cbe-npv-interest-waiver/cbe-npv-interest-waiver.js

It computes NPV in the case of interest waiver

/*

 * CBEAmortization

 * Calculating CBE's Amortization

 * https://github.com/gama1221/cbe-npv-interest-waiver

 *

 * Copyright (c) 2023 Getinet Amare Mekonnen

 * Licensed under the CBE license.

 */

/**

 *

 * @param {number} num - An input to be rounded

 * @returns - It returns two decimal point rounded value

 */

const roundTheValue = (num) => {

  return Math.round(num * 100) / 100;

};

/**

 *

 * @param {number} amount - Original Loan

 * @param {number} annualInterestRate - Annual interest rate to be paid for loan

 * @param {number} loanPeriodInYears - Length of a year that a loan takes to complete

 * @param {number} numberOfPaymentsPerYear - It holds how many number of years it tooks to complete the loan

 * @param {number} principalSum - Summation of each principal for number of payments

 * @param {number} cumulativeInterest - Summation of interests.

 *

 *  @returns {{ principal: number, interest: number, scheduledPayment: number, endingBalance: number, cumulativeInterest: number }}

 */

var counter = 0;
var getNextPaymentSchedule = (
  month,
  amount,
  annualInterestRate,
  loanPeriodInYears,
  numberOfPaymentsPerYear,
  waivedNumberOfPayment,
  principalSum,
  cumulativeInterest
) => {

  var principal;
  var interest;
  var scheduledPayment;
  var irmPow;
  var interestRateMonth = annualInterestRate / 100 / (numberOfPaymentsPerYear);
  var numberOfPayment;
  var endingBalance;
  // var counter = 0;
  numberOfPayment = loanPeriodInYears * numberOfPaymentsPerYear;   
  /**

   * 

   * We need to change it for Interest waiver

   */

  if(counter < waivedNumberOfPayment ){
      // scheduledPayment = interest = ((annualInterestRate / 100)/numberOfPaymentsPerYear)*amount;  
      // principal = 0;
      // endingBalance = parseFloat(amount);waivedNumberOfPayment
      irmPow = Math.pow(1 + interestRateMonth, - numberOfPayment);
      scheduledPayment = roundTheValue(
        (parseFloat(amount) * (annualInterestRate / 100)) /
          ((numberOfPaymentsPerYear) * (1 - irmPow))
      );
      interest = roundTheValue((parseFloat(amount) - principalSum) * interestRateMonth);  
      principal = scheduledPayment - interest;
      endingBalance = roundTheValue(parseFloat(amount) - principalSum - principal) ;
      scheduledPayment = principal;        
      cumulativeInterest = cumulativeInterest ;    
  }
  else{
    irmPow = Math.pow(1 + interestRateMonth, -numberOfPayment);
    scheduledPayment = roundTheValue(
      (parseFloat(amount) * (annualInterestRate / 100)) /
        ((numberOfPaymentsPerYear) * (1 - irmPow))
    );
    interest = roundTheValue((parseFloat(amount) - principalSum) * interestRateMonth);
    principal = roundTheValue(scheduledPayment - interest);
    endingBalance = parseFloat(amount) - principalSum - principal;
    cumulativeInterest = cumulativeInterest + interest;
  }  
  counter++;
  return {
    month:month,
    principal:roundTheValue(principal),
    interest: roundTheValue(interest),
    scheduledPayment: scheduledPayment,
    endingBalance:roundTheValue(endingBalance),
    cumulativeInterest: cumulativeInterest,   
  };
};  
/**
 * It holds the parametrs we provide on the GUI, It has four parametrs
 * @param {number} amount - Original Loan
 * @param {number} annualInterestRate - Annual interest rate to be paid for loan
 * @param {number} loanPeriodInYears - Length of a year that a loan takes to complete
 * @param {number} numberOfPaymentsPerYear - It holds how many number of years it tooks to complete the loan*
 * @returns {{ scheduledPayments: number, amount: number, cumulativeInterest: number, principalSum: number, sum: number }}
 */
const CBEAmortization = (
  amount,
  annualInterestRate,
  loanPeriodInYears,
  riskPremium,
  numberOfPaymentsPerYear,
  waivedNumberOfPayment
) => {
  if (
    !amount ||
    amount <= 0 ||
    !loanPeriodInYears ||
    loanPeriodInYears <= 0 ||
    !annualInterestRate ||
    annualInterestRate <= 0 ||
    !riskPremium ||
    riskPremium <= 0    
  ) {
    throw new Error(
      "wrong parameters: "
        .concat(amount, " ")
        .concat(loanPeriodInYears, " ")
        .concat(riskPremium, " ")
        .concat(annualInterestRate)
    );
  }
  var scheduledPayments = [];
  var cumulativeInterest = 0;
  var principalSum = 0;
  var sum = 0;
  var p_s = 0;
  var s_s = 0;
  var i_s = 0;
  var m = 0;
  var yearlyScheduledPaymentInterestWaiver = [];
  var yearlyPrincipalSummationInterestWaiver = [];
  var yearlyInterestSummationInterestWaiver = [];
  var NPV = [];
  var month = 1;
  for (var i = 0; i < loanPeriodInYears * numberOfPaymentsPerYear; i++) {
    var inst = getNextPaymentSchedule(
      month,
      amount, 
      annualInterestRate,
      loanPeriodInYears,
      numberOfPaymentsPerYear,
      waivedNumberOfPayment,
      principalSum,
      cumulativeInterest,    
    );  
    month = month;
    sum += inst.scheduledPayment;
    principalSum += inst.principal;
    var scheduleTime = loanPeriodInYears * numberOfPaymentsPerYear;
  
    var interestRateMonth = annualInterestRate / 100 / (numberOfPaymentsPerYear);
    // if(interestprincipalWaiverExtension = interestprincipalWaiverExtension){
    waivedInterestSum =  roundTheValue((parseFloat(amount) - principalSum) * interestRateMonth);
     waivedInterestSum = waivedInterestSum * waivedNumberOfPayment;
     additionalInterest = waivedInterestSum / (scheduleTime - waivedNumberOfPayment);
    // }
    
    if (counter <= waivedNumberOfPayment) {     
      inst.interest = 0;
      cumulativeInterest += inst.interest;
    }
    else{
      cumulativeInterest += inst.interest;
      inst.interest = roundTheValue(inst.interest + additionalInterest);
    }
    s_s += inst.scheduledPayment;
    p_s += inst.principal;
    i_s += inst.interest;
    if (i === loanPeriodInYears * numberOfPaymentsPerYear - 1) {
      principalSum += inst.endingBalance;
      sum += inst.endingBalance;
      inst.endingBalance = 0;
    }
    if(m === (numberOfPaymentsPerYear - 1))  {
      yearlyScheduledPaymentInterestWaiver.push(s_s);
      yearlyPrincipalSummationInterestWaiver.push(p_s);
      yearlyInterestSummationInterestWaiver.push(i_s);
      s_s = 0;
      i_s = 0;
      p_s = 0;
      m = -1;
    }
    month++;
    m++;
    scheduledPayments.push(inst);
    var riskPremiumWithAnnualInterestRate = (1+(parseFloat(annualInterestRate) + parseFloat(riskPremium))/100);
    if(i === (loanPeriodInYears * numberOfPaymentsPerYear - 1)){
      /**

       *  Let me sum the following values

       *    yearlyPrincipalSummation

       *    yearlyInterestSummations

       *  And compute the NPV

       */
      var power = 1;
      for(var n = 0;n < yearlyInterestSummationInterestWaiver.length; n++){
        var npv1 = ((yearlyInterestSummationInterestWaiver[n] + yearlyPrincipalSummationInterestWaiver[n]) / Math.pow(riskPremiumWithAnnualInterestRate, power)); 
        NPV.push(npv1);
        npv1 = 0;
        power++; 
      }

      /**

       * Summation of NPV

       */

      var npmSummation = 0;
      for(var s = 0; s < NPV.length; s++){
        npmSummation += NPV[s];
      }
    }
  }
  return {
    scheduledPayments: scheduledPayments,
    amount: roundTheValue(amount),
    cumulativeInterest: roundTheValue(cumulativeInterest),
    principalSum: roundTheValue(principalSum),
    sum: roundTheValue(sum),
    scheduledPayment:inst.scheduledPayment,
    actualNumberOfPayments: (loanPeriodInYears * numberOfPaymentsPerYear),
    yearlyPrincipalSummationInterestWaiver:yearlyPrincipalSummationInterestWaiver,
    yearlyInterestSummationInterestWaiver:yearlyInterestSummationInterestWaiver,
    yearlyScheduledPaymentInterestWaiver:yearlyScheduledPaymentInterestWaiver,
    NPV:roundTheValue(npmSummation),
  };
};
module.exports = CBEAmortization;