AFFORD IT??? Help File INDX Index: ABCO About Interest and Compounding ABLO About Loans and Loan Calculation AMME Amortization Menu CHPR Change Printout CHPA Changing Parameters DAEN Data Entry DEFI Definitions DEME Depreciation Menu ERME Error Messages FUKE Function, Alt, Ctrl KEYS, & DOS GRME Growth Menu METR Menu Tree MISC Miscellaneous OPME Options Menu POCA Pocket Calculator TRAC Tracker Menu & Uses ABCO Section 1: ABOUT INTEREST AND COMPOUNDING ------------------------------------------ Interest on invested money can be compounded in a variety of ways. Quarterly compounding (4 times per year) is quite common throughout the business world. Because there is no one standard time interval to use in compounding, a normalization technique is often employed. When all is said and done, normalization makes it possible to compare values because they are on equal turf. The effective annual percentage rate (APR) is this normalized value. It takes into mind the frequency of compounding within that system. Imagine trying to determine the best value for your money between accounts at 5.6% compounded daily, 6.1 % compounded quarterly, and 6.99% compounded annually. Often a person will see two interest rates given for an account -- the simple rate (i.e. 7.0% compounded quarterly) and the effective APR (i.e. 7.1859%). In calculations which request both the interest rate and the frequency of compounding, you have two choices. If you know only the effective APR, enter it at the request for the interest rate, and type in 1 at the request for frequency of compounding. The other choice is to use the simple annual interest rate and then enter the frequency of compounding at the program's request. If you are not sure how to interpret the frequency of compounding, refer to the following table: TABLE 1 ------- Frequency of Number to enter Compounding (# of times per year) ------------ --------------------- Annually 1 Semi-annually 2 Quarterly 4 Monthly 12 Semi-monthly 24 Weekly 52 Daily 365 Let us look at a quick example calculation: Say you invest $10,000 for 10 years at an effective APR of 7.1859%. The maturity value is $20,015.97. Now say you invest the same $10,000 for 10 years at an interest rate of 7.00% per year, and you know that the frequency of compounding is quarterly (4 times per year). The maturity value is $20,015.97. ABLO Section 2: ABOUT LOANS AND LOAN CALCULATION -------------------------------------------- Loans are generally calculated through use of a variety of formulas. These formulas are usually of the variety in which all but one of the variables are plugged in, and the remaining unknown is found by solving the equation. This is the format used by this program. These formulas were determined through algebraic manipulation, deriva- tion, and integration of exponential functions. They were thoroughly researched and tested throughout the program development process. Loan calculation mode "A" (Add on installments) is probably the one which could be considered most standard. It is often referred to as normal amortization. In this mode, interest is basically paid first; principle is paid later. Loan calculation mode "E" (Equal principle reduction) is a newer method by which the principle is equally reduced every time a payment is made. This will result in a lesser amount of interest being paid over the term of the loan. Loan calculation mode "R" (Rule of 78's) is used in this program only to calculate pay-off amounts. The reason is that business commonly uses it for this purpose since it is a method of approximating interest owed vs. unearned interest on a loan. Various financial institutions will "tweak" their calculation formulas for one reason or another. Because of this fact, it is possible that the figures generated by AFFORD IT??? will not exactly match the figures generated by every financial institution. They should be quite close, but these differences along with rounding errors, evaluation of significant figures, and varying time lengths could take their toll on exactness; therefore, the following disclaimer must be made: DISCLAIMER: The calculations done by AFFORD IT??? are meant to provide very good estimates. For various reasons, the figures generated may not exactly match those from other sources. Although the material for this program was thoroughly researched before and during development, CleoSci and its authors do not claim to be experts on financial calculations. Consult qualified experts for further information. The results generated in AFFORD IT??? ARE NOT meant to be used as a legal defense, or any other type of defense, against figures provided by banks or financially related persons or institutions. AFFORD IT??? is offered/sold as is and carries with it no other warranties, expressed or implied, including, but not limited to, warranties of merchantability, fitness for a purpose, and so on. CleoSci and its authors shall NOT be liable for ANY type of damage caused by using AFFORD IT??? AMME Section 3: AMORTIZATION MENU ----------------------------- This menu has the following selections: Monthly Payment Pay-off Amn't Now Term of Loan Definition Principle Monthly Payment determines your payment on a hypothetical loan which will be payed in equal amounts each month for a given number of months. Term of Loan determines the number of months (and years) that a loan will last provided an equal payment is made each month to pay back a certain amount of principle. Principle determines the amount of loan which can be taken provided that an equal payment will be made each month for a given number of months. Pay-off Amn't Now determines the amount needed to pay the loan in full TODAY assuming that an equal payment has already been made each month for a given number of months. There are three calculation mode options: A for Normal Amortization, E for Equal Principle Reductions, and R for Rule of 78's. (See Section 2: About Loans and Loan Calculation for more information.) Definition simply displays on-screen the basic definition of amortiza- tion. CHPR Section 4: CHANGE PRINTOUT --------------------------- A line printer can be invoked for the main functions of AFFORD IT???. This allows for hardcopies of detailed amortization/calculation reports based upon the work you have done. The printer can be called nearly any time, but the Pocket Calculator and this help system display to screen only. Attempts to call a printer, which for some reason is unavailable for use, will generate error messages explaining the nature of the problem. Output direction will either remain unchanged, or it will be redirected to the CRT screen. AFFORD IT??? assumes the printer you will use resides on LPT1. If you have only one printer, this case is most likely true. CHPA Section 5: CHANGING PARAMETERS ------------------------------- Whenever a calculation is completed, a menu is displayed which asks you if you wish to a) Make Changes, b) Recalculate, or c) Terminate Process. Make Changes option puts you back to the first menu in which you were able to edit the entries pertaining to the particular calculation. Entries can be modified, and the new calculation can be generated by pressing Shift-Enter (hold Shift, press Enter). Recalculate will automatically change the calculation mode (if you are in amortization) and recalculate the equation using the same parameters (entries) as before. This is helpful to show the differences in payments with the two modes. Terminate Process simply returns you to the main desktop and menu. DAEN Section 6: DATA ENTRY ---------------------- Data for any of the equations can be entered by starting one of the calculation modes from the main menus (or by pressing the appropriate hot key). A limited number of digits may be entered at each numerical entry point. The number of digits allowed for each entry varies depending upon the numerical value the program is looking for in that entry (see the table at the end of this section). Each numerical entry may be edited as well, and the following keys respond to editing: Backspace Delete Down Arrow End Home Left Arrow Right Arrow Shift-Backspace Up Arrow Enter Shift-Enter Probably the only explanations needed are that a) the Shift-Backspace (hold shift down and press backspace) deletes the entire entry in one shot. In contrast, the Delete and Backspace keys remove only one digit at a time, b) Enter enters that value as an answer to that question and toggles you downward to the next question, and c) Shift-Enter accepts all entered values for all questions, closes the menu, and proceeds with calculations. An added note is that the Up/Down Arrow keys toggle you between entries. Whatever digits you had at the current entry will be retained even if you use these keys to move to the next entry. The following table shows each type of expected data entry given a question relating to that data type. Each entry can be no more than "# of digits" in size. The maximum entry listed also shows the expected format for that data type. The maximum entry for "# Pmnt's Made" always depends upon the value given in "# of Pmnt's." # of Maximum # of Maximum Data Type Digits Entry Data Type Digits Entry 컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴쩡컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴 Principle 13 10,000,000.00 � # Yr's. Withdr. 6 125.00 Future Value 14 100,000,000.00 � Deposit Amount 9 50,000.00 Rate 9 35.000000 � Deposit Freq. 3 365 # of Pmnt's 3 480 � Withdr. Freq. 3 365 Pmn't Amount 9 50,000.00 � Compound Freq. 3 365 Withdr. Am't 9 50,000.00 � Date 8 MM/DD/YY # Pmnt's Made 3 ### � Calcult'n Mode 1 A, E, R # of Years 6 125.00 � Line Number 3 480 DEFI Section 7: DEFINITIONS ----------------------- Annual Percentage Rate The normalized interest rate based on one full year. This rate takes into account all compounding during that year. Compounding The process of charging interest to itself. In other words, if an account starts with $100 and it earns 10% interest, the value of the account at the end of the period is $110 -- gain of $10. The next time interest is earned at 10%, the account gains $11 -- $10 on the original principle and $1 on the interest from the previous period. Compound Frequency The number of times within a year that interest is compounded. For example, quarterly compounding means that interest is compounded 4 times per year at equal intervals. Compound Interest The amount of interest earned as a result of compounding; interest earned on itself. Principle The full starting amount of a loan or savings deposit; the amount in an account on which interest may be calculated. Simple Interest The basic interest rate accumulated on an account. This rate DOES NOT include compounding. DEME Section 8: DEPRECIATION MENU ----------------------------- This menu has the following selections: Steady Withdrawal Am't Principle Needed How Long Money Will Last Definition Steady Withdrawal Am't computes the amount which can be regularly with- drawn from an account given a starting principle, the interest rate, the number of years for which withdrawal is desired, and the number of withdrawals per year. How Long Money Will Last computes when the money will run out provided that you have invested the money at a certain rate and that you regular- ly withdraw an amount of money from the account. Principle Needed computes the amount of money which must be invested in order to regularly withdraw a specified amount of money for a certain number of years. Definition simply displays on-screen the basic definition of deprecia- tion. ERME Section 9: ERRORS ------------------- CANNOT ACCESS HELP SYSTEM: This error has a rather lengthy message to aid you as you will not be reading this if it occurs. Basically it means that the file AFFORD.HLP is missing from the main program directory, is corrupted, or there are too many programs already being run but not terminated before the AFFORD IT??? session was started. CANNOT CREATE FILE "AFFORD.CFG": This probably means that the disk/drive on which you have your main AFFORD IT??? files is full (or nearly full). The configuration file is very small; therefore, if you can move even one data file to some other place, this error will probably go away. CANNOT READ DATA FILE: This error occurs when AFFORD IT??? cannot properly read the requested tracker data file. Be sure that the file is a valid AFFORD IT??? tracker file and that you have spec- ified the correct path to search for the file. If you have, then perhaps the file has been corrupted. If you have made a backup copy of the file on another disk somewhere, try that one. You could also try opening the .BAK file of the same first name. If this does not work, you may have to re-enter your data. If you cannot open ANY tracker file, and you are SURE they are valid tracker files, your AFFORD.EXE program may be corrupted. Contact us if you feel you cannot correct the problem yourself. CONFIGURATION FILE NOT FOUND: This error really is not serious. It simply causes the program to use default settings. If you HAVE already saved new colors, AND you get this message, the file AFFORD.CFG was probably accidently deleted or moved to a new location. Either locate the file and move it back, or reset the colors and save them again. This message will display (although you may not see it) the first time the program is run. FILE NOT AFFORD IT??? DATA FILE v2.0: the file either is not an AFFORD IT??? tracker data file, or it is a tracker file from an older version of AFFORD IT???. If you are certain the file IS a tracker file from an older version of AFFORD IT???, run the program TRKCON.EXE to convert to the new format. INFINITE DIVERSION: There is a limit to the low-end amount of a monthly payment that may be made on a given loan. Below this point means divergence to infinity -- the loan can NEVER be paid off. Generation of this error flashes a warning followed by a minimum payment amount. Edit the entry to be AT LEAST this amount. INVALID INTEGER REPRESENTATION: Integer values do not allow decimals. The number of payments made, for example, must be an integer. INVALID NUMERIC REPRESENTATION: This most likely means there are too many decimals in the numeric value (example: 4.05.2). Perhaps an alpha character made its way into the number. To correct the problem, simply edit the entry at the point of error. PRINTER ERRORS: These are identified at the time of occurrence. Check your printer to correct the problem(s). UNABLE TO LOCATE...: The named file was not found in the current directory. To avoid this problem, it is best that AFFORD IT??? and ALL of its supporting files reside in the current directory. UNRECOGNIZED "AFFORD.CFG" FILE FORMAT: This causes the program to use default settings. It is generated when it finds an older version of the AFFORD.CFG file than the program requires. You should run the program CFGCON.EXE to convert your old configuration file to the new configuration file version which will be accepted by this program. As an alternative, you could simply reset the colors yourself and answer "Y" when asked if you wish to save to file AFFORD.CFG. A new, updated file would then be created. FUKE Section 10.1: F (Function) KEYS -------------------------------- F1: Hot key to activate the "Find Monthly Payment" menu option. F2: Hot key to activate the "Pay-off Amn't Now" menu option. F3: Hot key to activate the "Track Payments" menu option. F5: This key works exactly as the ESC key. It has been left active for historical reasons. F7: Hot key to activate the "Num. of Yrs. to Maturity (One Deposit)" menu option. F8: Hot key to activate the "Maturity Value (Continuous Deposit)" menu option. F9: Hot key to activate the "Steady Withdrawal Am't" menu option. F10: Hot key to activate the help system index. Section 10.2: Alt KEYS ------------------------ Alt-F1: Hot key to activate the "Term Of Loan" menu option. Alt-F7: Hot key to activate the "Maturity Value (One Deposit)" menu option. Alt-F9: Hot key to activate the "How Long Money Will Last" menu option. Alt-C: Hot key to activate the "Pocket Calculator" menu option. Alt-I: Hot key to activate the "Convert Interest Rates" menu option. Alt-M: Hot key to activate the "Change calculation mode" menu option. Alt-N: Hot key to activate the "New operating colors" menu option. Alt-P: Hot key to activate the "Printer/Screen" menu option. Alt-Q: Hot key to activate the "Quit AFFORD IT???" menu option. Section 10.3: Ctrl KEYS ------------------------ Ctrl-F1:Hot key to activate the "Principle" menu option. Ctrl-F7:Hot key to activate the "Present Value (One Deposit)" menu option. Ctrl-F8:Hot key to activate the "Deposit Amount (Continuous Deposit)" menu option. Ctrl-F9:Hot key to activate the "Principle Needed" menu option. Section 10.4: OTHER KEYS ------------------------- ESC: Hot key to exit from the current process. The F5 key does the same thing, and it remains active for historical reasons. Section 10.5 ACCESS TO DOS -------------------------- It is possible to conveniently access the DOS Command Shell (through the "Options" menu) in order to perform various DOS commands. During this time AFFORD IT??? stays resident in memory. Typing "Exit " at the cursor will go back to the AFFORD IT??? environment providing that nothing else has been started and "left running" AFTER your temporary leave from AFFORD IT???. Care must be taken not to load up too many resident programs at one time as they will quickly consume precious RAM. If you get an error when trying to shell to DOS, you may already have too many things "running" on your system at one time. Please refer to the section on error messages for more information. GRME Section 11: GROWTH MENU ------------------------ This menu has the following selections: Num. of Yrs. to Maturity (One Deposit) Maturity Value (One Deposit) Present Value (One Deposit) Maturity Value (Continuous Deposit) Deposit Amount (Continuous Deposit) Definition Num. of Yrs. to Maturity (One Deposit) calculates the number of years it will take for an account to reach a specified value. Maturity Value (One Deposit) determines the amount of money an account will have after a certain number of years given a specified starting value. Present Value (One Deposit) determines the amount needed to deposit in an account in order for it to reach a specified value after a certain length of time. Maturity Value (Continuous Deposit) calculates the amount of money an account will have at the end of a period of time given that equal deposits are made to the account regularly. Deposit Amount (Continuous Deposit) determines the amount to be regularly deposited in order to reach a certain amount after a specified length of time. Definition simply displays on-screen the basic definition of growth. METR Section 12: MENU TREE ---------------------- � 커 Amortization Depreciation � � � About AFFORD � Monthly Payment � Steady Withdrawal Am't IT??? � Term of Loan � How Long Money Will Last � Principle � Principle Needed Help � Pay-off Amn't Now � Definition � � Definition � Index � Browse Growth Options � � � Num. of Yrs. to Maturity (1 Dep.) � Pocket Calculator � Maturity Value (One Deposit) � Convert Interest Rates � Present Value (One Deposit) � Change Calculation Mode � Maturity Value (Con't. Dep.) � New Operating Colors � Deposit Amount (Con't. Dep.) � Printer/Screen � Definition � Quit AFFORD IT??? � Access to DOS Tracker � � Create New File � Work on Existing File � Definition MISC Section 13: MISC ----------------- HIGHLIGHTED/KEY LETTERS: These letters define shortcuts. For example, to view the definition of depreciation, press the keys "Alt" and "D" at the same time. Then press "D" when you see the Depreciation menu. NEGATIVE INTEREST: It is possible (although not fully realistic) to generate negative interest on some of the tables. If this happens, it simply means that some of the figures are incorrect (or that you are extremely astute in the business sense ). An example is this: Principle: $1000.00 # of Payments: 20 Amount of Payments: $20.00 It can clearly be seen that there is no possible way the entire $1000.00 can be paid in full in 20 - $20 payments unless the lender is paying YOU interest to borrow HIS/HER money. "1.00 MIL" or "> 1 BILLION" NOTATION: In some cases where screen space is at a premium, this space saving notation has been used. In these cases, the values will be listed in a short decimal form of millions of dollars (i.e. $1.25 mil), or as greater than one billion dollars ( > $1 billion). WRONG COLORS: If the colors which come up in the AFFORD IT??? environ- ment are not as you had remembered setting them, it is possible AFFORD IT??? could not find the configuration file at start up time. AFFORD IT??? sets default colors in this case. Check to see that AFFORD.EXE and AFFORD.CFG both reside in the same directory. Also check to see if AFFORD.CFG exists at all. You may wish to reset your colors. Upon exiting the color selection process, choose "Y" when asked to save values to AFFORD.CFG otherwise, your color changes will not show up the next time you run the program. ZERO VALUES: If at some time you read a value of zero that does not make sense (i.e. Principle = $0.00 while Maturity Value = $10,000.00), this indicates that the principle has a value less than one cent. Since our U.S. monetary system is, for all intents and purposes, divided into 1/100's of a dollar, the actual value is not registered on the screen when it is less than one cent (although the computer uses it for calculation). OPME Section 14: OPTIONS MENU ------------------------- This menu has the following selections: Pocket Calculator Printer/Screen Convert Interest Rates Quit AFFORD IT??? Change Calculation Mode Access to DOS New Operating Colors Pocket Calculator invokes the program CALCULTR.EXE. See Section 16: POCKET CALCULATOR in this help system for more information. Convert Interest Rates allows you to calculate matching values between simple and compound interest rates. Change Calculation Mode allows you to switch the loan amortization mode between mode "A" (Add on installments) and mode "E" (Equal principle reduction). See Section 2: ABOUT LOANS AND LOAN CALCULATION for more information. New Operating Colors allows you to change the colors of the AFFORD IT??? environment. If you wish, you can save the colors so they will be in effect the next time you run the program. The following keys can be used to move through the color change menus: Down Arrow End Enter Home Left Arrow Right Arrow Esc Up Arrow You can select a prototype from the menu on the left by pres- sing the enter key when the prototype is blinking. This will move you to the menu on the right where the cursor will be located at the current color selection for that prototype. Use the arrow keys to move to the desired new color, and press the enter key. The change will show up on the blinking proto- type. Press Esc to end the process. If you have made changes, you will be asked if you wish to save those changes to the config- uration file. Printer/Screen allows you to direct the printout to a printer for a hard- copy. See Section 5: CHANGE PRINTOUT for more information. Quit AFFORD IT??? allows you to close and exit the AFFORD IT??? environ- ment. Access to DOS allows you to temporarily shell to the DOS environment. See Section 10.5: ACCESS TO DOS for more information. POCA Section 15: POCKET CALCULATOR ------------------------------ The pocket calculator is a separate DOS program which allows you to do additional mathematical calculations at any time from within (or outside of) the AFFORD IT??? environment. It functions much the same way a regular pocket calculator does, but it also has some extra features. Among them are: a) the backspace key can be used to delete erroneous key entries, b) parenthetic expressions can be used to force early evaluation, and c) exponents can be calculated. It DOES follow operator priority assignments. This means that multi- plication and division are evaluated before addition and subtraction. Parenthetic expressions are evaluated before anything starting with the inner-most pair of parenthesis. The following examples show effects of parenthesis and operator priorities: 1) (8+5)*2 = 13*2 = 26 8+5*2 = 8+10 = 18 2) (5*(9-6)) = (5*3) = 15 5*9-6 = 45-6 = 39 3) (6+2)/((8-1)*3)= 6+2/8-1*3 = 6+0.25-3 = 3.25 (6+2)/(7*3) = 8/21 = 0.381 Exponents can be calculated by using the " ^ " key in the following manner: 2^4 = 16 5^3 = 125 10^2 = 100 Because the Pocket Calculator is a separate program, the AFFORD IT??? help system will not be available while the calculator is being run. It does, however, have its own help-screen which shows the basic functions. If the error message "Unable to access file CALCULTR.EXE" occurs, it is probably necessary to transfer this file to the default drive, or change the current drive to the one containing this program. TRAC Section 16: TRACKER MENU & USES -------------------------------- This menu has the following selections: Create New File Definition Work on Existing File Create New File simply requests all information essential to making a new tracker file. The file is then created and ready for your own data to be added. Work on Existing File opens a tracker file which already was created in the "Create New File" mode. This is the main data entry mode for the tracker file. Definition simply displays on-screen the basic definition of the use of the tracker mode. Reading a File -------------- You may type in the entire path at the open "File" window, or you may select a file from the list in the "Select" window. Alt-F (File) and Alt-S (Select) toggle between the two. The current path shown in the window above these two windows is the one from which the "Select" list was created. You may also use a combination of the two options until you have reached the proper location and file. The Basic Tracker ----------------- The tracker is a powerful feature which allows you to track how much, when, and how long you pay on your loans. It serves equally well if you loan money to other people. You can use it to track when the pay- ments come in from them. It keeps a running tally of the balance due on each loan. Every loan requires a separate file to be kept; however, the files are quite small in terms of disk space. They may also be compressed without harm if you wish to do so (use a file compression utility). Each time you add a data line to the tracker file you have opened, it asks you for the amount and date of the payment. It uses this informa- tion to calculate principle and interest added to and subtracted from your loan. Since most lending institutions base their loans on 12 periods in a year, you will want to enter the date that your payment is due (assuming it is not late) NOT the date on which you mail your pay- ment. If your payment is late, this becomes a little trickier. You will need to use the date on which your loan institution credited your payment since they will be charging additional interest on your overdue payment. (NOTE: Your payment is probably not late if you do not need to pay an additional "late payment" penalty.) You also may need to add to the principle the amount of any penalty required by your lending institution for late payment. Restructure File (Alt-R) ------------------------ This brings to light the option Alt-R which allows you to modify any of the initial parameters of your loan. A data entry menu is displayed just like the one shown in "Create New File." You may alter the data just like you would in any data entry situation (see Section 6: DATA ENTRY for additional information). If any of the parameters affecting calculation are modified, it will ask you from which date you wish loan recalculation to begin. If the date you post matches or is close to one already in the file, the file date will show up with an "*" in front of the payment number to signify that an important change was made around this time. If the modification is due to the addition of a late penalty, for example, you would simply enter the date on which your payment became late. The "new" principle amount (see "The Basic Tracker") would take effect as of that date. As a second example, let us assume you have discovered (12 months later) that you initially set up your file with the wrong amount of principle. You now wish to put in the correct amount. Choose Alt-R and make the changes. When the program requests the date to begin recalculation, enter the same data as the loan was begun. Del, Insert, Change (Alt-L) --------------------------- As additional conveniences, you may delete any line in the file (except the first one), insert a line in between other lines, and/or modify the information contained in any line in the file (except the first line). PgUp, PgDn, Home, End, Arrow keys, Print (Alt-P) ------------------------------------------------ You may use the page, home, end, and arrow keys to view the contents of the file, and you may print the ENTIRE file on a printer as well.