1. User Guide
  2. Run Management
  3. Run Definition Parameters
  4. Run Parameters
  5. Approximate Interest

9.1.3.12 Approximate Interest

When the Run type is selected as Contractual and when Include Interest Cash Flows are selected as Yes, Approximate Interest selection is allowed in the Run Definition window. Select either of the following options:

  • Yes – When Approximate Interest is selected as Yes, the business assumption is applied only to the principal cash flows and the interest cash flows are approximated based on changes to the principal.
  • No – In case you select No, the business assumption values are applied to both principal and interest cash flows. However, this application depends on the manner in which the business assumption is defined as follows:
    • If you have selected Cash Flow Type as a dimension in the business assumption and the dimension member as Principal, then assumption is applied only to the principal cash flows.
    • If you have selected Cash Flow Type as a dimension in the business assumption and the dimension member as Interest, then assumption impacts only Interest cash flows.
    • If you have selected Cash Flow Type as a dimension in the business assumption and the dimension member as Principal and Interest, then assumption is applied to both principal and interest cash flows.
    • If you have not selected Cash Flow Type as a dimension in the business assumption, then assumption is applied to both principal and interest cash flows.