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From |
Lance Erickson <[email protected]> |

To |
"[email protected]" <[email protected]> |

Subject |
st: RE: Calculating compound interest using loops? |

Date |
Mon, 9 Jul 2012 21:42:44 +0000 |

```
Hi Sara,
Something like this (below) should give you a more efficient version of the code you had.
Best,
Lance
// create test data
clear
input id principal rate payment
1 200000 .005 1199.1
end
// get amount of monthly interest
local interest = 0
forvalues i = 1/360 {
local j = `i' - 1
gen int`i' = (principal - (payment*`j') + `interest') * rate
local interest "`interest' + int`i'"
}
// get amount of yearly interest
local l = 1
foreach k of numlist 12(12)360 {
local m = `k' - 11
egen int_y`l' = rowtotal(int`m'-int`k')
local ++l
}
-----Original Message-----
From: [email protected] [mailto:[email protected]] On Behalf Of Sara Kimberlin
Sent: Monday, July 09, 2012 1:23 PM
To: [email protected]
Subject: st: Calculating compound interest using loops?
Hello,
I'm trying to calculate annual interest payments on a 30-year loan, with interest compounding monthly, and can't figure out how to write the code efficiently.
Pre-defined variables include principal, rate, and monthly_payment. I know I can manually calculate the amount of interest for each monthly period like this:
gen interest_month1 = principal * rate
gen interest_month2 = (principal - (monthly_payment * 1) +
interest_month1) * rate
gen interest_month3 = (principal - (monthly_payment * 2) +
interest_month1 + interest_month2) * rate
gen interest_month4 = (principal - (monthly_payment * 3) +
interest_month1 + interest_month2 + interest_month3) * rate
... and so on through interest_month360.
And then I can manually add up the monthly interest to calculate the annual interest for each year, e.g.:
gen interest_year1 = interest_month1 + interest_month2... + interest_month12
But I think there must be a way to write this much more efficiently using loops, and I haven't been able to figure it out. I'd appreciate any help.
Thank you,
Sara
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```

**Follow-Ups**:**Re: st: RE: Calculating compound interest using loops?***From:*Karen Zhang <[email protected]>

**Re: st: RE: Calculating compound interest using loops?***From:*Sara Kimberlin <[email protected]>

**References**:**st: Calculating compound interest using loops?***From:*Sara Kimberlin <[email protected]>

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