skippyonspeed
Some people think I'm a little bit crazy, but I know my mind's not hazy
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Post by skippyonspeed on Nov 2, 2015 10:29:32 GMT
I'm not the only one who has questioned the necessity for AC's interest calculations to be worked out to 40 decimal places. I personally would be content with 15 (rounded down). What's leftover could go to AC......maybe used to buy drinks at their Xmas party  |
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sqh
Member of DD Central
Before P2P, savers put a guinea in a piggy bank, now they smash the banks to become guinea pigs.
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Post by sqh on Nov 2, 2015 10:38:13 GMT
I'm not the only one who has questioned the necessity for AC's interest calculations to be worked out to 40 decimal places. I personally would be content with 15 (rounded down). What's leftover could go to AC......maybe used to buy drinks at their Xmas party I suspect the most common reply will be "why can't we vote for less than 15 ?" How about 4 decimal places.
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skippyonspeed
Some people think I'm a little bit crazy, but I know my mind's not hazy
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Post by skippyonspeed on Nov 2, 2015 10:45:00 GMT
The reason I suggested 15 was that I've noticed interest rates (using Excel spreadheet) vary after that virtually on a daily basis.
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skippyonspeed
Some people think I'm a little bit crazy, but I know my mind's not hazy
Posts: 787
Likes: 424
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Post by skippyonspeed on Nov 2, 2015 10:49:27 GMT
How about 4 decimal places. Because they would probably all end up at A&E due to alcohol poisoning
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Post by chris on Nov 2, 2015 10:54:40 GMT
The reason I suggested 15 was that I've noticed interest rates (using Excel spreadheet) vary after that virtually on a daily basis. As soon as you have more than zero decimal places it's arbitrary for the computer to work to 1, 2, 10 or 100 decimal places. We use either 20 or 40 in different parts of the code as they were deemed to be suitably small to prevent rounding errors from accumulating to the point of significance. The main issue you need to work around is that loan units are not stored as a pounds and pence value but as a fraction of the overall loan. So if you have £1 invested in a £100k loan then you hold as a fraction 0.00001 of the overall loan. That's fine for numbers that divide nicely but you need higher precision to represent some amounts. Even with 40dp you can't represent every value accurately to always have a nice whole number displayed on screen. Storing your holdings in this way makes a lot of other calculations far easier, such as working out who owned what at an arbitrary point in time in the past which is needed where payments are late or interest is deferred. We've tried several different methodologies for hiding that complexity from lenders, displaying figures to 2 decimal places, then 8, now 20. Each time we've still had the odd lender here or there that's tried to work out what they should be paid in interest or capital and do actually complain about being even a fraction of a penny out. It's not a priority for the business to change our methodology right now so whilst at some point I'll carry out a review across the site to make sure everything is consistent, I have no plans to do anything beyond this or make underlying changes any time soon.
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skippyonspeed
Some people think I'm a little bit crazy, but I know my mind's not hazy
Posts: 787
Likes: 424
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Post by skippyonspeed on Nov 2, 2015 11:00:51 GMT
The reason I suggested 15 was that I've noticed interest rates (using Excel spreadheet) vary after that virtually on a daily basis. As soon as you have more than zero decimal places it's arbitrary for the computer to work to 1, 2, 10 or 100 decimal places. We use either 20 or 40 in different parts of the code as they were deemed to be suitably small to prevent rounding errors from accumulating to the point of significance. The main issue you need to work around is that loan units are not stored as a pounds and pence value but as a fraction of the overall loan. So if you have £1 invested in a £100k loan then you hold as a fraction 0.00001 of the overall loan. That's fine for numbers that divide nicely but you need higher precision to represent some amounts. Even with 40dp you can't represent every value accurately to always have a nice whole number displayed on screen. Storing your holdings in this way makes a lot of other calculations far easier, such as working out who owned what at an arbitrary point in time in the past which is needed where payments are late or interest is deferred. We've tried several different methodologies for hiding that complexity from lenders, displaying figures to 2 decimal places, then 8, now 20. Each time we've still had the odd lender here or there that's tried to work out what they should be paid in interest or capital and do actually complain about being even a fraction of a penny out. It's not a priority for the business to change our methodology right now so whilst at some point I'll carry out a review across the site to make sure everything is consistent, I have no plans to do anything beyond this or make underlying changes any time soon. I just thought a thread and poll would show an overall view of all the members.......who bother to vote!
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Post by chris on Nov 2, 2015 11:11:15 GMT
I just thought a thread and poll would show an overall view of all the members.......who bother to vote! Which is fair enough, it's just not going to influence anything in the short to medium term.
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Post by yorkshireman on Nov 2, 2015 12:22:56 GMT
This doesn’t occur with the banks or on other P2P sites, you get 2 decimal places i.e. £0.00 to £0.99 so why have AC got to be different?
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Post by mrclondon on Nov 2, 2015 12:49:53 GMT
The thread Capital invested Changing is also relevant to this discussion. The issue, to my mind, isn't the number of dp per se, but the rules used in applying rounding to create the 2dp figures. £1999.9999999999999998 should be displayed as £2000.00 not £1999.99 as is currently the case.
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rogerbu
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Post by rogerbu on Nov 2, 2015 19:00:34 GMT
This doesn’t occur with the banks or on other P2P sites, you get 2 decimal places i.e. £0.00 to £0.99 so why have AC got to be different? My AC tracking reconciles with AC's figures. A couple of other P2P sites that only give me the £x.xx figure do not reconcile correctly. Small errors do mount up!
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Maestro
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Post by Maestro on Nov 2, 2015 19:04:19 GMT
The poll is missing a critical choice: "Don't give a damn, just give me some more loans".
Honestly, the phrase "penny wise, pound foolish" takes on a whole new meaning here. Second by second interest, calculated to 40dp. I mean even the Planck constant is only accurately measured to around 10^-45. What does AC want to be: The first quantum P2P platform? Well said samford71This statement by chris below reminds me of a Aesops fable of man, boy and his donkey.. "We've tried several different methodologies for hiding that complexity from lenders, displaying figures to 2 decimal places, then 8, now 20. Each time we've still had the odd lender here or there that's tried to work out what they should be paid in interest or capital and do actually complain about being even a fraction of a penny out." For me displaying 2 decimal places are more than enough, any more is an eyesore.
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mikes1531
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Post by mikes1531 on Nov 3, 2015 4:11:09 GMT
Has anyone ever tried to work out how many atoms are in a penny? Or conversly, how much one atom's worth of a penny is? My physics is rather rusty, but I think 40 decimal places is well more than necessary to display that.
Now off to Wikipedia to brush up on Amedeo Avogadro and his number.
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jonah
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Post by jonah on Nov 3, 2015 5:43:31 GMT
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Post by batchoy on Nov 3, 2015 7:24:47 GMT
Has anyone ever tried to work out how many atoms are in a penny? Or conversly, how much one atom's worth of a penny is? My physics is rather rusty, but I think 40 decimal places is well more than necessary to display that. Now off to Wikipedia to brush up on Amedeo Avogadro and his number. It depends on how accurate you want to be as it is not a nice simple decimal fraction so 40 decimal places might be about right but you only need about 25 decimal places for the first non-zero digit. However it is irrelevant as to how many decimal places the platform uses in the background, it is how the system rounds the information for display and user interaction that needs to be sorted out. Most organisations, not just financial, ones live with the fact that the lowest monetary unit in the UK a 1p or £0.01 with the result that figures have to be rounded up and rounded down to 2 decimal places for human and business to business interaction. There is as a result an impact on their bottom line of fractions of a penny either positive or negative but overall these tend to balance each other out and the negligible result over an accounting period is absorbed by the business. AC seem to have taken the position that everything has to be done with cleared lender and borrower funds and that there must be no rounding errors because they as a business cannot absorb them be they positive or negative. However this is a flawed position to take since it assumes that no-one will ever want to withdraw funds from the platform, a transaction that can only be done to 2 decimal places and will as a result leave sub-penny residuals meaning that an account can never be closed.
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Post by chris on Nov 3, 2015 9:22:31 GMT
Has anyone ever tried to work out how many atoms are in a penny? Or conversly, how much one atom's worth of a penny is? My physics is rather rusty, but I think 40 decimal places is well more than necessary to display that. Now off to Wikipedia to brush up on Amedeo Avogadro and his number. It depends on how accurate you want to be as it is not a nice simple decimal fraction so 40 decimal places might be about right but you only need about 25 decimal places for the first non-zero digit. However it is irrelevant as to how many decimal places the platform uses in the background, it is how the system rounds the information for display and user interaction that needs to be sorted out. Most organisations, not just financial, ones live with the fact that the lowest monetary unit in the UK a 1p or £0.01 with the result that figures have to be rounded up and rounded down to 2 decimal places for human and business to business interaction. There is as a result an impact on their bottom line of fractions of a penny either positive or negative but overall these tend to balance each other out and the negligible result over an accounting period is absorbed by the business. AC seem to have taken the position that everything has to be done with cleared lender and borrower funds and that there must be no rounding errors because they as a business cannot absorb them be they positive or negative. However this is a flawed position to take since it assumes that no-one will ever want to withdraw funds from the platform, a transaction that can only be done to 2 decimal places and will as a result leave sub-penny residuals meaning that an account can never be closed. It's a position we had to take since loan sizes are much smaller than in other traditional institutions. If a bank is losing a penny a month on the interest of a £100k loan then the bank isn't likely to care. If a lender is losing a penny a month on a £1 loan then suddenly it's significant. So we either reinstate minimum lending amounts, and amortising loan units that shrink below that level cannot be sold on the aftermarket, or we need to calculate values to less than 1p. Our main issue has been a change in philosophy from launch. When the site launched we followed the same model as FC whereby the complexity is hidden from view, whole pennies are displayed, and fractional payments are accumulated behind the scenes until they tick over into a whole penny. So for example a capital repayment on a loan may oscillate along the lines of 99p, 99p, 99p, then £1 in the fourth month, before returning to 99p for another three months. Because loan units were of £100 maximum this meant there was a lot of cumulative rounding happening on some accounts with large investments. A by product of this rounding scheme is that lender holdings are overstated. If you've had 99p repaid in capital on a £100 loan unit, but behind the scenes a further 0.3p has been accumulated, then your holding of £99.01 (the original £100 less the 99p that has been visibly repaid) is higher than the actual £99.007 you really hold. If you have £100k invested in the loan then with £100 loan units your displayed capital balance is £3 out. Due to some of the other features we wanted to introduce, such as being able to split and merge loan units or restructure loans mid term (such as applying default interests or having capital pay down), we couldn't stick with that model. It would cause a huge number of issues where many rounding errors were then merged or restructured, and made the behind the scenes coding impossibly complex. The model of storing every balance to 40dp is actually far simpler behind the scenes, with the number of places being arbitrary from a coding point of view. No code changes between storing 2 decimal places or 40 unless you add extra code to the two decimal places version to cope with the loss of precision. With the release of the new system we had a huge amount of feedback both on the forum and directly regarding people's balances changing as per the £3 example above. In reality the lender's holdings haven't changed, it's just the previously hidden repayment of capital is now visible. We had a huge number of complaints with the consensus on the forum at the time being that we should round up holdings to the nearest penny, not simply round to nearest. To make that work payments were rounded down and holdings were rounded up, with further complication where some investments can't be represented as a fraction even with 40dp so a £240 may be rounded to £239.99999999... In that instance we apply a small rounding up fudge factor to get it to display £240. I've always preferred rounding to nearest but the forum at the time didn't want that nor did the other lenders we canvassed. Getting the other developers to consistently implement this has also been a challenge. If I make any change now then lender holdings will change slightly and we'll get another flood of complaints where people have "lost" a penny. I'd be happy to install a simple round to nearest 2dp everywhere, rounded to 8dp on tool tip, with perhaps an option to show the full 40dp if you then click on the tool tip or something like that. I personally feel that's easier to explain to new lenders, but please don't underestimate the level of complaints we'd get. I lost many weeks of time having to investigate individual lender's holdings where they claimed they'd lost a penny here or there, demanding proof it wasn't the case. Equally it's draining to have to periodically go over this so perhaps I should just bite the bullet...
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