Imputed Annuity Repayment Calculation
If you opt for this method, the condition-based calculation of the repayment amounts for an annuity loan (which may have additional installment repayment conditions) is based on the assumption that the contract capital of the loan was disbursed at the start of the annuity repayment period (or at the start of an earlier condition-based installment repayment period). Disbursements entered in the cash flow and non-condition-based extraordinary repayments are not considered.
However, the interest payments must be calculated on the basis of the actual payments, rather than the fictitious disbursement amount. These include the disbursements, extraordinary repayments and the scheduled repayments.
As for the standard annuity calculation, the imputed annuity repayment calculation does not generate condition-based annuity and installment repayments in the cash flow if they would result in "overrepayment" of the loan. The cash flow calculator only generates condition-based repayments until the outstanding balance is cleared.
The following example for an annuity loan illustrates that, in certain cases, the imputed annuity repayment calculation even generates condition-based annuity repayments (as well as installment repayments and condition-based extraordinary repayments) before the date of the first disbursement. The payments are also settled according to the conditions.
Example
Annuity loan: Imputed annuity repayment calculation
Commitment capital 1 000 000.00 USD
Disbursement rate: 100%
Fixed Interest Period : 10/01/ YYYY - 12/31/YYYY
Quarterly interest payments (payment at the end of the quarter) and annuity repayment from the start of the fixed-interest period.
Repayment settlement at the end of each repayment period
First partial disbursement of 500 000.00 on 04/01/YYY+1
In the cash flow for the periods 10/01/YYYY - 12/31/YYY and 01/01/YYY+1 - 03/31/YYY+1 the system displays annuity repayments, but no interest flows. When the interest for the period 04/01/YYY+1 - 06/30/YYY+1 is calculated, the first two annuity repayments (settled on 12/31/YYYY and 03/31/YYY+1) are included in addition to the disbursement of 04/01/YYY+1. These payments would usually be withheld from the first disbursement
Cash flow after the first disbursement on 04/01/YYY+1:
Due on /Pmnt date |
Amount in PC |
Pos. Crcy. |
FType |
Description |
P |
Calc. from |
Calc. to |
12/31/YY |
12 500.00 |
USD |
0125 |
A_Annuity rep. debit pos. Rec. |
A |
10/01/YY |
12/31/YY |
12/31/YY |
12 500.00 |
USD |
3330 |
A_Scheduled repayment withheld |
A |
10/01/YY |
12/31/YY |
03/31/Y+1 |
12 656.25 |
USD |
0125 |
A_Annuity rep. debit pos. Rec. |
A |
01/01/Y+1 |
03/31/Y+1 |
03/31/Y+1 |
12 656.25 |
USD |
3330 |
A_Scheduled repayment withheld |
A |
01/01/Y+1 |
03/31/Y+1 |
04/01/Y+1 |
500 000.00 |
USD |
0001 |
Loan disbursement |
A |
||
06/30/Y+1 |
5 935.55 |
USD |
0110 |
A_Interest debit pos. Rec. Receivable |
P |
04/01/Y+1 |
06/30/Y+1 |
06/30/Y+1 |
12 814.45 |
USD |
0125 |
A_Annuity rep. debit pos. Rec. |
P |
04/01/Y+1 |
06/30/Y+1 |
09/30/Y+1 |
5 775.37 |
USD |
0110 |
A_Interest debit pos. Rec. Receivable |
P |
07/01/Y+1 |
09/30/Y+1 |
09/30/Y+1 |
12 974.63 |
USD |
0125 |
A_Annuity rep. debit pos. Rec. |
P |
07/01/Y+1 |
09/30/Y+1 |
Note
If you use the normal annuity calculation method, neither repayments nor interest payments are shown in the cash flow before the first disbursement. There is consequently a significant difference in the partial disbursement phase between the start of the term and full disbursement, depending on whether you use the standard or imputed annuity calculation.
You can only use the imputed annuity repayment calculation if annuity repayment has been defined for the loan and at least one disbursement has been entered (or simulated)