Show TOC

 Group Box Edit Nominal Interest Rate (CAP)

Use

In the group box Nominal Interest (CAP) , you edit those fields of a condition that are included in Amount Category 105010 Nominal Interest Rate and for which the screen sequence 105013 is set in Condition Type Customizing.

Prerequisites

The condition to be edited is based on a condition category that is permitted for the amount category Nominal Interest Rate . For more information, see Amount Category .

Procedure

You can make the following settings when you edit a nominal interest rate (CAP):

  • Choose the purpose for which the condition is to be used in the Condition Form field.

  • You use Rounding Category and Rounding Unit to define how you want to round the results. For more information, see Rounding Numerical Values.

  • You can select an interest calculation method.

  • Enter a maximum strike price.

  • Specify a reference interest rate .

  • You can define either relative or absolute markups on the reference interest rate, and define the minimum and maximum interest . For more information, see Markup Condition .

  • You can use a formula to calculate the percentage.

  • If you specify an interest rate , you can define an amount to which the percentage is to refer in the Base Amount field.

  • You can enter a payment currency that differs from the condition currency, which is then valid for all amount fields of the condition if no condition currency exists. If both currencies exist, then the condition currency is valid.

  • You can specify an exchange rate .

Set the indicators percentage-based reduction and amount-based reduction in the dialog structure amount category in Condition Type Customizing of your application. You can enter an amount or a percentage rate by which you want to decrease the calculation basis when determining an interest amount while you edit an interest condition.

  • Specify a percentage rate reduction and/or an amount reduction.

    If you use both methods of reduction, the system first uses the percentage-based reduction and then the amount-based reduction.

    Example Example

    The calculation basis is EUR 500,000. You enter 10 % for the percentage-based reduction and EUR 10,000 for the amount-based reduction.

    The system reduces the calculation basis by 10 %. As a result, the calculation basis is now EUR 450,000. EUR 10,000 are then deducted from this amount.

    The reduced calculation basis is EUR 440,000.

    End of the example.

  • If you want to use the percentage-based reduction for a Reference Interest Rate , use the input help to choose Reference Interest Rate in the Reference Interest Rate Reduction field .

    • You can define a percentage for Minimum and/or Maximum Interest Reduction The system uses this interest rate as the percentage reduction if the reference interest rate reduction is greater than or greater lesser the interest rate that is defined here.

Result

You have defined a nominal interest rate (CAP).