`src/lib/calculators/icr-calculator.ts`

85 lines
/**
 * ICR Plan Calculator (Income-Contingent Repayment)
 *
 * Key rules:
 * - Payment is the LESSER of:
 *   a) 20% of discretionary income (AGI - 100% of poverty guideline)
 *   b) Fixed 12-year payment adjusted by income percentage factor
 * - 25-year forgiveness (300 months)
 * - Only IDR plan available for Parent PLUS (after consolidation)
 * - Interest capitalizes if payment doesn't cover it
 * - No payment cap relative to Standard plan
 */

import { LoanInputs, PlanResult, MonthlySnapshot } from './types';
import { getDiscretionaryIncome, getPovertyGuideline, POVERTY_MULTIPLIERS } from './poverty-guidelines';

const ICR_PAYMENT_RATE = 0.20;
const FORGIVENESS_MONTHS = 300; // 25 years

export function calculateICR(inputs: LoanInputs): PlanResult {
  const { totalBalance, weightedRate, agi, familySize, state } = inputs;

  const povertyGuideline = getPovertyGuideline(familySize, state);
  const discretionaryIncome = getDiscretionaryIncome(
    agi, familySize, state, POVERTY_MULTIPLIERS.ICR
  );

  // Option A: 20% of discretionary income / 12
  const optionA = Math.max(0, (discretionaryIncome * ICR_PAYMENT_RATE) / 12);

  // Option B: 12-year fixed payment (amortized over 12 years × income percentage factor)
  // Simplified: use standard 12-year amortization
  const monthlyRate = weightedRate / 12;
  const optionB =
    monthlyRate > 0
      ? (totalBalance * monthlyRate) / (1 - Math.pow(1 + monthlyRate, -144))
      : totalBalance / 144;

  // ICR payment = lesser of the two options
  const monthlyPayment = Math.min(optionA, optionB);

  let balance = totalBalance;
  let totalPaid = 0;
  let totalInterest = 0;
  const schedule: MonthlySnapshot[] = [];

  for (let month = 1; month <= FORGIVENESS_MONTHS; month++) {
    const interestThisMonth = balance * monthlyRate;
    const payment = Math.min(monthlyPayment, balance + interestThisMonth);
    const principalPaid = payment - interestThisMonth;

    totalPaid += payment;
    totalInterest += interestThisMonth;

    if (principalPaid >= 0) {
      balance = Math.max(0, balance - principalPaid);
    } else {
      balance += Math.abs(principalPaid);
    }

    schedule.push({
      month,
      payment: Math.round(payment * 100) / 100,
      principal: Math.round(Math.max(0, principalPaid) * 100) / 100,
      interest: Math.round(interestThisMonth * 100) / 100,
      balance: Math.round(balance * 100) / 100,
    });

    if (balance <= 0) break;
  }

  return {
    planName: 'ICR',
    monthlyPayment: Math.round(monthlyPayment * 100) / 100,
    totalPaid: Math.round(totalPaid * 100) / 100,
    totalInterest: Math.round(totalInterest * 100) / 100,
    forgivenessAmount: Math.round(Math.max(0, balance) * 100) / 100,
    forgivenessMonths: FORGIVENESS_MONTHS,
    repaymentMonths: schedule.length,
    discretionaryIncome: Math.round(discretionaryIncome * 100) / 100,
    povertyGuideline,
    paymentSchedule: schedule,
  };
}