Daily DAX : Day 171 CUMPRINC

 The CUMPRINC function in Power BI's DAX (Data Analysis Expressions) language is a financial function that calculates the cumulative principal paid on a loan between two specified periods. It’s particularly useful for financial analysis, such as tracking loan repayments over time or understanding how much of a loan’s principal has been paid off by a certain point.

Syntax

CUMPRINC(rate, nper, pv, start_period, end_period, type)

Parameters:

    rate: The interest rate per period (e.g., annual rate divided by 12 for monthly payments).

    nper: The total number of payment periods in the loan term.

    pv: The present value, or the initial loan amount.

    start_period: The first period in the range for which you want to calculate the cumulative principal (must be greater than 0).

    end_period: The last period in the range (must be greater than or equal to start_period and less than or equal to nper).

    type: The timing of the payment:

        0 (default): Payments are due at the end of the period.

        1: Payments are due at the beginning of the period.

Return Value:

The function returns the cumulative principal paid between start_period and end_period. The result is a negative number because it represents money paid out (a cash outflow).

Use Case

CUMPRINC is commonly used in financial modeling and reporting to:

    Track how much of a loan’s principal has been repaid over a specific time frame.

    Analyze amortization schedules to understand the principal reduction over time.

    Compare principal payments across different loan scenarios (e.g., varying interest rates or terms).

Example Scenario

Suppose you have a $10,000 loan with a 6% annual interest rate, paid monthly over 3 years (36 months). You want to calculate how much principal is paid between months 1 and 12.

DAX Formula

CumulativePrincipal = CUMPRINC(0.06/12, 36, 10000, 1, 12, 0)

    rate = 0.06/12 = 0.005 (6% annual rate divided by 12 months).

    nper = 36 (total number of monthly payments).

    pv = 10000 (loan amount).

    start_period = 1 (starting at the first month).

    end_period = 12 (ending at the 12th month).

    type = 0 (payment at the end of the period).

Result

The function returns approximately -2,904.21. This means $2,904.21 of the principal is paid off in the first 12 months. The negative sign reflects the cash outflow from the borrower’s perspective.

Practical Application in Power BI

    Loan Amortization Dashboards: Use CUMPRINC in a calculated column or measure to show cumulative principal paid over time. Pair it with visuals like line charts to track progress.

    Scenario Analysis: Adjust rate, nper, or pv dynamically (e.g., with slicers) to see how changes affect principal repayment.

    Comparison with Interest: Combine CUMPRINC with CUMIPMT (cumulative interest paid) to break down total payments into principal and interest components.

Example Measure

TotalPrincipalPaid = 

CUMPRINC(

    0.06 / 12,  // Monthly interest rate

    36,         // Total periods

    10000,      // Loan amount

    1,          // Start period

    12,         // End period

    0           // Payment at end of period

)

Key Notes

    Ensure all periods are integers and within the loan term (1 <= start_period <= end_period <= nper).

    The function assumes a fixed interest rate and equal payments (like a standard fixed-rate loan).

    If parameters are invalid (e.g., start_period > end_period), it returns an error.

In summary, CUMPRINC is a powerful tool for financial analysts working in Power BI to dissect loan repayment schedules and provide insights into principal reduction over time.