two major sections: money growth, and money disbursement. Money growth, in itself, consists of two parts: growth of a sum by interest alone, and growth of a sum by interest and deposits. Money disbursement is the depletion by withdrawal of an interest-bearing sum over time. FINANCE will figure out any quantity - principal, rate, term, deposit or withdrawal, starting sum or ending balance, as long as five of these six quantities are known. As you can see, FINANCE is a very powerful program and can greatly assist you in financial planning. 9.2 Features. The program offers you the following features: o Full glorious, attractive color screens, or black & white (mono) o Fancy reports to screen or printer o Different compounding frequencies o Pause or quit during report output o Easy-to-understand queries (questions) - you don't need financial training to use this program o Escape or quit at any time o Client's name and address block is saved for convenience o This program aids you in solving serious financial-calculation problems o Fast loading o The program is well thought out; people who use it like it o Fast execution o Continuous dedicated support by the author o Excellent documentation o This program will increase your productivity and give you a true sense of accomplishment o Information is where you need it. 9.3 The Main Menu. FINANCE UTILITY MAIN MENU 1. MONEY GROWTH 2. MONEY DISBURSEMENT 3. EXIT PROGRAM Above is an example of the Main Menu. The utility is divided into two per- spectives: Money Growth and Money Disbursement. 9.4 The Growth Main Menu. GROWTH MAIN MENU 1. MONEY GROWTH - DEPOSITS + INTEREST 2. MONEY GROWTH - INTEREST ONLY 3. RETURN TO MENU Above is shown the Growth Main Menu. From this menu you may choose to analyze and find unknown quantities when your growth scenario is by interest only, as in a savings account with a one-time initial deposit, or by inter- est plus a constantly recurring deposit (into a savings account). 9.5 The Money Growth (with Deposits & Interest) Menu. MONEY GROWTH MENU - DEPOSITS & INTEREST Growth is by INTEREST gained on the account balance AND by additional PRINCIPAL payments (Deposits) to the account in the following: 1 - Find END BALANCE given BEGIN AMOUNT, RATE, TERM, DEPOSIT 2 - Find BEGIN AMOUNT given RATE, TERM, DEPOSIT, END BALANCE 3 - Find RATE given TERM, DEPOSIT, END BALANCE, BEGIN AMOUNT 4 - Find TERM given DEPOSIT, END BALANCE, BEGIN AMOUNT, RATE 5 - Find DEPOSIT given END BALANCE, BEGIN AMOUNT, RATE, TERM Payments against debt-account A made into interest-bearing account B: A - Find solution to A-B Account (payments from A into B). E - Exit and go back to Main Menu. Enter 1-5, A, or E > Above is shown the Money Growth Menu - Deposits & Interest. Use this menu to solve money-growth problems that involve growth by interest earned on account balance while making recurring deposits. Notice that any quantity may be solved for as long as the other four are known. Also, this menu presents a rather esoteric solution finder: an "A-B Account" as coined by Pelton. An A-B Account is a savings scenario in which the "A-side" rep- resents borrowed money being paid back to the "B-side" account which, of course, is interest-bearing. For example, suppose Mr. A borrows $10,000 from Mr. B at 12% per annum for 5 years. Mr. A's prescribed payment per month to Mr. B. is $222.44. Instead of paying $222.44 directly to Mr. B., Mr. A deposits the payment into a savings account which bears 6% per year. The ending balance is $15,596.05 instead of the traditional $13,347.00, a difference of more that $2,249. The traditional interest-to-principal ratio is 33.5% while that of the A-B Account method is 56.0% 9.6 The Money Growth (Interest Only) Menu. MONEY GROWTH MENU - INTEREST ONLY A sum of money is initially deposited in an interest- bearing account and grows over time by INTEREST ONLY, as in a savings bank account. 1 - Find END BALANCE given BEGIN AMOUNT, RATE, TERM 2 - Find BEGIN AMOUNT given RATE, TERM, END BALANCE 3 - Find RATE given TERM, END BALANCE, BEGIN AMOUNT 4 - Find TERM given END BALANCE, BEGIN AMOUNT, RATE E - Exit and go back to Main Menu. Enter 1-4, or E > Above is shown the Money Growth (Interest Only) Menu. Use this menu to solve money-growth problems that involve growth by interest only as if one made a one-time-only deposit into a savings account. Notice that any quan- tity may be solved for as long as the other four are known. 9.7 The Money Disbursement Menu. MONEY DISBURSEMENT MENU A fund has an initial amount of money in it, and thus gains interest. Disbursements, or out-payments, are amounts taken from the fund while it still gains interest. The fund may be totally depleted (to zero amount) or not: 1 - Find BEGIN AMOUNT given END BALANCE, RATE, TERM, WITHDRAWAL 2 - Find END BALANCE given RATE, TERM, WITHDRAWAL, BEGIN AMOUNT 3 - Find RATE given TERM, WITHDRAWAL, BEGIN AMOUNT, END BALANCE 4 - Find TERM given WITHDRAWAL, BEGIN AMOUNT, END BALANCE, RATE 5 - Find WITHDRAWAL given BEGIN AMOUNT, END BALANCE, RATE, TERM E - Exit and go back to Main Menu Enter 1-5, or E > Above is shown the Money Disbursement Menu. Use this section of the FINANCE utility when you have a sum of money that you want distributed periodically. Notice that if you know four of five quantities you may solve for the un- known. Chapter 10 - MGM TABLE OF CONTENTS BY SECTION NUMBER 10.1 What is the MGM program, and what does it do? 10.2 Features. 10.3 The bottom-line menu. 10.4 The Matrix screen. 10.5 Recurring and non-recurring deposits. 10.6 An Example. 10.7 The Matrix command. 10.8 The Calculate command. 10.9 The Report command. 10.10 The Recall command. 10.11 The Save command. 10.12 The Print command. 10.13 The Exit command. 10.14 Entering the number of months. 10.15 Entering the ending date. 10.16 More examples available upon request. 10.1 What is the MGM program, and what does it do? Money-growth calculations are easy, but MGM gives you a quick mechanism to enter some simple data and produce an answer. MGM presents you with a grid on which you enter a starting amount, a rate, a date, and a recurring or nonrecurring deposit amount. You can enter more than one line of this type of information. Then you simply press a button to get the ending balance to your money-growth problem. 10.2 Features. The program offers you the following features: o Full glorious, attractive color screens, or black & white (mono) o Fancy reports to screen or printer o Pause or quit during report output o Easy to change data and rerun the program o Escape or quit at any time o This program aids you in solving serious financial-calculation problems o Fast loading o Can save and recall sessions to/from disk files o The program is well thought out; people who use it like it o Fast execution o Continuous dedicated support by the author o Excellent documentation o This program will increase your productivity and give you a true sense of accomplishment o Information is where you need it. 10.3 The Bottom-line menu. <ESC> ─> CALCULATE MATRIX REPORT SAVE RECALL EXIT CLEAR 10.4 The Matrix screen. DEPOSIT DEPOSIT 1=RECUR ENDING |----DURATION---| DATE AMOUNT RATE 0=ONCE DATE YRS MOS WKS DAYS +---------+---------+---------+---+----------+----+----+----+----+ |---------|---------|---------|---|----------|----|----|----|----| |---------|---------|---------|---|----------|----|----|----|----| |---------|---------|---------|---|----------|----|----|----|----| |---------|---------|---------|---|----------|----|----|----|----| |---------|---------|---------|---|----------|----|----|----|----| |---------|---------|---------|---|----------|----|----|----|----| +---------+---------+---------+---+----------+----+----+----+----+ <ESC> ─> CALCULATE MATRIX REPORT SAVE RECALL EXIT CLEAR 10.5 Recurring and non-recurring deposits. The Matrix screen has a column named "1=RECUR/0=ONCE". This column may contain a "0" (or a blank) or a "1" only. If the deposit amount is a one- time deposit enter a blank or a "0" in the column. If the deposit takes place more than once, say on a monthly basis, then it's called a recurring deposit, so put a "1" in the column. See the example in section 10.6. 10.6 An Example. DEPOSIT DEPOSIT 1=RECUR ENDING |----DURATION---| DATE AMOUNT RATE 0=ONCE DATE YRS MOS WKS DAYS +---------+---------+---------+---+----------+----+----+----+----+ | 8/15/84 | 10.00| 5.2500 |---|----------|----|----|----|----| | 9/15/84 | 135.75|---------| 1 |----------|----| 10 |----|----| | 7/01/85 |---------| 5.5000 |---|----------|----|----|----|----| | 7/15/85 | 140.00|---------| 1 | 10/01/88 |----| 39 |----|----| |---------|---------|---------|---|----------|----|----|----|----| |---------|---------|---------|---|----------|----|----|----|----| +---------+---------+---------+---+----------+----+----+----+----+ BALANCE = $7,621.62 <ESC> ─> CALCULATE MATRIX REPORT SAVE RECALL EXIT CLEAR In this example the investor opened a savings account with $10 on 8/15/84. The annual interest rate was 5.25%. Notice that this is a one-time deposit. Next, he deposited $135.75 every 15th of the month starting in month 9, and that went on for 10 months. This is a RECURring deposit. On 7/1/85 the interest rate changed from 5.25% to 5.5%. Starting on 7/15/85 through 9/15/88 he deposited $140.00 the 15th of each month (RECUR=1). The ENDING DATE of 10/01/88 overrides the 39-month DURATION here, so we could have entered 50 instead of 39 (the program knows when to terminate the savings scenario). During the data entry we were in "MATRIX" mode, so when we finished data entry we pressed <ESCAPE> which brought us back to the menu line. Then, to get the BALANCE we simply pressed C or highlighted CALCULATE and pressed <ENTER>. Magically, the BALANCE appeared as shown above. 10.7 The Matrix command. Pressing M or <ENTER> when the MATRIX command is highlighted brings you into the MATRIX build environment. 10.8 The Calculate command. Pressing C or <ENTER> when the CALCULATE command is highlighted starts the matrix calculation which results in the final balance displayed in the lower right-hand corner. This balance is your goal. 10.9 The Report command. Pressing P or <ENTER> when the REPORT command is highlighted prints a report, complete with all calculations and final balance. 10.10 The Recall command. Pressing R or <ENTER> when the RECALL command is highlighted loads an MGM file into the matrix. Don't enter a file extension (see section 10.11). 10.11 The Save command. Pressing S or <ENTER> when the SAVE command is highlighted stores the MGM matrix to a disk file. You will be prompted for a file name. You do not have to nor should you use a file extension (e.g., .TXT, or .DOC) because MGM appends its own extension to the filename's end. 10.12 The CLEAR command. Pressing L or <ENTER> when the CLEAR command is highlighted empties out the matrix and zeroes out the data. Use this command when you want to start over. 10.13 The Exit command. Pressing E or <ENTER> when the EXIT command is highlighted exits you into the confirmation request, "Are you sure? (Y/N)". Pressing Y will exit you from the MGM utility. 10.14 Entering the number of months. Refer to section 10.6. For a recurring-deposit situation (see section 10.5) you must have placed a "1" in the RECUR column, therefore, you must have a DURATION entry. In 10.6 we have 10 MOS for one line item, and 39 MOS for another line item. These DURATIONs are the number of months you explicitly want that line item to recur. See section 10.15. 10.15 Entering the ending date. Refer to section 10.6. In most cases the ENDING DATE is automatically calculated, i.e., if you leave it out. But, if you enter an ENDING DATE it will override the DURATION entry. 10.16 More examples available upon request. Call or write the Pelton Computer Consultants for the availability of more MGM examples. End