Payment_Protection function

Payment Protection

Calculates the present value of the loan insurance.

Payment_Protection(
  x,
  n,
  k = 1,
  V0,
  i = 0.04,
  ip = 0.04,
  data,
  prop = 1,
  type = "outstanding_debt",
  method = "interest_only"
)

Arguments

• x: An integer. The age of the insuree.
• n: An integer. Loan term (in years).
• k: An integer. Number of payments per year.
• V0: A numeric type value. Loan value.
• i: The interest rate. A numeric type value.
• ip: The interest rate of the loan. A numeric type value.
• data: A data.frame of the mortality table, with the first column being the age and the second one the probability of death.
• prop: A numeric value. It represents the proportion of the mortality table being used (between 0 and 1).
• type: A character string. The type of loan protection/reimburstment ("outstanding_debt" or "payments").
• method: A character string. Amortization scheme ("constant_instalment", "interest_only" or "constant_principal").

Returns

Returns a numeric value (actuarial present value).

Examples

Payment_Protection(35,2,1,1000000,0.04,0.06,CSO80MANB,1,"payments","constant_instalment")
Payment_Protection(43,2,1,1000000,0.04,0.07,CSO80MANB,1,"outstanding_debt","constant_instalment")
Payment_Protection(30,2,2,1000000,0.04,0.06,CSO80MANB,1,"payments","constant_instalment")
Payment_Protection(20,2,2,1000000,0.04,0.07,CSO80MANB,1,"outstanding_debt","constant_instalment")
Payment_Protection(33,2,1,1000000,0.04,0.05,CSO80MANB,1,"payments","interest_only")
Payment_Protection(56,2,1,1000000,0.04,0.06,CSO80MANB,1,"outstanding_debt","interest_only")
Payment_Protection(40,2,2,1000000,0.04,0.06,CSO80MANB,1,"payments","interest_only")
Payment_Protection(25,2,2,1000000,0.04,0.05,CSO80MANB,1,"outstanding_debt","interest_only")
Payment_Protection(23,2,1,1000000,0.04,0.07,CSO80MANB,1,"payments","constant_principal")
Payment_Protection(35,2,1,1000000,0.04,0.06,CSO80MANB,1,"outstanding_debt","constant_principal")
Payment_Protection(45,2,2,1000000,0.04,0.05,CSO80MANB,1,"payments","constant_principal")
Payment_Protection(35,2,2,1000000,0.04,0.07,CSO80MANB,1,"outstanding_debt","constant_principal")