numpy.ipmt() in Python

numpy.ipmt(rate, nper, pv, fv, when = ‘end’) : This financial function helps user to compute payment value as per the interest only. i.e. returns the interest part.

Parameters :
rate : [scalar or (M, )array] Rate of interest as decimal (not per cent) per period
nper : [scalar or (M, )array] total compounding periods
fv : [scalar or (M, )array] Future value
pv : [scalar or (M, )array] present value
when : at the beginning (when = {‘begin’, 1}) or the end (when = {‘end’, 0}) of each period.Default is {‘end’, 0}

Return : Payment value ie. the interest part of it.

Equation being solved :

fv + pv*(1+rate)**nper + pmt*(1 + rate*when)/rate*((1 + rate)**nper – 1) == 0

or when rate == 0
fv + pv + pmt * nper == 0

Code:

# Python program explaining
# ipmt() function

import numpy as np
'''
Question :

monthly payment needed to pay off a $10, 000 loan
in 12 years at an annual interest rate of 60 %
'''

Solution = np.ipmt(0.6 / 12, 2 * 12, 1 * 12, 10000)

# Here fv = 0 ; Also Default value of fv = 0
print("Solution - ipmt value : ", Solution)

Output:

Solution - ipmt value :  801.4432933339593