In a section of a personal PHP project, I would like to calculate the spending factor in a rule where we spend Nth time the previous payment done.

Here is an example of spending.


payment1:    10
payment2:    50       (=  10 x 5)
payment3:   250       (=  50 x 5)
payment4:  1250       (= 250 x 5)

At the end, we're getting the sum of all payments made and we have :

10 + 50 + 250 + 1250 = 1560

I would like to know the formula that let me retrieve the spending factor (=5 here) by only knowing these parameters:

paymentCount  = 4
initalPayment = 10 
totalPaid     = 1560

By knowing the formula to calculate the spendingFactor, I will then be able to know the amount and details of each payment.


The payment forms a geometric progression: if you call the initial payment $a$ and the spending factor $k$, then the total payment looks like:

$$T = a + ka + k^2 a + k^3 a + \ldots + k^n a$$

There's a short formula for computing this total, which is:

$$T = \frac{a(1-k^n)}{1-k}$$

We can rearrange this formula to put the unknown spending factor $k$ on one side:

$$\frac{T}{a} = \frac{1-k^n}{1-k}$$

If we define $g(k) \equiv \frac{1-k^n}{1-k}$, then what we are really searching for is $g^{-1}\left(\frac{T}{a}\right)$. Because $g$ is always increasing when $k$ is positive, $g$ has a well-defined inverse. I don't see a closed-form function for computing it, but I imagine $g$ is nice enough that since you have a computer, you can find the inverse numerically.

We know that $k$ is positive because it is a spending factor. Moreover, we know that $k$ is less than $\frac{T}{a}$, because a spending rate of $\frac{T}{a}$ would give you the entire total in the second payment.

So we can use binary search:

Define left=0, right=T/a, estimate = (right-left)/2.

Start the loop:

  1. If you think the estimate is good enough (e.g. if you've done enough iterations), return the estimate.
  2. Otherwise, compute $$y = \frac{1-x^n}{1-x}$$ where $x$ is the current estimate.
  3. If the result y is equal to T/a, return it. If it is less than T/a, replace left = y. If it is greater than T/a, replace right = y.
  4. The new esimate is (right-left)/2, with the updated values of left and right.
  • $\begingroup$ So the way of find k (spending factor) is by iterating a binary search tree since there is no direct formula? Okay... I will focus on it. Thank you $\endgroup$ – Jean F. Dec 7 '17 at 20:35

This means you're solving

$$T = \sum_{k=0}^{n-1} I \cdot F^k$$

where $T$ = totalPaid, $n$ = paymentCount, $I$ = initialPayment, and $F$ = spendingFactor.

We know that $$\sum_{k=0}^{n-1} I \cdot F^k = I \cdot \frac{F^n - 1}{F - 1}$$

Hence we're solving $$T = I \cdot \frac{F^n - 1}{F - 1}$$ for $F$.

Here's the bad news: Unless $n<5$, there is no way to find a solution without resorting to numerical methods. (This is because there is no general solution in radicals that applies to all equations of a given degree greater than $4$. It's called the Abel-Ruffini theorem, and it was proved in 1824).

But if $n<5$, here are the first few solutions (the $n=4$ case is beyond unwieldy):

$$n=1: F \, \text{could have been anything}$$

$$n=2: F = \frac{T-I}{I} $$

$$n=3: F = \frac{-I + \sqrt{4 I T -3 I^2}}{2 I} $$

(Considering how complicated these get, I'm not even sure having that having solutions for $n \geq 5$ would be helpful!)

  • $\begingroup$ unfotunatelly , most of the time, n (paymentCount) is above 20. thank you for the information. $\endgroup$ – Jean F. Dec 7 '17 at 20:41

Based on your responses, I've made a PHP code which gets an approximation of the spending factor. It's a modified method.

Getting the exact spending factor is too CPU intensive. So, I'm calculating a near approximation first. This value will always be above the solution. I then decrease that number until I'm getting below the total paid amount.

Here is a PHP sample of what I've done.

$paymentCount   = 4;
$initialPayment = 10; 
$totalPaid      = 1560;

//----- precalculate the factor based on total payment for faster computation
//----- this predefined factor will always be above our final factor

$estimatedSpendingFactor = exp(log($totalPaid) / $paymentCount);

//----- find the estimated spending factor

    $estimatedSpendingFactor -= 0.0001;

    $y = $initialPayment * (pow($estimatedSpendingFactor, $paymentCount) - 1) 
                         / ($estimatedSpendingFactor-1);
while ($y > $totalPaid);


printf("The spending factor is %f\n", $estimatedSpendingFactor);

the output will be :

The spending factor is : 5.000000

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