Editing Simple Interest Rates
This procedure describes how you define a simple interest rate. A simple interest rate is made up of only one condition item and does not have tiers or intervals.
Prerequisites
You have made all necessary settings so that the fields for creating a simple interest rate are available.
For more information about the required settings, see the decision table in the documentation for each amount category that is relevant for the interest rate.
The system displays condition editing on the
Calculation
tab page.
Procedure
You can make the following settings:
In the
Tiers/Interval
field, enter the value No Tiered or Interval Calculation.If you use condition determination, enter the value No Tiers for Condition Determination in the
Tiers for Condition Determination
field.Enter a percentage rate or an interest reference.
You can enter absolute or relative markups or markdowns that refer to the reference interest rate.
ExampleOn November 3, 2008, the three-month EURIBOR is 4.733 %.
You want to define an absolute markup of 2 % on the reference interest rate, so you enter 2.0. The system calculates the following interest rate: 4.733 + 2.0 = 6.733%.
You want to define an absolute 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%.
You want to define a relative markdown of 10 % of the reference interest rate, so you enter 90. The system calculates the following interest rate: 4.733 x 0.9 = 4.2597%.
You want to define a relative markup of 10 % of the reference interest rate, so you enter 110. The system calculates the following interest rate: 4.733 x 1.1 = 5.2063%.
End of the example.You can enter a minimum or a maximum interest that the system uses if the reference interest rate is greater or lesser than the minimum or maximum interest rate.
You can use a formula to calculate the percentage.
For more information, see Formula Editor for Financial Mathematics.
Result
You have defined a simple interest rate.