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Procedure documentationEditing the Nominal Interest Group Box

 

In the group box Nominal Interest on the Calculation tab page, you edit the fields of a condition that are included in amount category 105010 Nominal Interest and for which the screen sequence 105012 is set up in condition type Customizing.

In this group box you define an interest rate that the system determines according to the interest calculation capital, and you also define its calculation.

Procedure

You can make the following settings:

  1. In the Condition Form field, you can enter the use for the condition.

  2. Use the Rounding Category and Rounding Unit fields to control how the system rounds the resulting amounts for the nominal interest.

    For more information, see Rounding a Numerical Value.

  3. Enter the following data:

    • Percentage

    • Interest Reference as a Markup or Markdown

    • Formula

    • Amount

    • Example Example

      The three-month EURIBOR is 4.733 % on 11/03/2008.

      • You want to define a markup of 2 % on the reference interest rate, so you enter 2.0. The system calculates the following interest rate: 4.733 - 2.0 = 2.733 %. 4,733 + 2,0 = 6,733 %.

      • You want to define a markdown of 2 % on the reference interest rate, so you enter -2.0. The system calculates the following interest rate: 4.733 - 2.0 = 2.733 %. 4,733 - 2,0 = 2,733 %.

      End of the example.

      You can enter a minimum and a maximum interest that the system uses if the reference interest rate is greater or lesser than the minimum or maximum interest rate.

      In the Maximum Increase and Maximum Decrease fields, you can enter the maximum interest increase or maximum interest decrease that can occur between two interest rate adjustments.

      For more information, see Interest Rate Adjustment.

    • You can use a formula to calculate the percentage.

      For more information, see Formula Editor for Financial Mathematics.

    • If you enter an amount, enter a condition currency in the header data of the condition or a payment currency.

      For more information about the dependencies of currencies in conditions, see Currencies in Conditions.

  4. The system calculates the interest according to the interest calculation capital. To change this, you can enter a fixed amount in the Basis Amount field, or you can enter a reference in the Basis Reference field. The system takes this entry into account during the interest calculation.

    Enter the following parameters for the interest calculation:

    • Enter an interest calculation method.

      If you have chosen the value actW / 252 in the Interest Calculation Method field, enter an interest calendar.

      For more information, see Interest Calculation Method.

    • In the Interest Calculation field, enter whether you want to use linear or exponential interest calculation.

      If you enter the value Exponential, you are entering an interest settlement frequency.

      For more information, see Interest Calculation.

    • If you select the Due-Date Related Calculation checkbox, the system includes flow records whose due dates are in the calculation period due to shortened or extended periods. If these due dates are not in the calculation period, the system ignores these.

    • If you select the Capitalization checkbox, the system capitalizes the interest amount.

  5. You can enter a payment currency that differs from the condition currency.

    When you enter a payment currency, you can enter a fixed exchange rate that the system uses for the validity period of the condition.

  6. In the condition type Customizing of your application, in the Amount Category dialog structure, you can select the Amount-Based Reduction or the Percentage-Based Reduction checkboxes. This enables you to enter a reduction as an amount, percentage, or interest reference by which the system is to reduce the calculation basis of the interest calculation.

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

    If you enter an interest reference reduction, you can specify a minimum or maximum percentage rate for the reduction.

Result

You have defined a nominal interest.

More Information

Amount Category 105010 - Nominal Interest

Editing the Calculation Tab Page