• Welcome to the new COTI server. We've moved the Citizens to a new server. Please let us know in the COTI Website issue forum if you find any problems.

Questions? about Merchant Prince

I believe I understand the makings of a basic company.
What would you suggest about keeping track of company ship fleets? If my company buys stocks in other Mega-corporations what are the dividends / beneficents? If my company Remanufacture's Starships from scrap hulks and over aged ships whats a good resale price? (is there ship auctions / bankruptcy auctions and used ship yards like firefly for instance?) If my corporation hostile takeovers a failing or bankrupt LIC corporation what extra benefits does LIC offer me? Is there a shell corporation structure like we have now to dodge taxes and offer corporation protection? Is there a way to make a shadow corporation (underworld driven) puppeteering other corporations? Is there a universal money system via the banks for buying generalized stock items (for instance Scrap hulks from the Navy's, Scouts exec.. or standard items to remanufacture items)

If the game I'm playing in, some are using parts of Merchant Prince Trade for instance, How would I curb the corporation side to not overpower the game as a player?

Thx,
Subzero001
 
There is no canonical information on stock return on investment. However, since we know return on starship loans is around 1%, the reasonable expectation is that return on stocks should be not too far off from that. (Until recently, stock returns were not too far off from interest rates, if not just a bit ahead. At present, they seem to be running about half the long-term loan rates.)

So share prices should run about 100x the expected dividends, and dividend performance range should be in the range 0-5% of share values, skewed heavily toward 1%.
 
A bit over 5%, surely?


Hans

Nope. 1.176% APR, at least when compounded monthly*, using 480 payments of 1/300th financed value over 40 years.

Now, compounding out, that works out to a measly 1.18% per year.

Starship loans have been known to be WAY low for years.

Even if figured annually compounding, 1.1819394222011281 APR.

a payment of 1/240th of the ship's value is 1/300th of the 80% which is borrowed. 480 of them is 160% of financed value over 40 years; extract the 480th root for monthly compound rate per month (1.0009796537751867), subtract 1 (0.0009796537751867174), multiply 12 to get the claimed APR as a fraction (0.011755845302240608), then x100 to get the claimed APR 1.17558453022406.

It's lower still if we assume 13 months, , with one month having no payment... annually 1.0851140778037838 APR.

Even if we assume the 3I makes 50% of the interest payment, it's still 1.9727632069921341% APR for 12 monthly compounds, 1.9726385435333782% APR for 13 monthly, 1.990698708832661% APR annual Compound.

If we assume the 3I is matching your payments Credit for Credit (which The US did for certain civil aviation reserve fleet aircraft), 12 monthly compound 2.9114031007669183% APR, 13 monthly compound is 2.911131661823374% APR, and Annually compounded is 1.0295056856965386% APR.

For 5% APR, a modern "reasonable" ROI, your payment would be just over 1/68th the financed amount... assuming annual compounded... and on a 40 year boat, you're paying over 700% of purchase price.

So, No, Hans, nowhere near 5% APR. 5% APR given the operation costs as is** would rise drastically, and the canonical shipping rates would be insufficient to justify any shipping at all. About 4.4x the payments, and thus about 4x the costs.

I'm certain that GDW in fact did do that much of the math.

Real World
Many dividend paying stocks pay quarterly in the order of 0.1% - 3% of share value, for a net APR of 0.4% - 10%, thus peak about a a half the prime lending rate 18% last I checked), and about the long term lending rates (which range 7-10%). Maritime loans tend to be running 5% - 10% APR from what little I can find. (The lowest ones are manufacturer supplied loans... Hyundai, etc... and government subsidized loans

-=-=-=-=-=-=-=-
* as is typical practice for house, vehicle, aircraft, and shipping loans. Some compound daily; those are considered abusive for long term loans, but some short term interim financing loans do work that way.

** Not getting into whether the prices for LS, Etc, are reasonable.
 
Last edited:
Compound interest is not my strong suit, so what you say makes no sense to me.

If I buy a MCr100 ship, I provide a down payment of MCr20 and borrow MCr80.

Each month I pay 1/240th of MCr100 = MCr0.4167

MCr0.4167 is 0.52% of MCr80.

That works out at 6.25% per year. I confess that I don't know what difference it makes to compound it monthly (Don't get me wrong. I know that it makes a difference. I just don't know how big a difference). But I don't see how it can make that big a difference.

I'm also aware that part of those 6.25% goes to pay off the principal, which someone (I think it was Jim McLean) explained to me meant that the effective return was somewhere a bit over 5%.


Hans
 
No, it doesn't. You're not compounding at all, which is not how the world works.

At 6.25% per year, in year one, you pay 12x0.4167=5.0004, which, by the way, won't Quite pay off at 6.26% APR annually compounded
You borrowed 80, leaving 74.9996. They then charge you the interest on the ballance remaining at end of year: 4.687475. They add this to the remaining principal, meaning you now after one year, still owe: 79.68707500000001


YearEnd _ PymtTot _____ TotOwed ______ Interest
0 ____________________ 80.000000 _____ 0.000000
1 ________ 5.163 _____ 74.837000 _____ 4.677313
2 _______ 10.326 _____ 74.351313 _____ 4.646958
3 _______ 15.489 _____ 73.835271 _____ 4.614705
4 _______ 20.652 _____ 73.286976 _____ 4.580436
5 _______ 25.815 _____ 72.704412 _____ 4.544026
6 _______ 30.978 _____ 72.085438 _____ 4.505340
7 _______ 36.141 _____ 71.427778 _____ 4.464237
8 _______ 41.304 _____ 70.729015 _____ 4.420564
9 _______ 46.467 _____ 69.986579 _____ 4.374162
10 ______ 51.630 _____ 69.197741 _____ 4.324859
11 ______ 56.793 _____ 68.359600 _____ 4.272475
12 ______ 61.956 _____ 67.469075 _____ 4.216818
13 ______ 67.119 _____ 66.522893 _____ 4.157681
14 ______ 72.282 _____ 65.517574 _____ 4.094849
15 ______ 77.445 _____ 64.449423 _____ 4.028089
16 ______ 82.608 _____ 63.314512 _____ 3.957157
17 ______ 87.771 _____ 62.108669 _____ 3.881792
18 ______ 92.934 _____ 60.827461 _____ 3.801717
19 ______ 98.097 _____ 59.466178 _____ 3.716637
20 _____ 103.260 _____ 58.019815 _____ 3.626239
21 _____ 108.423 _____ 56.483054 _____ 3.530191
22 _____ 113.586 _____ 54.850245 _____ 3.428141
23 _____ 118.749 _____ 53.115386 _____ 3.319712
24 _____ 123.912 _____ 51.272098 _____ 3.204507
25 _____ 129.075 _____ 49.313605 _____ 3.082101
26 _____ 134.238 _____ 47.232706 _____ 2.952045
27 _____ 139.401 _____ 45.021751 _____ 2.813860
28 _____ 144.564 _____ 42.672611 _____ 2.667039
29 _____ 149.727 _____ 40.176650 _____ 2.511041
30 _____ 154.890 _____ 37.524691 _____ 2.345294
31 _____ 160.053 _____ 34.706985 _____ 2.169187
32 _____ 165.216 _____ 31.713172 _____ 1.982074
33 _____ 170.379 _____ 28.532246 _____ 1.783266
34 _____ 175.542 _____ 25.152512 _____ 1.572032
35 _____ 180.705 _____ 21.561544 _____ 1.347597
36 _____ 185.868 _____ 17.746141 _____ 1.109134
37 _____ 191.031 _____ 13.692275 _____ 0.855768
38 _____ 196.194 ______ 9.385043 _____ 0.586566
39 _____ 201.357 ______ 4.808609 _____ 0.300539
40 _____ 206.520 ______ 0.000000 _____ 0.000000

TotOwed is at end of year; it's the prior year's owed plus the interest assessed at end of the prior year, less payments for the current year. PymtTot is total of all years payments to end of the listed year. Interest shows the figured interest.

The monthly payment, by the way, for 6.25% compounded annually is 0.43025.

The compounding is simply how often they assess interest. If the period is less than a year, the APR is divided by the fraction of year assessed, the used to figure the interest on the balance at that point.
 
Just for reference, heres an APR 1.9% compounded annually:
YrEnd _____ PymtTot _ TotOwed _______ Interest
0 ___________________ 80 ____________ 0.000000
1 ________ 2.82 _____ 77.180000 _____ 1.466420
2 ________ 5.64 _____ 75.826420 _____ 1.440702
3 ________ 8.46 _____ 74.447122 _____ 1.414496
4 _______ 11.28 _____ 73.041618 _____ 1.387791
5 _______ 14.10 _____ 71.609409 _____ 1.360579
6 _______ 16.92 _____ 70.149988 _____ 1.332850
7 _______ 19.74 _____ 68.662838 _____ 1.304594
8 _______ 22.56 _____ 67.147432 _____ 1.275802
9 _______ 25.38 _____ 65.603234 _____ 1.246462
10 ______ 28.20 _____ 64.029696 _____ 1.216565
11 ______ 31.02 _____ 62.426261 _____ 1.186099
12 ______ 33.84 _____ 60.792360 _____ 1.155055
13 ______ 36.66 _____ 59.127415 _____ 1.123421
14 ______ 39.48 _____ 57.430836 _____ 1.091186
15 ______ 42.30 _____ 55.702022 _____ 1.058339
16 ______ 45.12 _____ 53.940361 _____ 1.024867
17 ______ 47.94 _____ 52.145228 _____ 0.990760
18 ______ 50.76 _____ 50.315988 _____ 0.956004
19 ______ 53.58 _____ 48.451992 _____ 0.920588
20 ______ 56.40 _____ 46.552580 _____ 0.884500
21 ______ 59.22 _____ 44.617080 _____ 0.847725
22 ______ 62.04 _____ 42.644805 _____ 0.810252
23 ______ 64.86 _____ 40.635057 _____ 0.772067
24 ______ 67.68 _____ 38.587124 _____ 0.733156
25 ______ 70.50 _____ 36.500280 _____ 0.693506
26 ______ 73.32 _____ 34.373786 _____ 0.653102
27 ______ 76.14 _____ 32.206888 _____ 0.611931
28 ______ 78.96 _____ 29.998819 _____ 0.569978
29 ______ 81.78 _____ 27.748797 _____ 0.527228
30 ______ 84.60 _____ 25.456025 _____ 0.483665
31 ______ 87.41 _____ 23.119690 _____ 0.439275
32 ______ 90.23 _____ 20.738965 _____ 0.394041
33 ______ 93.05 _____ 18.313006 _____ 0.347948
34 ______ 95.87 _____ 15.840954 _____ 0.300979
35 ______ 98.69 _____ 13.321933 _____ 0.253117
36 _____ 101.52 _____ 10.755050 _____ 0.204346
37 _____ 104.34 ______ 8.139396 _____ 0.154649
38 _____ 107.16 ______ 5.474045 _____ 0.104007
39 _____ 109.98 ______ 2.758052 _____ 0.052403
40 _____ 112.80 ______ 0.000000 _____ 0

Monthly Payment MCr0.235


With a total of 112.8 payed, it's just a bit less than the 128 expected... and the payment is a bit different from the MCr0.416667 specified in CT...

So monthly compounding plus fees seems to be the order of the day.
 
Back
Top