This calculator helps estimate a potential lending rate based on key financial factors. Understanding these components can provide insight into how lenders assess risk and set rates.
function calculateLendingRate() {
var principalAmount = parseFloat(document.getElementById("principalAmount").value);
var termInYears = parseFloat(document.getElementById("termInYears").value);
var operatingCosts = parseFloat(document.getElementById("operatingCosts").value);
var riskPremium = parseFloat(document.getElementById("riskPremium").value);
var desiredProfitMargin = parseFloat(document.getElementById("desiredProfitMargin").value);
var resultElement = document.getElementById("result");
resultElement.innerHTML = ""; // Clear previous results
// Validate inputs
if (isNaN(principalAmount) || isNaN(termInYears) || isNaN(operatingCosts) || isNaN(riskPremium) || isNaN(desiredProfitMargin) ||
principalAmount <= 0 || termInYears <= 0 || operatingCosts < 0 || riskPremium < 0 || desiredProfitMargin < 0) {
resultElement.innerHTML = "Please enter valid positive numbers for all fields.";
return;
}
// Convert percentages to decimals
var operatingCostsDecimal = operatingCosts / 100;
var riskPremiumDecimal = riskPremium / 100;
var desiredProfitMarginDecimal = desiredProfitMargin / 100;
// Calculate total costs and profit as a percentage of principal
// Simplified model: annual rate is sum of components
var calculatedLendingRate = operatingCostsDecimal + riskPremiumDecimal + desiredProfitMarginDecimal;
// Display the result
resultElement.innerHTML = "