Apache Fineract nop does not invert pmt for non-zero rates

Finding

The public FinanicalFunctions.nop() method is intended to calculate a number of payments, but its non-zero-rate branch repeats a payment-style expression with emiAmount in the exponent. It is not the algebraic inverse of the adjacent pmt() method.

Minimal counterexample

For end-of-period payments:

rate = 0.01
principal = 1000
future value = 0
periods = 12

Fineract's own payment function returns:

pmt(0.01, 12, 1000, 0, false) = -88.848788678342

The inverse should therefore recover 12. The independent closed form is:

N = log(PMT / (PMT + principal * rate)) / log1p(rate)

It returns 12.000000000, while Fineract returns:

nop(0.01, -88.848788678342, 1000, 0, false) = 7

Verification matrix

Terms 6, 12, 24, and 36 were tested at periodic rates 0, 0.001, 0.01, and 0.05.

• Zero-rate branch: 4/4 round trips passed.
• Non-zero-rate branch: 0/12 round trips passed.
• Environment: OpenJDK 26.0.2, macOS ARM64.
• Source baseline: commit 74099701987ccb4755706d9a3de9fbbd3576ea1b.

Proposed correction

Let d = (type ? 1 + rate : 1) and A = emiAmount * d. Solving the adjacent pmt() equation for the term gives:

growth = (A - rate * futureValue) / (A + rate * principal)
N = log(growth) / log1p(rate)

Because the existing API returns an integer number of payments, the computed term is rounded to the closest whole payment. A regression suite covering zero and non-zero rates, both payment timings, and a non-zero future value passes 33/33 round trips with the correction.

The focused implementation and regression tests are available in the public fork at commit `6980e1377ce2e5a1eaf0586e628b27bb64dd8c26`. The full Gradle target could not be run locally because this checkout requires JDK 25 while the available runtime is JDK 26; the corrected source compiled and the direct round-trip harness passed.

Duplicate and impact checks

• Repository-wide search found no call site for FinanicalFunctions.nop(); only the declaration exists across 6,773 Java files. The sole external reference to the class is a call to FinanicalFunctions.pmt() from LoanApplicationTerms.java.
• The repository uses ASF JIRA rather than GitHub issues. Targeted public searches found no matching report.

Upstream status

Apache registered the finding as FINERACT-2809 and marked it fixed for Fineract 1.16.0 on 7 September 2026. The correction and regression tests are now in upstream develop as commit `e7bdad1`. The commit credits "Xamit Kadirbekov / GERO Research", and the maintainer's JIRA resolution comment states: "Fix belongs to Xamit Kadirbekov".

Boundary

This is a dormant public-library defect. Because the current repository has no nop() call site, it is not evidence of an incorrect real loan schedule, customer impact, data loss, or a security vulnerability.