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## Financial Mathematics
(CA-FIM-FMA)

### Purpose

### Implementation
Considerations

### Integration

### Features

This component provides financial mathematical functions that you need for the calculation of interest and effective interest. In addition, this component contains numerous general functions that are also useful in other situations.

At the center of the *Financial Mathematics* (**FiMa**) is the generation of payment flows that the system calculates on the basis of
the conditions of a financial transaction and market data. These types of
payment flows go into the calculation of interest and effective interest, but are also used by components for specific industries, for example, for
overall bank controlling. There the payment flows are used, for example, to
analyze the incoming and outgoing payments of a financial transaction over a
long period of time that reaches into the future, and to estimate the related
market risks.

Furthermore, financial mathematic methods are used in loans and securities management, money market trading , derivatives, leasing contracts, checking accounts, and other applications.

The *Financial Mathematics* component is available for all applications. This guarantees the standardized and consistent calculation
of interest and effective interest.

The following chart shows the relationships between the main functions of financial mathematics:

The component *Financial Mathematics *does not have its own Customizing for IMG activities. However, you can store your own formulas for determining an interest rate in Table AT30.
You can use these formulas when you edit conditions.

The functions of the *Financial Mathematics* component are implemented as function modules and are available across all
applications. Because the function modules belong to a single software level
they can be used by other components without restrictions.

The FIMAtransaction is available for testing some
financial mathematical methods.
You can include the FIMA transaction in the area
menu manually. It is not included in the area menu of the standard system
(*SAP
Easy Access *screen).

The *Financial Mathematics* component includes the following functions:

●
**Interest
Calculation**

The system calculates interest amounts based on parameters. These include the relevant periods, interest rates and interest calculation methods. For example, checking accounts call up interest calculation for each period settlement.

For more information, see Interest Calculation.

●
**Cash Flow
Calculation**

The system generates payment flows, adjusts reference interest rates, and calculates interest and repayment.

For more information, see Cash Flow Calculation.

●
**Effective Interest
Calculation**

The system calculates the effective interest of a transaction based on the payment histories that the calling application transfers from the payment flows. For example, effective interest calculation determines the cost of a loan and enables a comparison of the costs of different financial transactions.

For more information, see Effective Interest Calculation.

●
**General
Functions**

Financial Mathematics provides general functions for different financial mathematical areas. These include determination of the number of days in a period, the rounding of numerical values, and the execution of the numerical iterative procedure.

For more information, see General Functions.

Note that the documentation in the SAP Library does not describe the
components of *Financial Mathematics* in detail. It addresses only the basics of financial mathematics and the
relevant processes for calculation within the component.

For more information about individual functions, see the system documentation for the function modules. There is documentation about the calling of financial mathematical functions and the corresponding Customizing settings in the respective applications.

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