/*
* Copyright (c) 2005-2011 Grameen Foundation USA
* All rights reserved.
*
* Licensed under the Apache License, Version 2.0 (the "License");
* you may not use this file except in compliance with the License.
* You may obtain a copy of the License at
*
* http://www.apache.org/licenses/LICENSE-2.0
*
* Unless required by applicable law or agreed to in writing, software
* distributed under the License is distributed on an "AS IS" BASIS,
* WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or
* implied. See the License for the specific language governing
* permissions and limitations under the License.
*
* See also http://www.apache.org/licenses/LICENSE-2.0.html for an
* explanation of the license and how it is applied.
*/
package org.mifos.clientportfolio.newloan.domain;
import org.mifos.accounts.productdefinition.util.helpers.GraceType;
import org.mifos.framework.util.helpers.Money;
public class DecliningBalanceLoanInterestCalculator implements LoanInterestCalculator {
@Override
public Money calculate(LoanInterestCalculationDetails loanInterestCalculationDetails) {
Money loanAmount = loanInterestCalculationDetails.getLoanAmount();
Double interestRate = loanInterestCalculationDetails.getInterestRate();
GraceType graceType = loanInterestCalculationDetails.getGraceType();
Integer gracePeriodDuration = loanInterestCalculationDetails.getGracePeriodDuration();
Integer numberOfInstallments = loanInterestCalculationDetails.getNumberOfInstallments();
Double interestFractionalRatePerInstallment = loanInterestCalculationDetails.getInterestFractionalRatePerInstallment();
return getDecliningInterestAmount_v2(graceType, gracePeriodDuration, numberOfInstallments, loanAmount, interestRate, interestFractionalRatePerInstallment);
}
/**
* Compute the total interest due on a declining-interest loan. Interest during a principal-only grace period is
* calculated differently from non-grace-periods.
* <p>
* The formula is as follows:
* <p>
* The total interest paid is I = Ig + In where Ig = interest paid during any principal-only grace periods In =
* interest paid during regular payment periods In = A - P A = total amount paid across regular payment periods The
* formula for computing A is A = p * n where A = total amount paid p = payment per installment n = number of
* regular (non-grace) installments P = principal i = interest per period
*/
private Money getDecliningInterestAmount_v2(GraceType graceType, Integer gracePeriodDuration, Integer numOfInstallments,
Money loanAmount, Double interestRate, Double interestFractionalRatePerInstallment) {
Money nonGraceInterestPayments = getDecliningInterestAmountNonGrace_v2(numOfInstallments, loanAmount, interestRate, interestFractionalRatePerInstallment);
Money interest = nonGraceInterestPayments;
if (graceType.equals(GraceType.PRINCIPALONLYGRACE)) {
nonGraceInterestPayments = getDecliningInterestAmountNonGrace_v2(numOfInstallments-gracePeriodDuration, loanAmount, interestRate, interestFractionalRatePerInstallment);
Money graceInterestPayments = getDecliningInterestAmountGrace_v2(loanAmount, gracePeriodDuration, interestFractionalRatePerInstallment);
interest = graceInterestPayments.add(nonGraceInterestPayments);
}
return interest;
}
private Money getDecliningInterestAmountGrace_v2(Money loanAmount, Integer gracePeriodDuration, Double interestFractionalRatePerInstallment) {
return loanAmount.multiply(interestFractionalRatePerInstallment).multiply(Double.valueOf(gracePeriodDuration.toString()));
}
private Money getDecliningInterestAmountNonGrace_v2(final int numNonGraceInstallments, Money loanAmount, Double interestRate, Double interestFractionalRatePerInstallment) {
Money paymentPerPeriod = getPaymentPerPeriodForDecliningInterest_v2(numNonGraceInstallments, interestRate, loanAmount, interestFractionalRatePerInstallment);
Money totalPayments = paymentPerPeriod.multiply((double) numNonGraceInstallments);
return totalPayments.subtract(loanAmount);
}
/*
* Calculates equal payments per period for fixed payment, declining-interest loan type. Uses formula from
* http://confluence.mifos.org :9090/display/Main/Declining+Balance+Example+Calcs The formula is copied here: EMI =
* P * i / [1- (1+i)^-n] where p = principal (amount of loan) i = rate of interest per installment period as a
* decimal (not percent) n = no. of installments
*
* Translated into program variables and method calls:
*
* paymentPerPeriod = interestFractionalRatePerPeriod * getLoanAmount() / ( 1 - (1 +
* interestFractionalRatePerPeriod) ^ (-getNoOfInstallments()))
*
* NOTE: Use double here, not BigDecimal, to calculate the factor that getLoanAmount() is multiplied by. Since
* calculations all involve small quantities, 64-bit precision is sufficient. It is is more accurate to use
* floating-point, for quantities of small magnitude (say for very small interest rates)
*
* NOTE: These calculations do not take into account EPI or grace period adjustments.
*/
private Money getPaymentPerPeriodForDecliningInterest_v2(final int numInstallments, Double interestRate, Money loanAmount,
Double interestFractionalRatePerInstallment) {
double factor = 0.0;
if (interestRate == 0.0) {
Money paymentPerPeriod = loanAmount.divide(numInstallments);
return paymentPerPeriod;
}
factor = interestFractionalRatePerInstallment / (1.0 - Math.pow(1.0 + interestFractionalRatePerInstallment, -numInstallments));
Money paymentPerPeriod = loanAmount.multiply(factor);
return paymentPerPeriod;
}
}