1.1.13.5 Exponential Calculation for Discounted Normal Contract

• For discounted loans daily compounding interest is supported.
• The total interest derived is based on the true discounted formula and the accruals are done on the discounted principal with daily compounding.
• Existing discounted schedule formula is to be set up with compound days as 1.
  • Formula type - Discounted schedules
  • Interest Booking formula - DISC_SCH(PRINCIPAL_EXPECTED,(INTEREST_ RATE),DAYS,YEAR,COMPOUND_VALUE)
• When the discounted schedule formula is maintained with COMPOUND_VALUE, the interest is calculated based on PV
  • PV = P/(1+r)^(DAYS/YEAR)
    Where,

    • r - Main Interest rate
    • P - Principal
    • DAYS - Number of days
    • YEAR - Denominator basis of Main Interest component
    • All the values are considered as on loan account value date.
• VAMI is not allowed for discounted loans with Exponential Interest Method check box in main interest component selected.
• Only bullet principal payment schedule is allowed for discounted exponential loan.
• For an exponential discounted loan, floating rate codes are not allowed.