About Rate Conversion

• There should be a facility in the system to convert the rates to per annum.
• Based on the rate type being linear or exponential the conversion from per month rate to per annum rate should be done.

  Table 1-1 About Rate Conversion

  Rate Type	Conversion Formula
  Linear Rate Per Year	Rate Per Month * 12
  Exponential Rate Per Year	(1 + Rate Per Month) ^ 12 – 1

• Float rates can be based on multiple quote basis:
  • Exponential 252
  • Linear 360
  • Exponential 365
• Interest rate calculation based on the different quote basis.