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 Editing the Nominal Interest Group Box

Use

In the group box Nominal Interest, you edit those fields of a condition that are included in Amount Category 105010 Nominal Interest and for which the screen sequence 105012 is set in Customizing for condition types.

In this group box you define an interest with date updates determined on the basis of the interest calculation capital as well as calculation, calling, adjustment and fixing.

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 editing a condition with the Amount Category 105010 (Nominal Interest).

  • 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.

  • Enter an amount, a percentage, or a reference interest rate.

  • You can select an interest calculation method.

  • Choose Exponential Interest Calculation in the Interest Calculation field, you can make entries in the Interest Settlement Frequency field.

  • 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.

  • When you use a reference interest rate, you can define the maximum interest increase or reduction that is permitted from one interest adjustment to the next. To do so, enter the corresponding interest rate for the Maximum Increase or Maximum Reduction.

  • You can use a formula to calculate the percentage.

  • If you set the Due-Date Related Calculation checkbox, then the system includes flow records whose due dates lie inside or outside of the calculation period due to shortened or extended periods.

  • You can use the Capitalization checkbox to define whether an amount is to be capitalized.

  • You can use the Pro Rata Calculation field to control how the start period and end period are to be included in the calculation for shortened or extended periods.

  • If you have entered an interest rate, you can define an amount in the Base Amount field or chose a reference in the Base Reference field to which the percentage rate is to refer.

  • 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 enter an exchange rate.

Set the checkboxes Percentage-Based Reduction and Amount-Based Reduction in the dialog structure Amount Category in Customizing for condition types 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.

  • Enter 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 base 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 base by 10%. As a result, the calculation base is now EUR 450,000. EUR 10,000 are then deducted from this amount.

    The reduced calculation base 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 a 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 lesser than the interest rate that is defined here.

Result

You have defined a nominal interest.