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Step 5 Rounded Result: $3.40
MIFOSX-412 Testcase Example
Account Activity
The transactions throughout the month on the Account:
| Transaction | Date | Amount | Balance(EOD) | Number of Days | Cumulative Balance |
|---|---|---|---|---|---|
| Account Activated | 26th Jan 2012 | 0 | 0 | - | 0 |
| Deposit | 26th Jan 2012 | 100,000 | 100,000 | 1 | 100,000 |
| Withdrawal | 27th Jan 2012 | 100,000 | 0 | 5 | 0 |
| 6 Days | 100,000 |
Compounded Daily on Daily Balance
Nominal Annual Interest Rate: 12% (r=0.12)
Compounding period: Daily (365 in year) (1/365=0.0027397260273973)
Periodic interest rate i = 0.12 x 0.0027397260273973 = 0.0003287671232
Posting/Crediting period: monthly crediting period (n=12)
The formula is: Interest = Balance x periodic interest rate x Number of Days
The Balance in this case is always the end of day blance plus and cumulative interest earned in the compounding periods before hand (which in this case is previous days).
| Date | Starting Bal | End Of Period Bal | Days | Interest Earned (this period) | Total Interest Compounded |
|---|---|---|---|---|---|
| 26th Jan | 0 | 100,000 | 1 | 100,000 x 0.0003287671232 = 32.87671232 | 32.87671232 |
| 27th Jan | 100,000 | 0 | 1 | 0 + (32.87671232) x DR = 0.0108087821297204 | 32.887521102 |
| 28th Jan | 0 | 0 | 1 | 0 + (32.887521102) x DR = 0.0108123357018838 | 32.898333437 |
| 29th Jan | 0 | 0 | 1 | 0 + (32.898333437) x DR = 0.0108158904421569 | 32.909149327 |
| 30th Jan | 0 | 0 | 1 | 0 + (32.909149327) x DR = 0.010819446351197 | 32.919968773 |
| 31st Jan | 0 | 0 | 1 | 0 + (32.919968773) x DR = 0.010823003429333 | 32.930791776 |
| 800 | 31 | Total interest earned = 32.93 credited on 1st Feb 2013 | =32.93 (0.000791776 dropped) |