Irregular Payments - account for a regular series of irregular cash flows
In the real world, all series of payments or withdrawals aren’t that regular. TValue is able to account for that fact with what are called Special Series. The nine different series options give you the ability to create what can be described as a regular series of irregular cash flows – whether they be payments, investments, what have you.
- Enter the cash flow information as shown below. Note that the Amount field on the Payment Event (line 2) is Unknown. This will setup the loan with a regular series of payments that occur at regular intervals for the same amount.
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- Press [F9], [Ctrl]+[U], or click Calculate from the Compute group to compute the amount of the payments. The calculated monthly Payment Amount is 438.71.
- There are 3 ways to access the Special Series options: click Special Series from the Detail group, press [F2] in the Amount field, or right-click in the Amount field and choose Special Series from the context menu. The Special Series drop-down menu appears as shown below. You select the type of series you wish to generate by clicking on the appropriate option.
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- Normal This is the most common type of payment that you would see in most consumer loan situations. The payments in a Normal series are applied first towards any outstanding interest balance then the remainder is applied to reducing the principal balance.
Result: Our example defaults to Normal as indicated by the check next to this option in the image above. The bottom of the amortization schedule report is shown below - you can see the regular series of payments that occur at regular intervals for the same amount.** SCREEN SHOT HERE **
- Amount Step This option generates a series of cash flows that increase or decrease by a fixed dollar amount after a specified number of payments.
Enter the Amount Step Special Series information as shown below.** SCREEN SHOR HERE **
Result: Choosing this option in our example changes the amortization schedule report as shown below - you can see the series of 6 payments at one amount and then the next 6 payments $100 more throughout the term of the loan..** SCREEN SHOT HERE **
- Percent Step This option generates a series of cash flows that increase or decrease by a fixed % after a specified number of payments. The percent step series is great for factoring an inflation factor into a series of payments for example.
Enter the Percent Step Special Series information as shown below.** SCREEN SHOT HERE **
Result: Choosing this option in our example changes the amortization schedule report as shown below - you can see the series of 6 payments at one rate and then the next 6 payments factored by the percent increase throughout the term of the loan.** SCREEN SHOT HERE **
- Interest Only This option generates a series of cash flows equal to the amount of interest that has accrued since the last event.
Choosing this option changes the cash flow window as shown below.** SCREEN SHOT HERE **
Result: Choosing this option in our example and then choosing Balloon in the Rounding dialog changes the amortization schedule report as shown below - you can see the series of regular payments of 41.67 applied to Interest Only.** SCREEN SHOT HERE **
- Fixed Principal Plus Interest This option generates a series of cash flows with a fixed amount applied to principal plus a calculated amount of interest to cover the accrued interest since the last event.
Change the Principal payment amount to Unknown as shown below.** SCREEN SHOT HERE **
Result: Choosing this option in our example calculates the Principal payment amount to 416.67 as shown below - you can see the series of regular Principal payments and the effect on the Payment and Interest amounts.** SCREEN SHOT HERE **
- Skip Series This option generates a series of cash flows with payments that are regularly skipped for intervals other than monthly.
Enter the Skip Series Special Series information as shown below.** SCREEN SHOT HERE **
Result: Choosing this option in our example calculates the Payment amount to 656.65 as shown below - you can see the series of 6 payments with a Payment amount of 656.65 and then 4 payments with a Payment amount of 0.00.** SCREEN SHOT HERE **
- Monthly Skip This option generates a series of monthly cash flows wherein certain months are regularly skipped throughout all or part of the term.
Enter the Monthly Skip Special Series information as shown below.** SCREEN SHOT HERE **
Result: Choosing this option in our example and choosing Last Payment in the Rounding dialog to account for the 25.97 rounding amount generates the amortization schedule report as shown below - you can see the payments for January and July with a Payment amount of 0.00 and all other payments except for the last one with a Payment amount of 525.00 as entered.** SCREEN SHOT HERE **
- Existing Fixed This option is related to the Fixed Principal Plus Interest series in that it can be used to value an existing stream of fixed principal plus interest amounts.
- Principal First This option is used to generate cash flows that are applied first towards principal even though there may be outstanding interest. In order to generate principal first payments, TValue needs to be in the Simple Interest compute mode. This allows TValue to accumulate the unpaid interest separately as payments are made toward the principal balance.
Change the Total payment amount to Unknown as shown below.** SCREEN SHOT HERE **
Result: Choosing this option in our example calculates the Payment amount to 437.39 as shown below - you can see this is the Principal amount as well with Interest accruing until the Principal is paid off as seen on payment line 23 below where Interest begins to be paid.** SCREEN SHOT HERE **
- Normal This is the most common type of payment that you would see in most consumer loan situations. The payments in a Normal series are applied first towards any outstanding interest balance then the remainder is applied to reducing the principal balance.