Recalculate Every Time

Various events may cause the system to recalculate historic penalty and interest:

For normal requests from the system to "bring P&I up to date", where historical calculations are not affected, the system still recalculates the P&I from the beginning every time.

One reason for this logic is to ensure that P&I is always accurate. It could be that something has changed in the system that does affect historical calculations and a request to recalculate historical P&I was not performed. The next time P&I runs, recalculating from the beginning ensures that the latest calculation reflects the correct charge.

Another important reason to recalculate P&I from the beginning every time P&I is brought up to date is to avoid rounding issues that may occur over time.

Consider the following example.

Over time these rounding differences add up. To avoid that the system calculates from the beginning every time P&I is calculated and the running total is kept throughout the calculations.