Javascript Function returning wrong calculated value

Question

Javascript

function freq_rate(r) {
  // Step 1 - Equivalent Effective Rate Per Frequency, m, of the Annual Rate, r
  return ((1+r)^(1/12))-1; 
}

function discount_freq_rate(r) {
  // Step 2:  The Discount Version of Step 1
  return freq_rate(r)/(1+freq_rate(r));
}

function fv(r = 0.07,n = 30 ,m = 12) {
  //Apply to a Case Where r = annual interest rate, m = # months and n = # years
  return ((1 + freq_rate(r))^(m*n)-1)/discount_freq_rate(r);
}

I with fv(0.07,30), I am expecting a value of 1176.06485, but I am getting "Infinity" returned. Not sure what's wrong. My calculations are correct in excel with the following formula:

C9  = 1.07^(1/12)-1
C10 =C9/(1+C9)
1176.064858 =((1+C9)^(12*30)-1)/C10

if you get infinity, it probably means you're trying to divide by zero in floating calculation, so discount_freq_rate(1.07) gives zero. Looking at freq_Rate function, you need to review the use of ^, that's not a exponentiation (power) in javascript ! (it's bitwise-xor) Check Math.pow — Pac0
– Pac0, Commented Aug 26, 2021 at 18:55
^ in javaScript and other languages is a logical operator ( XOR operator developer.mozilla.org/en-US/docs/Web/JavaScript/Reference/… ) not a mathematical operator — Mihai T
– Mihai T, Commented Aug 26, 2021 at 19:05

Alberto · Accepted Answer · 2021-08-26 18:55:26Z

4

because ^ in JS is not the "power" operator, try with this:

function freq_rate(r) {
  // Step 1 - Equivalent Effective Rate Per Frequency, m, of the Annual Rate, r
  return Math.pow(1+r , 1/12)-1; 
}

answered Aug 26, 2021 at 18:55

Alberto

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Mihai T · Accepted Answer · 2021-08-26 19:09:02Z

0

That's because ^ in javaScript and other languages is a logical operator not a mathematical operator . See here->XOR

In javascript you can use Math.pow

function freq_rate(r) {
  // Step 1 - Equivalent Effective Rate Per Frequency, m, of the Annual Rate, r
  return Math.pow(1+r,1/12)-1; 
}

function discount_freq_rate(r) {
  // Step 2:  The Discount Version of Step 1
  return freq_rate(r)/(1+freq_rate(r));
}

function fv(r = 0.07,n = 30 ,m = 12) {
  //Apply to a Case Where r = annual interest rate, m = # months and n = # years
  return Math.pow(1 + freq_rate(r),(m*n)-1)/discount_freq_rate(r);
}

console.log( fv(0.07,30))

answered Aug 26, 2021 at 19:09

Mihai T

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