Hello everyone,
This is a tad off-topic, but I'm at my wits end. I'm working on a loan
calculator for our load advisors to give an estimated monthly payment. We
had one, but it was really bad (gave horribly wrong information) and I've had
to re-write it. The particular question about this loan calculator is on a
graduated repayment type. This is where the loan pretty much starts off
paying only interest and then increases the payments by a certain percentage
(graduation factor) every time the rate increase is supposed to happen
(graduation term) which is usually two years.
I've looked all over google, wikipedia, and I've even called our servicers
(who you'd think would help you out, but instead they just tell you they
can't give me those calculations). I have found a few other calculators
online that do this sort of thing, but I can't exactly see the source code
that way ;)
This seems like a somewhat standard calculation for loans and interest bearing
accounts. Does anyone know how to calculate the graduation factor? I've been
able to figure out it's based off the loan term, loan balance, and initial
interest rate.
Example:
$30,000 balance
6% initial interest rate
20 year loan term
with those variables you would get a graduation factor of 6.95%
So, the first payment would be $166.53, and then after the graduation term (2
years) the payment would increase to $178.10, then two years later increase
again, and so on. That differnce in payment is pretty close to the
graduation factor. It's probably off due to the rounding.
Thanks for placating me when grasping for straws ;)

Take a look at which
documents the loan amortisation program which I wrote in PHP. You can run it
online and even download the source code to run it locally.