canehdien
asked on
Factor Payment Help
User enters:
Total invoice to be factored: __________
Pay twice a month Day1: ___ Day2: ____
OR
Pay once a month Day: ___
First Payment from Client Due: __ __ __
Total number of payments: ____
Amount of each Payment: _____
I need to know:
50% factor payment up front: _____
Less EAS Factor Fee: ______ (interest rate 3.33% monthly)
Transfer amount: ____ (50% factor payment minus the EAS Factor fee)
Total invoice to be factored: __________
Pay twice a month Day1: ___ Day2: ____
OR
Pay once a month Day: ___
First Payment from Client Due: __ __ __
Total number of payments: ____
Amount of each Payment: _____
I need to know:
50% factor payment up front: _____
Less EAS Factor Fee: ______ (interest rate 3.33% monthly)
Transfer amount: ____ (50% factor payment minus the EAS Factor fee)
ASKER
(1) - yes, amount owed by client
(2) - interest is based on the unpaid amount - compunded monthly
(3) -
$2000 invoice to factor
Clients pays $250 x 8 months= $2000
Amount to be Factor 50%=$1000
Schedule of Payments and Interest:
Month Monthly Payment Remaining Amount Owed Principal Paid Interest Paid Cumulative Interest Paid
0 0 883 0 0 0
1 125 783 99 26 26
2 125 681 102 23 50
3 125 576 105 20 70
4 125 467 108 17 87
5 125 355 111 14 101
6 125 240 115 10 112
7 125 122 118 7 119
8 125 0 122 3 123
1000 880 120 2000
(2) - interest is based on the unpaid amount - compunded monthly
(3) -
$2000 invoice to factor
Clients pays $250 x 8 months= $2000
Amount to be Factor 50%=$1000
Schedule of Payments and Interest:
Month Monthly Payment Remaining Amount Owed Principal Paid Interest Paid Cumulative Interest Paid
0 0 883 0 0 0
1 125 783 99 26 26
2 125 681 102 23 50
3 125 576 105 20 70
4 125 467 108 17 87
5 125 355 111 14 101
6 125 240 115 10 112
7 125 122 118 7 119
8 125 0 122 3 123
1000 880 120 2000
I am not understanding the problem. Is this it?
Client owes $2000 but since he pays $1000 up front he infact now owes $1000, he wants to pay $125 each month for 8 payments (since he now owes only $1000 the payments are $125). However because of interest he must pay down a little more than $1000 so that after his 8 payments all will have been payed exactly . In this case he must come up with another $117 so he owes $883 at the beginning of the first month.
The question becomes how much he actually owe at the begining of the payments for his declared schedule of payments to exactly cover the whole amount + the interest.
Client owes $2000 but since he pays $1000 up front he infact now owes $1000, he wants to pay $125 each month for 8 payments (since he now owes only $1000 the payments are $125). However because of interest he must pay down a little more than $1000 so that after his 8 payments all will have been payed exactly . In this case he must come up with another $117 so he owes $883 at the beginning of the first month.
The question becomes how much he actually owe at the begining of the payments for his declared schedule of payments to exactly cover the whole amount + the interest.
If you pay Payment each month for n months then for this to exactly match Total when paying 3.33% interest monthly the formula for Total is
Total = Payment*(1.0333^(n +1) - 1 )/( 1.033*(1.033-1) )
so for n = 8 and Payment = 125 the initial amount owed is $935.4001 which does not corresspond with your $883, .... Hmm? Looking at your table I get the first month's interest as $29.4
Anyway this will get the ball rolling on this post.
GfW
Total = Payment*(1.0333^(n +1) - 1 )/( 1.033*(1.033-1) )
so for n = 8 and Payment = 125 the initial amount owed is $935.4001 which does not corresspond with your $883, .... Hmm? Looking at your table I get the first month's interest as $29.4
Anyway this will get the ball rolling on this post.
GfW
oops, few errors just above let me rework it, (I am rushing) .
the formula is
Total = Payment*(1.0333^n - 1 )/( 0.033*1.033^n )
which give an initial total amount of 865.37 fo n = 8 and Payment = 125
the formula is
Total = Payment*(1.0333^n - 1 )/( 0.033*1.033^n )
which give an initial total amount of 865.37 fo n = 8 and Payment = 125
Is this getting us some where? If so I will carry on.
I ran the following Javascript, (just put into a .htm and open it in a browser)
<script>
sp='....................'
NumWeeks=8
Pymnt=125
IntPayed=0
Ipow = Math.pow(1.0333,NumWeeks)
Total = Pymnt*(Ipow - 1 )/( 0.0333*Ipow )
document.write('Initial Total =$',Total, ' Payment=',Pymnt, ' Number of weeks=',NumWeeks,'<br>')
document.write('Month' ,sp,'Total left',sp,sp,'Interest payed<br><br>')
for (i=1;i<=8;i++){
Total=Total+0.0333*Total - Pymnt
IntPayed=IntPayed + 0.0333*Total
document.write(i,'. ',sp ,Total,sp, IntPayed,'<br>')
}
</script>
and got the following
Initial Total =$865.3736524053306 Payment=125 Number of weeks=8
Month....................T
1. ....................769.19
2. ....................669.80
3. ....................567.10
4. ....................460.99
5. ....................351.34
6. ....................238.04
7. ....................120.97
8. ....................3.3111
<script>
sp='....................'
NumWeeks=8
Pymnt=125
IntPayed=0
Ipow = Math.pow(1.0333,NumWeeks)
Total = Pymnt*(Ipow - 1 )/( 0.0333*Ipow )
document.write('Initial Total =$',Total, ' Payment=',Pymnt, ' Number of weeks=',NumWeeks,'<br>')
document.write('Month' ,sp,'Total left',sp,sp,'Interest payed<br><br>')
for (i=1;i<=8;i++){
Total=Total+0.0333*Total - Pymnt
IntPayed=IntPayed + 0.0333*Total
document.write(i,'. ',sp ,Total,sp, IntPayed,'<br>')
}
</script>
and got the following
Initial Total =$865.3736524053306 Payment=125 Number of weeks=8
Month....................T
1. ....................769.19
2. ....................669.80
3. ....................567.10
4. ....................460.99
5. ....................351.34
6. ....................238.04
7. ....................120.97
8. ....................3.3111
ASKER CERTIFIED SOLUTION
membership
This solution is only available to members.
To access this solution, you must be a member of Experts Exchange.
Sorry where I have weeks I mean months in all the above
Thanks for the points. GfW
(1)Total invoice to be factored = amount owed by client ?
(2) Is the interest is 3.33% on the amount owed, is so is this compounded monthly for monthly payments and semi-monthly for 2 payments per month
(3) I have no idea what these mean
50% factor payment up front: _____
Less EAS Factor Fee: ______ (interest rate 3.33% monthly)
Transfer amount: ____ (50% factor payment minus the EAS Factor fee)
ie what does EAS stand for.
I am not sure your problem has been described presciely enough for us Maths types. Once defined I can solve just about any actuarial problem there is.
Regards
GfW