CompIntCharg {iemisc}

Compound Interest Charged (Engineering Economics)

Description

Computes the total interest paid at the end of n periods using compound interest

Usage

CompIntCharg(
  P,
  n,
  i,
  frequency = c("annual", "semiannual", "quarter", "bimonth", "month", "daily")
)

Arguments

P

numeric vector that contains the present value(s)

n

numeric vector that contains the period value(s)

i

numeric vector that contains the interest rate(s) as a percent

frequency

character vector that contains the frequency used to obtain the number of periods [annual (1), semiannual (2), quarter (4), bimonth (6), month (12), daily (365)]

Details

Compound Interest Charged is expressed as

I = P\left(1 + i\right)^n - P

P

the "principal amount (lent or borrowed)"

I

the "total interest paid"

i

the "interest rate per interest period"

n

the "number of interest periods"

Value

CompIntCharg numeric vector that contains the total interest paid at the end of n periods rounded to 2 decimal places

Author(s)

Irucka Embry

References

1. SFPE Handbook of Fire Protection Engineering. 3rd Edition, DiNenno, P. J.; Drysdale, D.; Beyler, C. L.; Walton, W. D., Editor(s), page 5-94, 2002. Chapter 7; Section 5; NFPA HFPE-02. See https://web.archive.org/web/20180127185316/http://fire.nist.gov/bfrlpubs/build02/PDF/b02155.pdf.

2. William G. Sullivan, Elin M. Wicks, and C. Patrick Koelling, Engineering Economy, Fourteenth Edition, Upper Saddle River, New Jersey: Pearson/Prentice Hall, 2009, page 120.

3. Chinyere Onwubiko, An Introduction to Engineering, Mission, Kansas: Schroff Development Corporation, 1997, page 205-206.

Examples

library(iemisc)

# Compound Interest example from SFPE Reference text
# Modified example to provide the compounded interest amount paid only

CompIntCharg(100, 5, 10, frequency = "annual") # the interest rate is 10\%