Government Math

[scowha7]

Today I'm not teaching someone else algebra, I'm trying to teach myself Government math....I think the only way I'm ever going to have the mental capacity to learn this is to jam a pencil through my ear! Get this: if you pawn something in Indiana the in here's how the interest rate breaks down (or what the pawnbroker is ALLOWED to do).

Say it's a $5,000 item for giggles:

You'll pay the greater of the following two:

On the first $990, you'll pay 36% interest

On the next $2310, you'll pay 21% interest

On the last $1700, you'll pay 15% interest

Total of about $161.20 a month

--OR--

21% on the total: $90.42

PLUS (Yeah, always a plus!)

You'll pay a 20% (Additional charge: storage, forced financial bondage, whatever they wanna call it) per month (not APR). That comes to $1,000 a month!!!

So, what you COULD pay by state law (and is perfectly legal) over the course of a 90-day pawn loan on $5,000 is: $3468.00 in fees. To get your item back in 90 days, you'd have to throw down $8,468.00!

Now, it's not THAT easy of course!

Say you do this on 1/31. On 2/1, you owe a full month's fees. So for that one day, you pay $1161.20 in interest. On 2/28, you still owe only 1161.20 in interest. However, on 3/1, you owe ANOTHER 1161.20 in fees. For a total of 3321.40 in fees. Why? Because by definition, 1/31 to 2/1 is a month. 1/31 to 2/28 is a month. 1/31 to 3/1 is TWO months.

Even crazier still...(really Scott, it gets crazier?) Why yes, since you ask. Say you pawn something at 9:00am on 1/31 and at 9:15am you come back into the store to get it back (pay off your loan). How much do you think you owe? Yup, $6,161.20!

Right now I have a headache...I understand all of the above...to an extent...but trying to make the state's definition of a "day" or a "month" fit in with the calculations in our software is not as simple as it sounds...Oh...and this is just ONE state. Minnesota has 3 different allowable calculations itself. Each state does something just a little different, so by the time we go mainstream, we'll have to have it calculate hundreds of different variations. (I'm not going to think that far ahead. Alpha 1 comes out next month. Beta 1 by October and Release 1 full by January 1. Which means on January 1, I become President of the company and hire someone better than me to code all the other states)

[BUCKY]

HUH??

[JCON]

Lol, glad it's you and not me...

[Gothic]

[Buddho]

What the...

[Dukemaddog]

Okay, I think my brain just shut down and crashed. It's gonna take me hours to reboot.

That's it, back to the Hobby Room......

[scowha7]

Worked on this for another hour last night...Wow! I started it with a mild migraine and 90 minutes later had my worst one of the year! All trying to reconcile the state's definition of a "day" and a "month" using nothing but cryptic MS Excel formulas. They don't have the regulation spelled out anywhere that the public or pawnbrokers can get to it, but I have obtained a "secret" internal spreadsheet that they use for checking calculations. There's no documentation, they have it locked, and the formulas are spread out all over the place.

I could go into all of the terrible, excruciating details, but I don't want to pass the pain on . So, if you could, each one of you go spend 30 minutes in your hobby room in memory of my rapidly dying brain cells! haha!

[JCON]

Lol, as I said, glad it's you and not me brother!!!

[scowha7]

Yeah, I'll bet. haha! It's just plain crazy!

[JED]

I was never any good at maths (UK) have gotten better with age and worldly experience but what did you say 😂😂😂😂

[scowha7]

I'm not even sure at this point anymore Jed. I just woke up--had passed out at desk, blood running from eyes and a pencil jammed in my ear. I think I tried to end it all but failed! haha

[JED]

Jun 29, 2018 12:51:29 GMT -6 scowha7 said:

I'm not even sure at this point anymore Jed. I just woke up--had passed out at desk, blood running from eyes and a pencil jammed in my ear. I think I tried to end it all but failed! haha

Understandable!!

[BUCKY]

Hmmmm....I'm sensing a connection to the migraine headaches, here!!

[scowha7]

This week yes Bucky! haha!

[scowha7]

I knew you'd all be interested. According to the Indiana State Department of Financial Institutions, this is how you calculate the number of days between two dates:

To calculate a "month", must first calculate the number of days between the date opened and the date the loan is being paid:

== Algorithm ==

== Indiana DFI - Number of Days between two dates ==
To calculate a "month", must first calculate the number of days between the date opened and the date the loan is being paid:
*If the loan open month is in February, then the number of days is found by this logic:
**If the day of the paid date is 31:
***If the EDATE of the Open Date + 1 is less than the paid date plus 1
**** # days = 30 days + (the number of days between the open date + 1 month and the paid date based on a 360 day year) minus 1 day
***Else
**** # days = the number of days between the open date + 1 month and the paid date based on a 360 day year
**Else
***If the EDATE of the open date plus 1 is less than the paid date plus 1
**** # days = 30 days + (the number of days between the open date + 1 month and the paid date based on a 360 day year)
***Else
**** # days = the number of days between the open date + 1 month and the paid date based on a 360 day year
*Else
**If the date paid is in February:
***If the date of the date paid is the 29th then:
****If the day of the start date is greater than 28:
*****If the EDATE of the start date plus 1 month equals the paid date:
****** # days = 30
*****Else
******If the date paid is the last day of the month:
******* # days = round: [-1 * (number of days between the open date and the paid date) divided by 30] to the nearest integer
******Else
*******# days = the number of days between the open date and the paid date based on a 360-day year
****Else
*****If the date of the open date is greater than 27:
******If the EDATE of the open date plus 1 month equals the paid date:
******* # days = 30
******Else:
******* If the paid date is the last day of the month:
******** # days = round: [ -1*(days between the open date and the paid date based on a 360-day year) divided by 30 ] to the nearest integer
******* Else
******** # days = the number of days between the start date and the end date based on a 360-day year
**Else:
***If open date is the last day of the month:
****# days = the number of days between the open date + 1 month and the paid date based on a 360 day year
***Else
****If the paid date is the 31st of the month:
***** # days = (the number of days between the open date + 1 month and the paid date based on a 360 day year) minus 1 day
****Else:
***** # days = the number of days between the open date + 1 month and the paid date based on a 360 day year

[JCON]

Makes perfectly good sense... NOT!!!!

[Buddho]

Good gawd.

[scowha7]

I had to reverse engineer that logic from Excel formulas ONLY. They don't spell out the definition ANYWHERE the public can see it in plain english. And the functions that are in Excel only exist in excel. Which means for our system, we're going to have to write functions to do what excel does!

[scowha7]

This is great....The state provided us with an Excel spreadsheet to validate our code. I just figured out that THEIR code is wrong! haha! on a $1,000 loan, they figured it on 36% for the entire loan. However, state law says 36% on the first 990 only. For that next $10, you can only charge 21%. That's a 15 cent per month difference on $1,000. Of course, on anything over 3300, I'm sure they're wrong too.

[JCON]

LOL!!! Government for you!!! Long as its in their favor!!!