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  Edit Tier, Interval and Mixed Tier/Interval

Use

The section Procedure describes how you define an interest rate with tiers or intervals.

By setting scale and interval conditions, you can automatically adjust conditions according to the actual scope of business of the customer relationship. You can scale interest dependent on balances or turnover. You can scale charges, such as item charges or dispatch expenses, dependent on a counter reading. In addition to this, you can use the settings on the Condition Determination Tab Page to determine the balance that forms the basis for determination of conditions yourself. In most cases you can decide whether you want to link the scale to upper limits (up to this limit inclusive) or to lower limits (from this limit inclusive).

You can use tiered or interval calculation as follows:

  • The Tiered Calculation setting means that one condition that is valid for settlement is determined on the basis of a balance or an item counter. This condition is used for the whole balance or calculation basis.

  • The Interval Calculation setting means that a condition is determined on the basis of a balance or an item counter for each balance for the period to be settled. The individual conditions are used for the relevant part of the balance.

  • The Mixed Tiered and Interval Calculation setting means that you can mix tiers and intervals. Interval calculation is used for the balance in the last tier.

  • In the case of amount-dependent charges (transaction charge) you also have the option of automatic amount-dependent scaling.

The following graphic shows the difference between a scaled condition and an interval condition:

Prerequisites

You have selected the Calculation Tab Page in Condition Editing.

The fields with which you create interest rates for tiered calculation, interval calculation or mixed tiered/interval cal calculation are available if you make certain settings in the following fields:

  • Condition determination in Condition Type Customizing in your application.

  • Period of Use and Determination Period on the Condition Determination Tab Page .

  • Tiered or interval calculation on the Calculation Tab Page

  • Tiers for Condition Determination on the Calculation Tab Page

For more information about specific settings in the fields, see Decision Table for Specifying the Interest Rate in the documentation about each Amount Category that relates to the interest rate.

Procedure

Basic Data about Interest Calculation

Here you edit the fields that pertain to the basic settings for interest calculation and which are available for each interest rate.

You can make the following settings:

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

  • Choose Interest Calculation Method .

  • 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 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. The contract currency is preferred, if you set the indicator Amount Limits in Contract Currency condition type Customizing in your application

  • If you choose the value x- exponential in the Interest Calculation field, you can make entries in the Interest Settlement Frequency field.

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 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 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 .

Specify an Interest Rate for Tiered or Interval Calculation.

Here you edit the fields that characterize an interest rate for tiered or interval calculation .

  1. Use the input help to choose Tiered Calculation or Interval Calculation in the Tier/Interval field. The system then displays the Upper/Lower Limit field and the input screen for tiered or interval calculation.

    • If you choose Upper Limit in the Upper/Lower Limit field, then you can enter values on the input screen as the upper limit for tiered or interval calculation. The tier or interval is then valid up to this value.

    • If you choose Lower Limit in the Upper/Lower Limit field, then you can enter values on the input screen as the lower limit for tiered or interval calculation. The tier or interval is then valid from this value.

  2. You are on the input screen for individual tiers or intervals.

    • If you define charge conditions, you can enter a fixed amount for each tier or interval.

    • If you define interest conditions, you can enter the following values for each tier or interval: The fields for each tier/interval are the same as those used to specify a simple interest rate .

      • Percentage Rate

      • Reference interest rate

      • An absolute or relative markup/-down on the reference interest rate

      • Minimum interest in relation to the reference interest rate

      • Maximum interest in relation to the reference interest rate

      • Interest rate to be determined using a formula

Specification of Interest Rates for Mixed Tier/Interval Calculation.

  1. Use the input help to choose Mixed the Tier/Interval field. The system then displays the Upper/Lower Limit field and the input screen for mixed tiered and interval calculation.

  2. You enter the individual tiers or intervals in the same way as for normal tiered or interval calculations. The same fields are available.

    The difference is that the system processes the amounts in the last tier in the same way as in interval calculation.

Defining an Automatic Scale Condition

  1. Use the input help to choose Automatic Scaled Calculation the Tier/Interval field.

    Note Note

    AutomaticScaled Calculation is only available for conditions whose conditions have the condition type Amount Category 115050 Charge on Amount .

    End of the note.

  2. Specify the amount. This charge amount is valid for the first scale.

  3. In the Additional Scale field, you enter the scaled amount that is to be added to the total amount of the previous scale.

  4. Enter the amount limit for the scale amount. This defines the size of the first scale and the increment for each additional scale.

  5. You can also define a Minimum Amount and a Maximum Amount .

Result

You have defined an interest rate with tiered calculation, interval calculation or mixed tiered/interval calculation .

Example

The following settings are defined for a tiered condition:

Condition details for tiered condition

Tier

Upper limit

Int. Rate

1

EUR 1,000

10%

2

EUR 2,000

12%

3

EUR 4,000

14%

4

EUR 6,000

16%

A balance of EUR 4,500 produces the following results :

Total balance

Int. Rate

EUR 4,500

16%
The following settings are defined for an interval condition:

Condition details for interval condition

Interval

Upper limit

Int. Rate

1

EUR 1,000

10%

2

EUR 2,000

12%

3

EUR 4,000

14%

4

EUR 6,000

16%

A balance of EUR 4,500 produces the following results:

Sub-Balance

Int. Rate

EUR 1,000

10%

EUR 1,000

12%

EUR 2,000

14%

EUR 500

16%
The following settings are defined for a mixed tiered/interval condition:

Condition details for mixed tiered and interval condition

Tier

Upper limit

Int. Rate

1

EUR 1,000

10%

2

EUR 2,000

12%

3

EUR 4,000

14%

4

EUR 6,000

16%

A balance of EUR 4,500 produces the following results:

Sub-Balance

Int. Rate

EUR 4,000

14%

EUR 500

16%