1 Reply Latest reply on Feb 19, 2014 5:46 AM by mikebeargie

    Interest Rate Calculations - I believe compounding

    hjvanes

      Dear FM PPL,

       

      I have attempted this but am not quite sure how I am meant to get the results to achieve a proper amount.

       

      A simple Interst calculation after it becomes due is pretty easy as a once off. Ie..total amount 100 and payable within 30 days. After 30 days interest would kick in for say 10% per annum.

       

      However it hit me in the head that this will not cater for part payment in which case interest will keep running after the 30 days on that which is still outstanding.

       

      So $100.

      part payment with 30 days of $50

      on day 31 outstanding is $50

      Penatlty interest per annum after 30 days is 10% = => $50+$5 = $55 ourtstanding

      part payment $25 on outstanding of $55 => 55 - 25 = $30

      after 60 days 10% should be applied to $30 dollars = $3

      full payment of $33 finally received

       

      Total accumulated pay is 100+5+3 = $108

       

      The calculation I am trying to obtain is one for calculation of interest after so many days overdue on outstanding amount but more importantly on accumulated total amount paid.

       

       

      Any help would be greatly appreciate and thank you in advance.

       

      regards,

      HJ

        • 1. Re: Interest Rate Calculations - I believe compounding
          mikebeargie

          It sounds like you should make your system transactional instead of attempting an unstored calculation.

           

          So you could (IE via a daily server scheduled script) run a script that calculates current interest on outstanding balances based on the origination date, and adds records against the balance.

           

          So your transactions table using your above example would be:

           

          +$100 in record 1

          -$50 in record 2

          +$5 for interest in record 3

          -$25 in record 4

          +$3 for interest in record 5

          -$33 in record 6

           

          From what I've worked on before, transactional is actually preferred in finance areas, as it gives you a static paper trail of anytime something was added or subtracted from a balance.