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An important message

What CIC can do

An example using the comparison tables

Bug report

 

What CIC can do

CIC gives you the information you need when it comes to complex compound interest calculations - before you even approach a lender!

With CIC you can -

  • find the future value of an initial deposit;
  • find the future value of regular deposits;
  • find the initial amount needed for regular withdrawals;
  • find the payment amount needed for a loan, re-calculate the loan with a larger repayment, work out the remainder of a loan after a certain number of repayments, get a summary of the costs involved for each year;
  • find the number of repayments and time needed when the initial loan amount and the repayment amounts are known.

There is no limit to the number of modules you can open at any one time. Compare several scenarios with each other, or work out one scenario and compare it with another working backwards. Because larger scenarios are split into their separate modules CIC allows you to change the Menus as you go along without compromising the previous setups.

Start window:

CIC window start screen

CIC show memory button CIC reset memory button CIC wipe memory button
Use these buttons to bring up the memory store window, reset the memory to 0, and to delete the contents from memory. You use the memory by right-clicking over a particular result field and selecting either 'Add to memory' or 'Subtract from memory'. Add or subtract any result from any window (of course, the figures have to make sense when they are brought together). Tip: if you inadvertently added the wrong value simply right-click and subtract that value. Tip: closing the memory store window will not remove the contents; click on the '=' button to make the window re-appear.

Below is the 'Loan repayment - find payment amount' window as an example of what you'll find.

CIC window loan repaymts


Below is the memory window, showing how the selected results are displayed and their tags which have been entered into the 'tag' field in the module.

CIC window memory store

In this case two results from interest-bearing deposits have been added together, tagged 'A1'. Next the memory was reset to 0 and the balance of a loan was entered to which was added the total cost of another loan derived from the first one. Both loan modules were tagged differently to keep them apart from the deposit scenario.

For your convenience you can copy the given values and their results to the clipboard and paste them into your word processor and print them out for future reference, or paste them into your spreadsheet to be used for further calculations. Copy individual numbers by highlighting the text or copy the entire scenario by using Copy to clipboard. The same goes for the memory contents.

View and copy the formulas used for each of the calculations.

Deposits

You can find out by how much an initial deposit will grow over the years, or compare it with depositing smaller but regular amounts over a certain number of years. Work out both options together and see the difference.

Or, you want to withdraw a certain amount of money on a regular basis and need to know how much the initial deposit must be. Use one of the first options at the same time to find out the time needed to save up for that amount.

Loans

Find the most convenient loan amount given the number of years you want to make available and work out the necessary repayments for that loan, plus the total amount the loan will have cost you at the end. Use the repayment table to observe how the interest you pay adds up over the years during the life of the loan and how and when the principal eventually starts shrinking.

To see the effect of repaying more than the required amount, enter the additional amount next to 'Amount added to repayment needed' and click the Calculate button in the 'Initial loan' section. The repayment table, the comparison table and the remaining balance results will be adjusted accordingly when you click the respective buttons. Note: In the comparison table the total cost of the balance loan is based on the original duration of the loan, and not the shortened period achieved through repaying an additional amount (this is the conventional approach adopted by lenders).

What happens when you want to renegotiate a loan, or carry it over to another institution for that matter? CIC will tell you what the balance of the loan is worth after a given number of years. Enter the number of repayments already made in 'How many repayments have been made' and you'll get the cost of the loan so far and the remaining balance of that loan. If you added an additional amount to the repayments the results will reflect this.

Then you can enter that balance into another window of the same module and treat it as a new loan, select the parameters for that new loan (eg, interest rate, number of years, etc.) and compare the total cost with the original loan arrangement. Although your repayments may be smaller now, the overall cost will be higher; see by how much. Note: if you added to the repayments for the original loan the results for the new loan do not include that additional amount; they are based on the repayments needed for that second loan and not more. To add more to the repayments simply add the desired amount in the second window.

Use the comparison table of loan balances for each year of the original loan. It tells you the total cost of the original loan up to each of the years, the total cost of the new loan based on the balance of the original loan at that time, and the combined cost of both. See how the combined cost grows with every year and how it eventually decreases as you reach the end of the loan period; yet it will always be higher than the total cost of the original loan over its life time, although the individual repayments are smaller. Then, if you want to get more detail as described above, use a second window of the same module, paste the loan balance for a certain year into the loan amount and get the amount of repayments and interest paid over the years for that new loan.

Continue to evaluate the balance of the new loan after a certain number of years, get a new comparison table and calculate the details of yet another loan based on the balance after a certain number of years. Add all the total costs together to find how much such a plan would cost you in the end. Example.

Have any money to spare during the loan period? Use the deposit modules again to find out how you can benefit by depositing it in an interest-bearing account.

Knowing the details of an existing loan arrangement, what happens when you change the repayment amount? Use "Loan repayment - find amount and period" to calculate the number of repayments necessary at that point.

Note: Lending institutions charge fees which add to the overall cost, and the rules governing different institutions vary (commercial banks, credit unions, building societies, credit card companies, etc). Always consult the lender to find out the details at the time.

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© Martin Wurzinger - see Terms of Use