Overview

InterestThing can handle multiple advances in combination with regular payments, as is often the case in construction loans.

Tracking such a loan is just a matter of adding Outflow events for each advance.

Example

On February 1st, 2024, you borrow $10,000 which is to be paid off in 120 monthly installments of $121.33, starting on February 1st. Interest is at 8 % compounded monthly.

The first payment is due on March 1st, 2024.

The lender will provide the money in three advances, according to the progress of construction.

As the actual dates and amounts of the advances are not knwown in advance, when will the loan be paid off?

Suppose advances are made as follows: $4,500 on April 1st, $3,500 on June 1st and $2,000 on September 1st.

Solution

Set up the following cashflow or select the Construction loan example in the Help > Examples menu.

Date	Type	Value	Occurs	#	Change	Comment
02-01-2024	inflow	121.33	monthly	120	no change	Payments
04-01-2024	outflow	4,500	once			Advance 1
06-01-2024	outflow	3,500	once			Advance 2
09-01-2024	outflow	2,000	once			Advance 3

Enter 8 into the rate field and select monthly compounding in Compute Options.

To see when the loan will actually be paid off, switch to the Schedule tab and scroll to the bottom.

You'll see that the balance becomes positive on August 1st, 2033.

Please note that this cashflow has muliple sign changes, due to the fact that the first payment occurs before the first advance. As sign changes only matter when calculating the IRR, this does not influence the calculation of the balances.

Back to Examples