mortgage_calculations 0.1.9

data/Manifest

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+Manifest
+README.rdoc
+Rakefile
+Version.yml
+features/apr.feature
+features/step_definitions/apr_steps.rb
+features/support/env.rb
+lib/mortgage_calc.rb
+lib/mortgage_calc/mortgage_util.rb
+mortgage_calculations.gemspec
+spec/mortgage_calc/mortgage_util_spec.rb
+spec/spec_helper.rb

data/README.rdoc

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+= mortgage_calc
+
+http://www.pathf.com/blogs/2010/02/mortcalc-gem/
+
+Calculates mortgage APR, monthly payments, and fees.
+
+== INSTALL
+  $ sudo gem install gemcutter
+  $ gem tumble
+  $ sudo gem install mortgage_calc
+or add the following to your <b>environment.rb</b>
+  config.gem 'mortgage_calc'
+
+==Example:
+    loan_amount = 350000
+    interest_rate = 4.75
+    period = 30 * 12
+    lender_fee = 800
+    points = 1.0
+
+    mort_calc = MortgageCalc::MortgageUtil.new(loan_amount, interest_rate, period, lender_fee, points)
+    
+    mort_calc.apr
+    mort_calc.monthly_payment
+    mort_calc.monthly_payment_with_fees
+    mort_calc.total_fees
+
+==Formulas used
+===Monthly payment with fees
+    P = [(C + E) r (1 + r)^N]/[(1 + r)^N - 1]
+
+    P = monthly payment
+    C = Loan amount
+    r = Interest rate
+    N = Period in months
+    E = Lender fees
+
+===Monthly payment without fees is calculated like above with E = 0.
+
+===APR
+    [a (1 + a)^N] / [(1 + a)^N - 1] - P/C = 0
+    a = A/1200
+    N = Period in months
+    P = Monthly payment
+    C = Loan amount
+
+===Total fees
+Total fees are calculated simply by adding Lender fees to the points paid by borrower.
+    T = E + P(C)

data/Rakefile

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+require 'rubygems'
+require 'rake'
+require 'echoe'
+require 'spec'
+require 'cucumber'
+require 'lib/mortgage_calc'
+
+require 'cucumber/rake/task'
+require 'spec/rake/spectask'
+
+Echoe.new("mortgage_calculations", MortgageCalc::VERSION) do |p|
+  p.description = "Utilities for Mortgage related calculations (APR and Monthly Payments)"
+  p.url = "http://www.pathf.com/blogs/2010/02/mortcalc-gem/"
+  p.author = "Perry Hertler"
+  p.email = "perry@hertler.org"
+  p.ignore_pattern = ["tmp/*", "script/*, .idea/*"]
+  p.development_dependencies = ["rspec >=1.3.1"]
+end
+
+Dir["#File.dirname(__FILE__)}/tasks/*.rake"].sort.each { |ext| load ext }
+spec_files = Rake::FileList["spec/**/*_spec.rb"]
+
+desc "Run specs"
+Spec::Rake::SpecTask.new do |t|
+  t.spec_files = spec_files
+  t.spec_opts = ["-c"]
+end
+
+Cucumber::Rake::Task.new(:features) do |t|
+  t.cucumber_opts = "features --format progress"
+end
+
+task :default => [:spec, :features]

data/Version.yml

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+---
+:major: 0
+:minor: 1
+:patch: 9

data/features/apr.feature

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+Feature: Calculate APR
+  In order to show sorted APR search results
+  As a person navigating OMT
+  I want to see correct APRs
+
+  Scenario Outline: Calculate APR
+    Given <loan_amount>, <fees>, <points>, <rate>, <period>
+    Then the resultant apr should be <apr>
+
+  Scenarios: with APR fields
+    | loan_amount | fees  | points  | rate   | period | apr   |
+    | 125000      | 5000  | 0       | 6.5    | 360    | 6.881 |
+    | 125000      | 5000  | -1.25   | 6.5    | 360    | 6.763 |
+    | 400000      | 1200  | 0       | 5.25   | 180    | 5.296 |
+    | 125000      | 811   | 0.375   | 6.125  | 360    | 6.221 |
+    | 125000      | 811   | -0.375  | 6.5    | 360    | 6.526 |
+    | 100000      | 1000  | 0       | 7.0    | 360    | 7.099 |
+    | 100000      | 0     | 0       | 7.0    | 360    | 7.0   |
+    | 250000      | 3135  | 2.125   | 6.5    | 360    | 6.822 |
+    | 80000       | 800   | 1.2     | 5.125  | 360    | 5.319 |
+    | 100000      | 2000  | 0       | 5.9    | 480    | 6.056 |
+    | 400000      | 3159  | 0       | 4.375  | 360    | 4.442 |

data/features/step_definitions/apr_steps.rb

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+Given /^(.*), (.*), (.*), (.*), (.*)$/ do |loan_amount, fees, points, rate, period|
+  @mortgage_util = MortgageCalc::MortgageUtil.new(Integer(loan_amount), Float(rate), Integer(period), Float(fees), Float(points))
+end
+
+Then /^the resultant apr should be (.*)$/ do |apr_expected|
+  @mortgage_util.apr.should be_within(0.001).of(apr_expected.to_f)
+end

data/features/support/env.rb

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+$LOAD_PATH << File.join(File.dirname(__FILE__),"..","..","lib")
+require 'mortgage_calc'
+require 'spec/expectations'
+require 'spec/matchers'
+require 'spec/stubs/cucumber'

data/lib/mortgage_calc/mortgage_util.rb

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+module MortgageCalc
+  class MortgageUtil
+    attr_accessor :loan_amount, :interest_rate, :period, :fees, :points
+
+    def initialize(loan_amount, interest_rate, period=360, fees=0, points=0.0)
+      self.loan_amount = Float(loan_amount.to_s)
+      self.interest_rate = Float(interest_rate.to_s)
+      self.period = Integer(period.to_s)
+      self.fees = fees
+      self.points = Float(points.to_s)
+    end
+
+    def apr
+      @apr ||= calculate_apr
+    end
+
+    def monthly_payment
+      @monthly_payment ||= calculate_monthly_payment(self.loan_amount, monthly_interest_rate, self.period)
+    end
+
+    def monthly_payment_with_fees
+      @monthly_payment_with_fees ||= calculate_monthly_payment(self.loan_amount + total_fees, monthly_interest_rate, self.period)
+    end
+
+    def total_fees(negative_allowed = true)
+      #fees may not be negative (borrower is not paid)
+      total_fees = calculate_total_fees
+      !negative_allowed && total_fees < 0 ? 0 : total_fees
+    end
+
+    private
+    def monthly_interest_rate
+      self.interest_rate / 100 / 12
+    end
+
+    def calculate_monthly_payment(amount, monthly_rate, period)
+      amount * (monthly_rate/(1 - (1 + monthly_rate)**(-period)))
+    end
+
+    def calculate_total_fees
+      self.fees + (self.loan_amount * points/100)
+    end
+
+    # solves APR
+    # [a (1 + a)^N] / [(1 + a)^N - 1] - P/C = 0
+    # where a = APR/1200, N = period, P = monthly payment, C = loan_amount
+    # calculate APR uses the Newton-Raphson to find the root (the value for 'a' that makes f(a) = 0)
+    def calculate_apr
+      payment_ratio = monthly_payment_with_fees / loan_amount
+      f = lambda {|k| (k**(self.period + 1) - (k**self.period * (payment_ratio + 1)) + payment_ratio)}
+      f_deriv = lambda { |k| ((self.period + 1) * k**self.period) - (self.period * (payment_ratio + 1) * k**(self.period - 1))}
+
+      root = newton_raphson(f, f_deriv, monthly_interest_rate + 1)
+      100 * 12 * (root - 1).to_f
+    end
+
+    # if 'start' is the monthly_interest_rate, Newton Raphson will find the apr root very quickly
+    # k1 = k0 - f(k0)/f'(k0)
+    # k_plus_one = k - f(k)/f_deriv(k)
+    # We find the k-intercept of the tangent line at point k_plus_one and compare k to k_plus_one.
+    # This is repeated until a sufficiently accurate value is reached, which can be specified with the 'precision' parameter
+    def newton_raphson(f, f_deriv, start, precision = 5)
+      k_plus_one = start
+      k = 0.0
+
+      while ((k - 1) * 10**precision).to_f.floor !=  ((k_plus_one - 1) * 10**precision).to_f.floor
+        k = k_plus_one
+        k_plus_one = k - f.call(k) / f_deriv.call(k)
+      end
+      k_plus_one
+    end
+  end
+end

data/lib/mortgage_calc.rb

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+$:.unshift(File.dirname(__FILE__)) unless $:.include?(File.dirname(__FILE__)) || $:.include?(File.expand_path(File.dirname(__FILE__)))
+require 'yaml'
+
+module MortgageCalc
+  version = YAML.load_file(File.dirname(__FILE__) + "/../Version.yml")
+  VERSION = "#{version[:major]}.#{version[:minor]}.#{version[:patch]}"
+end
+
+require 'mortgage_calc/mortgage_util'

data/mortgage_calculations.gemspec

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+# -*- encoding: utf-8 -*-
+
+Gem::Specification.new do |s|
+  s.name = %q{mortgage_calculations}
+  s.version = "0.1.9"
+
+  s.required_rubygems_version = Gem::Requirement.new(">= 1.2") if s.respond_to? :required_rubygems_version=
+  s.authors = ["Perry Hertler"]
+  s.date = %q{2010-11-20}
+  s.description = %q{Utilities for Mortgage related calculations (APR and Monthly Payments)}
+  s.email = %q{perry@hertler.org}
+  s.extra_rdoc_files = ["README.rdoc", "lib/mortgage_calc.rb", "lib/mortgage_calc/mortgage_util.rb"]
+  s.files = ["Manifest", "README.rdoc", "Rakefile", "Version.yml", "features/apr.feature", "features/step_definitions/apr_steps.rb", "features/support/env.rb", "lib/mortgage_calc.rb", "lib/mortgage_calc/mortgage_util.rb", "mortgage_calculations.gemspec", "spec/mortgage_calc/mortgage_util_spec.rb", "spec/spec_helper.rb"]
+  s.homepage = %q{http://www.pathf.com/blogs/2010/02/mortcalc-gem/}
+  s.rdoc_options = ["--line-numbers", "--inline-source", "--title", "Mortgage_calculations", "--main", "README.rdoc"]
+  s.require_paths = ["lib"]
+  s.rubyforge_project = %q{mortgage_calculations}
+  s.rubygems_version = %q{1.3.7}
+  s.summary = %q{Utilities for Mortgage related calculations (APR and Monthly Payments)}
+
+  if s.respond_to? :specification_version then
+    current_version = Gem::Specification::CURRENT_SPECIFICATION_VERSION
+    s.specification_version = 3
+
+    if Gem::Version.new(Gem::VERSION) >= Gem::Version.new('1.2.0') then
+      s.add_development_dependency(%q<rspec>, [">= 1.3.1"])
+    else
+      s.add_dependency(%q<rspec>, [">= 1.3.1"])
+    end
+  else
+    s.add_dependency(%q<rspec>, [">= 1.3.1"])
+  end
+end

data/spec/mortgage_calc/mortgage_util_spec.rb

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+require File.dirname(__FILE__) + '/../spec_helper'
+module MortgageCalc
+  describe MortgageUtil do
+    def assert_monthly_apr_payment_matches(loan_amount, rate, period, fee, points)
+      mortgage_util = MortgageUtil.new(loan_amount, rate, period, fee, points)
+      monthly_payment_with_fees = mortgage_util.monthly_payment_with_fees
+      monthly_payment_from_apr = MortgageUtil.new(loan_amount, mortgage_util.apr, period, 0, 0).monthly_payment
+      monthly_payment_with_fees.should be_close(monthly_payment_from_apr, 0.01)
+    end
+
+    context "with valid MortgageUtil" do
+      before(:all) do
+        @mortgage_util = MortgageUtil.new(100000, 6.0, 360, 1200, 1.25)
+        @mortgage_util_with_apr_as_rate = MortgageUtil.new(100000, @mortgage_util.apr, 360, 1200, 1.25)
+      end
+      it "should have proper monthly interest rate" do
+        @mortgage_util.send(:monthly_interest_rate).should == 0.005
+      end
+      it "should have proper monthly payment" do
+        @mortgage_util.monthly_payment.should be_close(599.55, 0.001)
+      end
+      it "should have proper total fees" do
+        @mortgage_util.total_fees.should be_close(2450, 0.001)
+      end
+      it "should have proper APR" do
+        @mortgage_util.apr.should be_close(6.22726, 0.00001)
+      end
+    end
+    it "should calculate original monthly payment from APR" do
+      assert_monthly_apr_payment_matches(300000, 6.5, 360, 1200, 1.25)
+      assert_monthly_apr_payment_matches(300000, 6.5, 360, 0, 0)
+      assert_monthly_apr_payment_matches(400000, 1.1, 180, 1200, 1.25)
+      assert_monthly_apr_payment_matches(300000, 6.5, 360, 0, 7.25)
+      assert_monthly_apr_payment_matches(300000, 6.5, 360, 10000, 7.25)
+    end
+  end
+
+#  context "with very small loan amount" do
+#    it "should calculate proper apr when loan_amount is very small" do
+#      @mortgage_util = MortgageUtil.new(5000, 6.0, 360, 1200, 1.25)
+#      puts "@mortgage_util.apr = #{@mortgage_util.apr}"
+#    end
+#  end
+
+  # APR calculations from following web site are assumed to be accurate:
+  # http://www.debtconsolidationcare.com/calculator/apr.html
+  context "test apr calculation" do
+    it "should calculate proper apr" do
+      @mortgage_util = MortgageUtil.new(125000, 6.5, 360, 5000, 0)
+      @mortgage_util.apr.should be_close 6.881, 0.001
+    end
+    it "should calculate apr < interest_rate properly" do
+      @mortgage_util = MortgageUtil.new(125000, 6.5, 360, -5000, 0)
+      @mortgage_util.apr.should be_close 6.112, 0.001
+    end
+  end
+
+  context "net negative fees" do
+     before(:all) do
+      @mortgage_util =  MortgageUtil.new(100000, 6.0, 360, 1200, -11.25)
+      @mortgage_util.total_fees.should eql -10050.0
+    end
+    it "calculate total fees should return actual total fees is less than 0" do
+       @mortgage_util.send(:calculate_total_fees).should eql -10050.0
+    end
+    it "total fees should return 0 if total fees is less than 0" do
+       @mortgage_util.total_fees(false).should eql 0
+    end
+      it "total fees should return actual fees if negative parameter is true" do
+       @mortgage_util.total_fees(true).should eql -10050.0
+    end
+    it "should not return APR less than interest rate" do
+      @mortgage_util.apr.should be_close 5.04043, 0.00001
+    end
+  end
+
+  context "initialize convert to best types" do
+    before(:all) do
+      @mortgage_util =  MortgageUtil.new('100000', '6.0', 360, 1200, '-1.25')
+    end
+    it "should convert rate to float if necessary" do
+      @mortgage_util.interest_rate.class.should == Float
+    end
+    it "should convert points to float if necessary" do
+      @mortgage_util.points.class.should == Float
+    end
+    it "should convert loan_amount to float if necessary" do
+      @mortgage_util.loan_amount.class.should == Float
+    end
+    it "should convert period to integer if necessary" do
+      @mortgage_util.period.class.should == Fixnum
+    end
+  end
+end

data/spec/spec_helper.rb

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+$LOAD_PATH << File.join(File.dirname(__FILE__),"..","lib")
+require 'spec'
+require 'mortgage_calc'

metadata

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+--- !ruby/object:Gem::Specification 
+name: mortgage_calculations
+version: !ruby/object:Gem::Version 
+  hash: 9
+  prerelease: false
+  segments: 
+  - 0
+  - 1
+  - 9
+  version: 0.1.9
+platform: ruby
+authors: 
+- Perry Hertler
+autorequire: 
+bindir: bin
+cert_chain: []
+
+date: 2010-11-20 00:00:00 -06:00
+default_executable: 
+dependencies: 
+- !ruby/object:Gem::Dependency 
+  name: rspec
+  prerelease: false
+  requirement: &id001 !ruby/object:Gem::Requirement 
+    none: false
+    requirements: 
+    - - ">="
+      - !ruby/object:Gem::Version 
+        hash: 25
+        segments: 
+        - 1
+        - 3
+        - 1
+        version: 1.3.1
+  type: :development
+  version_requirements: *id001
+description: Utilities for Mortgage related calculations (APR and Monthly Payments)
+email: perry@hertler.org
+executables: []
+
+extensions: []
+
+extra_rdoc_files: 
+- README.rdoc
+- lib/mortgage_calc.rb
+- lib/mortgage_calc/mortgage_util.rb
+files: 
+- Manifest
+- README.rdoc
+- Rakefile
+- Version.yml
+- features/apr.feature
+- features/step_definitions/apr_steps.rb
+- features/support/env.rb
+- lib/mortgage_calc.rb
+- lib/mortgage_calc/mortgage_util.rb
+- mortgage_calculations.gemspec
+- spec/mortgage_calc/mortgage_util_spec.rb
+- spec/spec_helper.rb
+has_rdoc: true
+homepage: http://www.pathf.com/blogs/2010/02/mortcalc-gem/
+licenses: []
+
+post_install_message: 
+rdoc_options: 
+- --line-numbers
+- --inline-source
+- --title
+- Mortgage_calculations
+- --main
+- README.rdoc
+require_paths: 
+- lib
+required_ruby_version: !ruby/object:Gem::Requirement 
+  none: false
+  requirements: 
+  - - ">="
+    - !ruby/object:Gem::Version 
+      hash: 3
+      segments: 
+      - 0
+      version: "0"
+required_rubygems_version: !ruby/object:Gem::Requirement 
+  none: false
+  requirements: 
+  - - ">="
+    - !ruby/object:Gem::Version 
+      hash: 11
+      segments: 
+      - 1
+      - 2
+      version: "1.2"
+requirements: []
+
+rubyforge_project: mortgage_calculations
+rubygems_version: 1.3.7
+signing_key: 
+specification_version: 3
+summary: Utilities for Mortgage related calculations (APR and Monthly Payments)
+test_files: []
+