Interest Calculation Methods and Types 

Use

You can use the following types of interest calculation in Leasing:

●      Linear interest calculation

The interest amount is calculated according to the following formula:

Amount = calculation base amount * percentage / 100 * interest calculation method

Interest calculated linearly is not capitalized in Leasing.

●      Exponential interest calculation

The interest amount is calculated according to the following formula:

Amount = calculation base amount * (q ** (interest calculation method) - 1)

Interest calculated exponentially is capitalized in Leasing.

 

You can also use various interest calculation methods to calculate interest using different calculation bases.

The calculation methods are always based on the specific number of days in the calculation period in relation to the defined number of days for the calendar year – that is, according to the quotient DAYS/DAY_BASE.

 

You can use the following interest calculation methods in Leasing:

●      360E/360

The system always assumes 30 days per month when calculating the interest between two dates; a year with 360 days is assumed.

●      act/360

The system uses the actual number of calendar days to calculate the interest between two dates; a year with 360 days is assumed.

●      act/365

The system uses the actual number of calendar days to calculate the interest between two dates; a year with 365 days is assumed.

●      act/actY

The system uses the actual number of calendar days to calculate the interest between two dates; the actual number of days in the calendar year is assumed.

●      365/365

The system uses the actual number of calendar days to calculate the interest between two dates; the extra day in a leap year (February 29) is not included in the calculation period. A year with 365 days is assumed.

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●      Act/ActE

The system uses the actual number of calendar days to calculate the interest between two dates; a calendar year with 366 days is assumed if the extra day in a leap year (February 29) is included in the calculation period, otherwise a calendar year with 365 days is assumed.

 

You should not use the following calculation methods in Leasing:

■       ActW/252

■       365.25/360

■       365/360

 

 

Activities

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You assign the interest calculation method in the master data in the financing product for each financing view.

For each condition in the payment structure it is possible to use a different interest calculation method to that which you want to use for the financing as a whole.