simple financial rate function in javascript

Question

I'm looking for a simple javascript financial RATE function, and I found this one. But it seems too difficult to understand. I want to simplify this function, and I need your help. If anyone has a simplest function, please answer. (It's a excel RATE function equivalent.)

var rate = function(nper, pmt, pv, fv, type, guess) {
  if (guess == null) guess = 0.01;
  if (fv == null) fv = 0;
  if (type == null) type = 0;

  var FINANCIAL_MAX_ITERATIONS = 128;//Bet accuracy with 128
  var FINANCIAL_PRECISION = 0.0000001;//1.0e-8

  var y, y0, y1, x0, x1 = 0, f = 0, i = 0;
  var rate = guess;
  if (Math.abs(rate) < FINANCIAL_PRECISION) {
     y = pv * (1 + nper * rate) + pmt * (1 + rate * type) * nper + fv;
  } else {
     f = Math.exp(nper * Math.log(1 + rate));
     y = pv * f + pmt * (1 / rate + type) * (f - 1) + fv;
  }
  y0 = pv + pmt * nper + fv;
  y1 = pv * f + pmt * (1 / rate + type) * (f - 1) + fv;

  // find root by Newton secant method
  i = x0 = 0.0;
  x1 = rate;
  while ((Math.abs(y0 - y1) > FINANCIAL_PRECISION) && (i < FINANCIAL_MAX_ITERATIONS)) {
     rate = (y1 * x0 - y0 * x1) / (y1 - y0);
     x0 = x1;
     x1 = rate;

     if (Math.abs(rate) < FINANCIAL_PRECISION) {
        y = pv * (1 + nper * rate) + pmt * (1 + rate * type) * nper + fv;
     } else {
        f = Math.exp(nper * Math.log(1 + rate));
        y = pv * f + pmt * (1 / rate + type) * (f - 1) + fv;
     }

     y0 = y1;
     y1 = y;
     ++i;
  }
  return rate;}

Thanks!

What exactly are you trying to do? Calculate interest rate? With or without compound interest? Trying to calculate the exact amount of money to be paid over x amount of time with y debt at z interested rate, compounded? What's your goal? — Gareth Parker, Aug 22 '12 at 00:18
hi Gareth, I want to calculate interest rates, but I would like to simplify this function or find another one. — rabugento, Aug 22 '12 at 00:23
Here's some info on what's going on behind the scenes in a rate calculation: http://www.excelbanter.com/showthread.php?t=123697 — JohnLBevan, Aug 22 '12 at 00:29
Well if you explain exactly what you want to calculate, then we can find a new function for you, or write one, but as it is the excel RATE function is big and complicated because it seems to be made to answer all rate problems. If you were specific, maybe we could find a simpler function — Gareth Parker, Aug 22 '12 at 00:39
Gareth, I need a excel RATE function similar written for javascript. In excel, rate function: "=RATE(NPER,PMT,PV)" — rabugento, Aug 22 '12 at 00:45
@rabugento maybe you should understand the mathematics you're trying to do, first. If you don't understand the maths, how are you supposed to create, test or use the relevant javascript? — Hamish, Aug 22 '12 at 00:47

score 3 · Accepted Answer · answered Aug 22 '12 at 00:37

The math is too complicated for me to understand, but this might be easier for you to read. Some of the variables have been renamed to make more sense, and it's formatted to be easier on your eyes

function rate(paymentsPerYear, paymentAmount, presentValue, futureValue, dueEndOrBeginning, interest)
{
    //If interest, futureValue, dueEndorBeginning was not set, set now
    if (interest == null)
        interest = 0.01;

    if (futureValue == null)
        futureValue = 0;

    if (dueEndOrBeginning == null)
        dueEndOrBeginning = 0;

    var FINANCIAL_MAX_ITERATIONS = 128;//Bet accuracy with 128
    var FINANCIAL_PRECISION = 0.0000001;//1.0e-8

    var y, y0, y1, x0, x1 = 0, f = 0, i = 0;
    var rate = interest;
    if (Math.abs(rate) < FINANCIAL_PRECISION)
    {
        y = presentValue * (1 + paymentsPerYear * rate) + paymentAmount * (1 + rate * dueEndOrBeginning) * paymentsPerYear + futureValue;
    }
    else
    {
        f = Math.exp(paymentsPerYear * Math.log(1 + rate));
        y = presentValue * f + paymentAmount * (1 / rate + dueEndOrBeginning) * (f - 1) + futureValue;
    }
    y0 = presentValue + paymentAmount * paymentsPerYear + futureValue;
    y1 = presentValue * f + paymentAmount * (1 / rate + dueEndOrBeginning) * (f - 1) + futureValue;

    // find root by Newton secant method
    i = x0 = 0.0;
    x1 = rate;
    while ((Math.abs(y0 - y1) > FINANCIAL_PRECISION)
        && (i < FINANCIAL_MAX_ITERATIONS))
    {
        rate = (y1 * x0 - y0 * x1) / (y1 - y0);
        x0 = x1;
        x1 = rate;

        if (Math.abs(rate) < FINANCIAL_PRECISION)
        {
            y = presentValue * (1 + paymentsPerYear * rate) + paymentAmount * (1 + rate * dueEndOrBeginning) * paymentsPerYear + futureValue;
        }
        else
        {
            f = Math.exp(paymentsPerYear * Math.log(1 + rate));
            y = presentValue * f + paymentAmount * (1 / rate + dueEndOrBeginning) * (f - 1) + futureValue;
        }

        y0 = y1;
        y1 = y;
        ++i;
    }
    return rate;
}

thanks Gareth, I'm trying to understand better this function. thanks for your support! — rabugento, Aug 22 '12 at 00:54

simple financial rate function in javascript

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