Specifying Exponential Interest Rate

4.2.16.7 Specifying Exponential Interest Rate

Table 4-8 Exponential Interest Rate

Field	Description
Rate Basis	This value gets defaulted from Bilateral Loans Product Definition screen. If required you can change the value. The following are the options available. Per Month - This option is used for fixed per month rate input as explained in product UDE maintenance. Per Annum /Not Applicable - This option is used for annual rate input. The value input is considered as resolved rate. Quote Basis - This option is used for float rate input for all quote basis other than Standard. Not Applicable – This option is meant for non-rate related UDE types. The resolved rate derived from fixed/float rate maintenance is converted to derived rate using the below formula for exponential method of calculation. DR = (((1+RR) ^1/YB-1) -1)*YB RR – Resolved Rate YB – Year Basis calculated as explained in float rate maintenance section. This is the final rate used for interest calculation and this derivation is done only for exponential type with exponential method of calculation. The derived rate calculation along with daily compounding is used to achieve exponential method of calculation.
Exponential Interest Method	This value gets defaulted from Bilateral Loans Product Definition screen. You are not allowed to change the value. If main interest component is of exponential method, then the system validates the interest basis maintained for penalty interest components are same as main interest component, during save/amend/rollover.
Exponential Factor Percentage	This value gets defaulted from Bilateral Loans Product Definition screen. The Exponential Factor Percentage is 100% for exponential interest and non-exponential interest method. In case of exponential interest method, you can change the Exponential Factor Percentage value. In case of non-exponential interest method an override appears saying for non-exponential interest method the factor percentage is considered as 100%.
Allow Reporting Only and Reporting Component Type	Allow Reporting Only and Reporting Component Type are defaulted from Interest Class Maintenance (LFDINTCL) screen and you cannot modify this fields as they are read-only fields. Note: If Allow Reporting only is enabled then the Component does not have any schedules and it is liquidated when the main interest is liquidated. For COSIF the accrual is always on a Actual/ 360 basis, for RAP the amount is deducted upfront and it is reverted during the accruals. COSIF and Main Component is always have the same amount due on the schedule dates which is achieved by adjusting the effective rate for COSIF using the below logic Rate_act360 =(((((?Rate?_bu252/100)+1)^( #budays /252))^(360/#days))-1)*100. For more information on accounting entries for reporting components, refer Event-wise Accounting Entries and Advices section.

Parent topic: Specifying the ICCF Details