FA-58405 / Loan amortization schedules / Member archive

Principal curtailment with recast or term shortening: extra principal cap · case 05

An oversized prepayment drives the balance negative and the loan never reports a payoff payment.

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Case contract

x = {'principal', 'rate_bp', 'months', 'prepay': {'k': extra cents after payment k}, 'mode': 'shorten'|'recast'}. The level payment is the exact annuity rounded half-up. Each month: interest = round_half_up(balance*bp/120000); if balance + interest <= payment or it is month n, pay balance + interest and stop. Otherwise reduce the balance by payment - interest, then apply the extra (capped at the balance). In recast mode a nonzero extra that leaves a balance re-levels the payment over the n - k remaining months. An extra that clears the balance ends the loan with final payment = payment + extra. Return {'months_paid', 'total_interest', 'final_payment', 'payments': payment history}.

Why this case matters

Amortization engines drive borrower statements, payoff quotes and investor remittances; a misplaced rounding step, boundary or ordering rule compounds across hundreds of periods.

One recorded failure

Sample boundary fixture

This sample comes from the broken implementation of a controlled reproducer.

Boundary fixture	Actual	Expected	Outcome
regression: extra principal cap	`{"final_payment": 0, "months_paid": 8, "payments": [21517], "total_interest": 7134}`	`{"final_payment": 106515, "months_paid": 8, "payments": [21517], "total_interest": 7134}`	Failed

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