# LOTUS - LOANS22.ZIP - LOANS21.DOC

LOANS21.DOC **

The spreadsheets in this archive (distributed as LOANS21.ARC) solve the

financial calculation problems created by loans (mortgages, etc.) which

involve "odd days" in the payment calculations. Have you ever wondered

why none of the answers on your PC match your exact mortgage payment?

Perhaps your loan was issued based upon the circumstances of the closing,

but payments were prescheduled for the 15th of each month. Then the

first period would include "odd days" and you may have been unable to

confirm the mortgage math using conventional financial calculators.

Simply start at the top of the spreadsheet, fill in the unprotected

cells, and PgDn for summary information. The correct payments are

calculated where the "odd days" are figured by both compound and

simple interest (older mortgages probably used the simple interest

odd days method).

Frequently, a loan is issued on a certain day and the first payment date

is not exactly one loan period. Therefore, an "odd days" calculation is

required to arrive at the correct payment amount. The HP-12C financial

calculator handles this well; PC financial calculation programs rarely

do.

The enclosed spreadsheets are for use with Lotus 1-2-3 (2.01), Quattro (1.0),

FrameWork III (1.0), or Lucid 3-D (1.22). Be forewarned, however, that

LUCID 3-D still contains bugs in the INT() function and may indicate an

error condition were none exists (for example, INT(31.1) yields "ERR" in-

stead of "31").

By the way, actual bank interest is recalculated based upon the actual

payment dates and the actual length of each period (which may, for example,

vary due to the length of the month) and may account for an irregular final

payment. Nevertheless, in calculating the planned payments for a fixed

payment term loan agreement, the figures presented by these spreadsheets

should accurately reflect the figures generated by any reputable bank.

Todd Natkin, Attorney

(202) 331-0094 Voice

(202) 887-5068 FAX

EOF - LOANS21.DOC