AMORTZ

Loan Schedules and More!

by
Jim Bowyer
Version 1.40
June 30, 1991

INDEX
=====
I. General Information:
Purpose . . . . . . . . . . . . . . . . 1
About AMORTZ. . . . . . . . . . . . . . 1
For Programmers . . . . . . . . . . . . 1
II. Fast Start . . . . . . . . . . . . . . . . . 2
III. How to Use AMORTZ:
The Data Screen . . . . . . . . . . . . 2
The Options Screen . . . . . . . . . . 3
Example . . . . . . . . . . . . . . . . 5
"What If" . . . . . . . . . . . . . . . 6
IV. Error Messages . . . . . . . . . . . . . . . 7
V. Acknowledgements . . . . . . . . . . . . . . 8

AMORTZ Ver 1.40 Released June 30, 1991 All Rights Reserved
Copyright (c) 1991, 1992 by James J. Bowyer, Oregon Software Group
AMORTZ - User's Guide Page 1
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I. General Information
PURPOSE

AMORTZ (pronounced am-orts, rhymes with quartz) is used to calculate

loan amortization schedules (also known as principal & interest or
loan payback schedules). The schedules can be viewed on a video
screen (by year) or a hard copy of the schedule (or any year within
the loan period) can be printed. Amortz can also calculate interest
rates, payment amounts and so on.

ABOUT AMORTZ

As a CPA, I am familiar with many great financial calculation packag-

es, in both "commercial" and shareware distribution. These packages
typically feature many options that only a bean-counter could love
such as present value computations, depreciation schedules, break-
even analysis, etc.). One of the minor features usually offered is
the ability to print an amortization schedule.
One day, my boss asked me if I had a program that would print a loan
amortization schedule for his home mortgage, as well as having the
ability to do "what if" calculations (what if I pay an additional
$100 per month, for example). I showed him an excellent shareware
package which has the ability to print his schedule, but, because of
the many features included (it is a very thorough package) the cost
was $50.00. While the program was certainly worth $50.00, we would
use only 5% of its power. We agreed that there should be a cheaper
solution.
The result is AMORTZ. This program has fairly modest goals and,
therefore, can have a very modest price. I have resisted all my
impulses to expand the scope of the program beyond the basic goal of
calculating loan variables and presenting a payment-by-payment break-
down of principal and interest. AMORTZ does a fairly simple job, but
it does its job EXTREMELY well.

FOR PROGRAMMERS

AMORTZ was written in the C Programming Language, compiled with

Borland C++ by Borland International, Inc. Windowing and some I/O
routines make extensive use of the TCXL User Interface Development
System by Innovative Data Concepts.
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II. Fast Start

AMORTZ was designed to be extremely "user friendly", another way of
saying that you should be able to run the program without referring
to the documentation. Start the program as you would start any
program, by typing "AMORTZ" at the DOS prompt ('>'). If your copy of
AMORTZ is still on a floppy disk, you will probably need to type
"A:AMORTZ" to run the program from drive A or "B:AMORTZ" to run the
program from drive B.

III. How to Use AMORTZ

THE DATA SCREEN

This is the first screen that users see when running AMORTZ. The
Data Screen is used to input the amounts used in calculating the
amortization schedule. The following data is requested:
1. Principal - The beginning balance of the loan.
2. Interest - The ANNUAL interest rate. Enter the rate as a
percentage (ie. 12.75, not .1275).
3. Payment - The periodic payment. Amortz assumes that payments
are made once a month.
4. Periods - The number of payments to be made (ie. enter 360 for
a 30 year loan).
5. Due Date - The date that the first payment is due to be paid.
6. Fiscal Year End - The month in which your year ends. (This
will almost always be 12 for individuals or families.)
Hitting ESC at any point in the input process will escape the current
data field and re-position the cursor at the top of the screen.
AMORTZ will solve for any ONE of the first four variables. All you
need to do is enter a zero (0) for the value that you want to
determine. If, for example, you wanted to determine what your
monthly payments would be for the car of your dreams, enter the
principal (beginning loan balance), interest rate, zero for the
payment, 60 payments (for a five year loan), and the approximate due
date of the first payment. AMORTZ will then calculate the monthly
payment and replace the zero with the calculated amount.
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III. How to Use AMORTZ (Continued)

After all the data is input, you will be asked if you need to make
any changes. Enter "y" (for yes) if you do want to make changes, and
the cursor will be re-located to the beginning of the screen, ready
to accept new data. You should re-enter only the variables that you
want to change - hitting 'Enter' at any variable will retain the
value previously input for that variable.
When all of the data is correct, just answer the question 'n' (for
no) or simply hit 'Enter'. The data will then be accepted and the
amortization schedule will be calculated.

THE OPTIONS SCREEN

After the data has been accepted and the amortization schedule calcu-
lated, you will be presented with the following options:
F1 - Screen Display
F1 generates a screen display of the amortization schedule
beginning with the first year of the loan. Hitting 'Page
Down' (or the 'Down Arrow' key) will display each succeeding
year until the last payment date is reached. 'Page Up' (or
the 'Up Arrow' key) will scroll the display backwards, giving
you the opportunity to move either forwards or backwards
through the schedule.
F2 - Display One Year
This option generates a screen display for a specific year.
You will be asked what year you want, followed by a display
of the amortization schedule for that year. This is a handy
method to see a specific year without having to page down
through several screens of data.
F3 - Print Entire Schedule
F3 produces a hard copy amortization schedule for the entire
life of the loan. You will be given the opportunity to input
a title for the report, which could be used to identify the
purpose of the loan (just hit 'Enter' if you don't want a
title). The schedule will then be sent to your printer.
F4 - Print One Year
Prints a hard copy report for a single year. You will be
given the opportunity to input a title for the report.
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III. How to Use AMORTZ (Continued)

F5 - Loan Totals
Hit F5 to get a display of total payments on the loan, in-
cluding total principal, interest and payments and the due
date for the last payment. This function is very handy for
determining what the effect of slight increases in your
monthly mortgage principal payment can have over thirty
years.
Hit any key to escape from the Loan Totals screen back to the
Options Screen.
F10 - Change Data
Hit F10 to return to the Data Screen to input a different set
of data. Hitting 'Enter' at any line will retain the exist-
ing value for that line.
ESC - End Program
Hitting the ESC will end the program.
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III. How to Use AMORTZ (Continued)

EXAMPLE
Lets return to that car of your dreams, and see what AMORTZ could do
to help you in your purchase decision:
Assume that you have A $4,000 trade-in to put down on that new
"Turbo 287 ZHQ", you are willing to get strung-out for 5 years on
the loan (60 payments), and your credit union has told you that
your excellent credit rating entitles you to a loan at 13.75%. You
talk it over with your spouse and decide that, by postponing
junior's braces for another year, you can swing payments of $275.00
a month.
Now the big question --- HOW MUCH CAN I AFFORD TO PAY for my
"Turbo 287 ZHQ"?
Fire up AMORTZ (by entering AMORTZ at the DOS prompt) and enter the
following data:
Principal : 0 (0 means to solve for this)
Annual Interest Rate: 13.75
Payment Amount : 275.00
Payment Periods : 60.00
Initial Payment Due : 04/01/XX (Enter the correct date here)
Year Ends in (month): 12
After entering the 12 in 'Year Ends' you will see that the '0' in
the principal field has been replaced with $11,884.78. This means
that the total you can pay for the car of your dreams is $15,884.78
($4,000 trade-in plus 11,884.75 financed).
"NOT ENOUGH!" you cry, "the Turbo 287 ZHQ I want lists for $25,000!
What would my payments be if I ended up paying, say, $24,000?"
To determine this (ie. to solve for the payment amount), answer 'y'
to the "Any Changes" prompt, and the cursor will be positioned back
at the top of the screen, at the principal line. Enter 20,000
(total cost of $24,000 minus the $4,000 trade-in), hit return to
retain the 13.75% interest rate, enter 0 (zero) for the payment
amount and then hit enter three more times (to accept existing
data). AMORTZ will then solve for the Payment Amount and place it
on the screen for you ($462.78).
After picking yourself up off the floor, you are now in a better
position to determine whether the "good old sedan" can make it for
another year ("Hey. It still runs perfectly!")
Be sure to print an amortization schedule after the purchase is
made. This is an excellent means to keep track of your payments
and to see how "quickly"(?) the equity in your new car builds.
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III. How to Use AMORTZ (Continued)

"WHAT IF"

AMORTZ can be used to compare different loan assumptions and scenari-

os (ie. "What if" we added another year to the loan, or "What if" I
increased the principal payment by $25.00 a month). You can cycle
through the Data Screen as many times as necessary (just keep answer-
ing yes to the changes prompt) changing as many variables as you want
to see the effect of any of the changes. Just remember to enter zero
(0) for the value that you want to compute.
For example, assume that you are currently paying $684.33 per month
in principal and interest on your mortgage (DO NOT include "escrow"
payments such as taxes, insurance and PMI in these calculations!).
Your rate is 9.00% and you have 19 years (19 years * 12 months = 228
payments) remaining on the loan.
Enter this data into AMORTZ, using 0 (zero) for the principal, and
AMORTZ will determine that the current principal amount is
$74,624.54. Enter 'y' to accept the data, and the amortization
schedule will be calculated.
When the option menu is presented, hit the F5 key, and the loan
summary will be displayed.
Total Principal $ 74,624.54
Total Interest $ 81,379.78
Total Payments $ 156,004.32
Now you ask yourself "WHAT IF I paid an additional $50.00 per month.
How much would I save in the long-run?"
Simply hit ANY KEY to return to the Option screen, and choose option
F10 to change your assumptions. At the Data screen, hit enter for
the Principal and Interest lines (those values don't change), enter
734.23 at the Payment line (the original $684.23 plus your additional
$50) and 0 (zero) at the Payment Periods line. Amortz will calculate
the remaining periods at the new payment rate (192.27 months).
Choose F5 again to see what effect the increased payment has had.
You may be surprised at how much you can save by this additional
payment!
Of course, you could take a look at the amortization schedule (on
screen or by printing a hard copy) after any of your assumptions to
see how quickly the principal of your mortgage is declining.
WARNING - YOUR PARTICULAR MORTGAGE AGREEMENT MAY NOT ALLOW ADDITIONAL
PRINCIPAL PAYMENTS, OR MAY REQUIRE CERTAIN MINIMUM
INCREMENTS!
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IV. Error Messages

The following is a list of error messages that AMORTZ could generate,

along with recommended corrective action:

Amortization period exceeds program maximum.

It is quite possible to enter loan data that results in the
loan never being completely paid-off. This is usually due to
input errors or erroneous assumptions. To catch these types
of errors, AMORTZ terminates calculating after 601 payments
are reached. You could still print the schedule up to the
600th payment if you wanted to.

Formula Cannot be Resolved

AMORTZ has tried to solve for an unknown variable, and has
found no real answer. This is probably due to input errors
or invalid assumptions. Review your data and re-enter the
variables.

Number is too large!

AMORTZ has the following input maximums:
Principal - $9,999,999.99
Interest Rate - 99.99%
Payment Amount - $99,999.99
Payment Periods - 600
These maximums are absolute. There is no effective work-
around if you have figures larger than these.

Printer is not Ready!

Make sure your printer is turned on, is currently on-line,
and is not out of paper.

Program Terminated Abnormally. Memory Allocation Error.

AMORTZ needs less than 256K of RAM to run successfully. If
you get a memory allocation error, try removing any other
programs that may be occupying memory and run AMORTZ again.
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V. ACKNOWLEDGEMENTS

Special thanks to:

Steve Bohrer - For the inspiration and for endless
proofreading and testing
BETA Testers - Al Hess, Mark Thimell, Bob McGargle,
Larry Anhutt, Jan Fisher, Mark Jones &
Robert Barbarin
Mike Smedley & Chip Rabinowitz - For the TCXL Library
Chris Bowyer - For all of the encouragement and support