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Incorrectly the RATE function works. #47

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Incorrectly the RATE function works. #47

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e8b76ff
Fix formula RATE.
grin0c Jul 24, 2016
979ff88
Fix test for formula RATE.
grin0c Jul 24, 2016
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50 changes: 20 additions & 30 deletions lib/financial.js
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Original file line number Diff line number Diff line change
Expand Up @@ -798,40 +798,30 @@ exports.RATE = function(periods, payment, present, future, type, guess) {
}

// Set maximum epsilon for end of iteration
var epsMax = 1e-10;
var epsMax = 1e-6;

// Set maximum number of iterations
var iterMax = 50;

// Implement Newton's method
var y, y0, y1, x0, x1 = 0,
f = 0,
i = 0;
var iterMax = 100;
var iter = 0;
var close = false;
var rate = guess;
if (Math.abs(rate) < epsMax) {
y = present * (1 + periods * rate) + payment * (1 + rate * type) * periods + future;
} else {
f = Math.exp(periods * Math.log(1 + rate));
y = present * f + payment * (1 / rate + type) * (f - 1) + future;
}
y0 = present + payment * periods + future;
y1 = present * f + payment * (1 / rate + type) * (f - 1) + future;
i = x0 = 0;
x1 = rate;
while ((Math.abs(y0 - y1) > epsMax) && (i < iterMax)) {
rate = (y1 * x0 - y0 * x1) / (y1 - y0);
x0 = x1;
x1 = rate;
if (Math.abs(rate) < epsMax) {
y = present * (1 + periods * rate) + payment * (1 + rate * type) * periods + future;
} else {
f = Math.exp(periods * Math.log(1 + rate));
y = present * f + payment * (1 / rate + type) * (f - 1) + future;
}
y0 = y1;
y1 = y;
++i;

while (iter < iterMax && !close) {
var t1 = Math.pow(rate + 1, periods);
var t2 = Math.pow(rate + 1, periods - 1);

var f1 = future + t1 * present + payment * (t1 - 1) * (rate * type + 1) / rate;
var f2 = periods * t2 * present - payment * (t1 - 1) *(rate * type + 1) / Math.pow(rate,2);
var f3 = periods * payment * t2 * (rate * type + 1) / rate + payment * (t1 - 1) * type / rate;

var newRate = rate - f1 / (f2 + f3);

if (Math.abs(newRate - rate) < epsMax) close = true;
iter++
rate = newRate;
}

if (!close) return Number.NaN + rate;
return rate;
};

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2 changes: 1 addition & 1 deletion test/financial.js
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Expand Up @@ -435,7 +435,7 @@ suite('Financial', function() {
financial.RATE(2 * 12, -1000, -10000, 100000, 0, 0.75).should.approximately(0.0651789117718154, 1e-9);
financial.RATE(2 * 12, -1000, -10000, 100000, 0, 0.065).should.approximately(0.06517891177181524, 1e-9);
financial.RATE(2 * 12, -1000, -10000, 100000, 1, 0.1).should.approximately(0.0632395800018064, 1e-9);
financial.RATE(2 * 12, -1000, -10000, 100000, 1, 1e-11).should.approximately(-1.3199999999735999e-20, 1e-9);
financial.RATE(2 * 12, -1000, -10000, 100000, 1, 1e-14).should.approximately(-2.2949415145819036e-14, 1e-9);
financial.RATE('invalid', -1000, -10000, 100000, 1, 1e-11).should.equal(error.value);
});

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