Intraday Interest Calculation 

Use

Intraday interest calculation is a special type of interest calculation for which interest is calculated for time periods within one day.  The smallest unit for which interest can be calculated is one second. For this reason this type of interest calculation is called to the second interest calculation or intraday interest calculation.

The system determines the actual number of days and seconds (according to calendar days) between two dates. The calculation within one day is based on seconds. One day has 86400 seconds.

The period between 01/01/03 10:45:22 AM and 02/18/03 01:31:11 PM is made up of 48 days and 9,949 seconds.

You can only use interest calculation methods that are determined according to calendar days (actual) for intraday interest calculation. The interest rate is specified as an annual percentage rate.  

A fraction of a day is represented by the quotient Seconds / 86400 in the interest formula.

The formula for linear, intraday interest calculation is as follows:

 

 

 

The formula for exponential , intraday interest calculation is as follows:

 

 

 

           

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Prerequisites

Use only the day method act for intraday interest calculation. For more information about the day method act, see the section Scope of Functions under Determining the Days Between Two Calendar Dates.

For intraday interest calculation, the calling system must supply balances that possess a date as well as a time of day. You can use more than one interest rate within one day; the time of day plays a part in this. 

The following applies for time period specifications: The beginning of the time period is inclusive and the end of the period is exclusive.

Example

In the following example linear interest calculation is used with the interest calculation method act/365. The settlement period for an account is from 06/21/06 12:00:00 AM to  06/22/06 04:00:00 PM.

The balance of the account on 06/21/06 at 12:00:00 AM is EUR 100,000,000. Debit interest, but no credit interest, has been calculated for the account.

The following values exist:

Date	Time	Debit Interest Rate
06/21/06	00:00:00 AM	10.0 %
06/21/06	04:00:00 PM	13.0 %
06/22/06	03:00:00 AM	11.0 %
06/22/06	02:00:00 PM	14.0 %

 

The following values exist:

Date	Time	Turnover	Balance
06/21/06	04:00:00 PM	400,000,000 D	500,000,000 D
06/21/06	08:15:00 PM	200,000,000 D	700,000,000 D
06/21/06	10:00:00 PM	400,000,000 C	300,000,000 D
06/22/06	05:45:00 AM	180,000,000 D	480,000,000 D

 

This results in the following interest amounts:

·         10.0% interest is calculated for the balance of 100,000,000 D for 16 hours on 06/21/06 at 12:00:00 AM The result is an interest amount of EUR 18,264.84.

·         13.0% interest is calculated for the balance of 500,000,000 D for 4 hours and 15 minutes on 06/21/06 at 04:00:00 PM The result is an interest amount of EUR 31,535.39.

·         13.0% interest is calculated for the balance of 700,000,000 D for 1 hour and 45 minutes on 06/21/06 at 08:15:00 PM The result is an interest amount of EUR 18,179.22.

·         13.0% interest is calculated for the balance of 300,000,000 D for 5 hours on 06/21/06 at 10:00:00 PM. The result is an interest amount of EUR 22,260.27.

·         11.0% interest is calculated for the balance of 300,000,000 D for 2 hours and 45 minutes on 06/22/06 at 03:00:00 AM The result is an interest amount of EUR 10,359.59.

·         11.0% interest is calculated for the balance of 480,000,000 D for 8 hours and 15 minutes on 06/22/06 at 05:45:00 AM The result is an interest amount of EUR 49,726.03.

·         14.0% interest is calculated for the balance of 480,000,000 D for 2 hours on 06/22/06 at 02:00:00 PM. The result is an interest amount of EUR 15,342.47.

A credit interest amount of EUR 165,667.81 is debited to the account for the settlement period dating from 06/21/06 12:00:00 AM to 06/22/06 04:00:00 PM.

The interest amount of EUR 31,535.39 is used for this example. You use the liner interest formula in the following manner to calculate this interest amount: