Merge pull request #1 from randallreedjr/add-interest-rate

Add ability to calculate interest rate

CHANGELOG.md

@@ -0,0 +1,12 @@
+# Changelog
+
+## 0.1.0
+
+* 1 minor enhancement
+  * Update docs, add License and Changelog
+* 2 major enhancement:
+  * Add ability to calculate interest rate (I)
+
+## 0.1.0
+
+Initial project; ability to calculate present value (PV), payments (PMT), future value (FV), and number of periods (N) given other values

LICENSE

@@ -0,0 +1,23 @@
+LICENSE
+
+The MIT License
+
+Copyright (c) 2014-2016 Randall Reed, Jr.
+
+Permission is hereby granted, free of charge, to any person obtaining a copy
+of this software and associated documentation files (the "Software"), to deal
+in the Software without restriction, including without limitation the rights
+to use, copy, modify, merge, publish, distribute, sublicense, and/or sell
+copies of the Software, and to permit persons to whom the Software is
+furnished to do so, subject to the following conditions:
+
+The above copyright notice and this permission notice shall be included in
+all copies or substantial portions of the Software.
+
+THE SOFTWARE IS PROVIDED "AS IS", WITHOUT WARRANTY OF ANY KIND, EXPRESS OR
+IMPLIED, INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF MERCHANTABILITY,
+FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT. IN NO EVENT SHALL THE
+AUTHORS OR COPYRIGHT HOLDERS BE LIABLE FOR ANY CLAIM, DAMAGES OR OTHER
+LIABILITY, WHETHER IN AN ACTION OF CONTRACT, TORT OR OTHERWISE, ARISING FROM,
+OUT OF OR IN CONNECTION WITH THE SOFTWARE OR THE USE OR OTHER DEALINGS IN
+THE SOFTWARE.

README.md

@@ -1,25 +1,34 @@
-Time Value of Money calculator
+# Time Value of Money calculator
 
-Performs financial calculatins for:
--n (number of periods)
--pv (present value)
--pmt (payment amount)
--fv (future value)
+## Performs financial calculations for:
+* n (number of periods)
+* pv (present value)
+* pmt (payment amount)
+* fv (future value)
+* i (interest rate)
 
-Does not currently solve for interest rate. Only supports annuity due.
+**NOTE:** Only supports annuity due.
+
+## Usage
 
-Usage
 Initialize with values:
-    time_value = TimeValue.new(n, i, pv, pmt, fv)
+```
+time_value = TimeValue.new(n, i, pv, pmt, fv)
+```
+
 Or set values after initialization:
-    time_value = TimeValue.new()
-    time_value.n = my_n
-    time_value.i = my_i
-    time_value.pv = my_pv
-    time_value.pmt = my_pmt
-    my_fv = time_value.calc_fv()
+```
+time_value = TimeValue.new()
+time_value.n = my_n
+time_value.i = my_i
+time_value.pv = my_pv
+time_value.pmt = my_pmt
+my_fv = time_value.calc_fv()
+```
 
 Remember to follow a convention for signs of values:
--Money being paid should have a negative value (-)
--Money being received should have a positive value (+)
+
+* Money being paid should have a negative value (-)
+* Money being received should have a positive value (+)
+
 Failing to follow this convention may yield unexpected results

config/environment.rb

@@ -1,3 +1,4 @@
-require_relative '../lib/timevalue.rb'
+require_relative '../lib/time_value.rb'
+require_relative '../lib/solver.rb'
 require 'rspec'
-require_relative '../spec/spec_helper.rb'
+require_relative '../spec/spec_helper.rb'

lib/solver.rb

@@ -0,0 +1,42 @@
+class Solver
+  attr_reader :time_value, :goal
+  attr_accessor :guess, :lower_bound, :upper_bound, :upper_cap_met
+
+  def initialize(time_value, guess = 10.00, lower_bound = 0.00, upper_bound = 10.00)
+    @upper_bound = upper_bound
+    @lower_bound = lower_bound
+    @guess = guess
+    @time_value = time_value
+    @goal = time_value.fv
+    @upper_cap_met = false
+  end
+
+  def solve!
+    iteration_count = 0
+    time_value.i = guess
+    while (upper_bound - lower_bound).round(2) > 0.01 && iteration_count < 100
+      iteration_count += 1
+      begin
+        result = time_value.calc_fv
+      rescue FloatDomainError => error
+        return nil
+      end
+      adjust_bounds(result)
+      time_value.i = guess
+    end
+    guess if iteration_count < 100
+  end
+
+  def adjust_bounds(result)
+    if result > goal
+      # interest rate too high
+      self.upper_cap_met = true
+      self.upper_bound = guess
+    elsif result < goal
+      # interest rate too low
+      self.upper_bound *= 2 unless upper_cap_met
+      self.lower_bound = guess
+    end
+    self.guess = ((upper_bound + lower_bound) / 2).round(2)
+  end
+end

lib/timevalue.rb → lib/time_value.rb

@@ -1,3 +1,6 @@
+require 'byebug'
+require 'solver'
+
 class TimeValue
 
     attr_accessor :n, :i, :pv, :pmt, :fv
@@ -43,4 +46,9 @@ def calc_pmt()
         @pmt = (-i*(@fv+(@pv*((1+i)**n))))/(((1+i)**n)-1)
         @pmt = (@pmt*100).round / 100.0
     end
+
+    def calc_i(guess = 10.0)
+      solver = Solver.new(self, 10.00, 0.00, 10.00)
+      solver.solve!
+    end
 end

spec/timevalue_spec.rb → spec/time_value_spec.rb

@@ -43,4 +43,31 @@
     time_value.pmt = -100
     expect(time_value.calc_fv).to eq(149_217.62)
   end
-end
+
+  it 'should calculate interest correctly when higher than guess' do
+    time_value.pv = -100_000
+    time_value.pmt = -1000.0
+    time_value.n = 20
+    time_value.fv = 1_113_330
+    guess = 10.00
+    expect(time_value.calc_i(guess)).to eq(12.41)
+  end
+
+  it 'should calculate interest correctly when lower than guess' do
+    time_value.pv = -100_000
+    time_value.pmt = 0.00
+    time_value.n = 20
+    time_value.fv = 500_000
+    guess = 10.00
+    expect(time_value.calc_i(guess)).to eq(8.38)
+  end
+
+  it 'should return an error if inputs are incorrect' do
+    time_value.pv = 100_000
+    time_value.pmt = 0
+    time_value.n = 20
+    time_value.fv = 500_000
+    guess = 10.00
+    expect(time_value.calc_i(guess)).to eq(nil)
+  end
+end

time_value.gemspec

@@ -0,0 +1,13 @@
+Gem::Specification.new do |s|
+	s.name				= 'time_value'
+	s.version			= '0.1.0'
+	s.date				= '2016-03-27'
+	s.summary			= "Time value of money financial calculations"
+	s.description = "Perform time value of money calculations using financial calculator variables n, i, PV, PMT, and FV"
+	s.authors 		= ["Randall Reed, Jr."]
+	s.email 			= 'randallreedjr@gmail.com'
+  s.add_development_dependency "rspec", '~> 3.2'
+  s.files       = Dir.glob("{bin,lib}/**/*") + %w(LICENSE README.md CHANGELOG.md)
+	s.homepage 		= 'http://rubygems.org/gems/timevalue'
+	s.license 		= 'MIT'
+end