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Info

title	Savings Account Activation Info

When an account goes active (for the first time) several things happen.

account activation date is set.
The next interest calculation date is determined - in this case as interest calculation occurs every 1 months on end of month, the valid set of interest calculation dates are highlight in the table below.
The next interest posting date is determined - in this case, occurs every 3 months on end of month, the valid set of interest posting dates highlighted below beside the possible interest calculation dates
It is only through interest posting that interest is actually compounded on the account.
Schedules are generated with mandatory/recommend amounts to track payments by group/individual clients.

Possible Interest Calculation and Posting Dates

Date	Note
Jan 31 2010	possible next calculation date
Feb 28 2010	possible next calculation date
Mar 31 2010	possible next calculation date and posting date
Apr 30 2010	possible next calculation date
May 31 2010	possible next calculation date
Jun 30 2010	possible next calculation date and posting date
July 31 2010	possible next calculation date
August 31 2010	possible next calculation date
September 30 2010	possible next calculation date and posting date
October 31 2010	possible next calculation date
November 31 30 2010	possible next calculation date
December 31 2010	possible next calculation date and posting date

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Info

title	Calculation periods where first deposit occurs are handled is slightly special way.

Strictly speaking, the 'calculation period' is monthly so is from 1st of July to 31st of July 2010. However the account was only created on the 19th of July.

The '

average

minimum balance' is NOT calculated from the account creation date - 19 July 2010.
The '

average

minimum balance' is NOT calculated from the account activation date - 20 July 2010.
The '

average

minimum balance' is calculated from the first day of activity that results in a non-zero balance which is - 25 July 2010.

Info

title	Average Minimum balance worked out for july

Given the average Minimum balance equation shown above:

Starting from 25th of July:

25th of July to 31st July =

6 days duration (not including the 25th itself)25th of July to 31st July = 1000

1000 is the Minimum balance for duration
P (July) =

(

1000

* (25 to 31 July) /

(

25 to 31 July) =(1000 * 6) / 6 = 1000 (

since the P >= 1000, interest should be calculated)
r (July) = interest / 100 * (25 to 31 July) / (Number of Days in current financial year) = (10 / 100) * (6 / 365) = 6 / 3650
I (July) = P (r) = 1000 (6 / 3650) = 1.64 (rounding up to 2 decimal)

This interest is not posted (as its not due to be posted) but is instead stored in a interest to be posted column on savings_account. The next interest calculation date is upated to end of 1 month from last (Aug 31 2010) leaving the account looking like the following for July.

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Date	Activity	Amount	Total Balance	Interest To Be Posted	Next Calculation Date	Next Posting Date	Note
1st August 2010		0	1000	1.64	31 August 2010	30 September 2010	balance brought over from July
10th August 2010	Deposit	500	1500	1.64	31 August 2010	30 September 2010	deposit of 500
30th August 2010	Withdrawal	1000	500	1.64	31 August 2010	30 September 2010	withdrawal of 1000
31st August 2010	Deposit	1000	1500	1,64	31 August 2010	30 September 2010	deposit of 1000

Panel

Interest Calculation Period is from 1st August to 31 August = 31 days duration
For 10 days the balance was 1000, for 20 days it was 1500 and for 1 day it was 1st August to 31 August the minimum balance was 500: thus

P (Aug) = ((1000 *10) + (1500 * 20) + (500 * 1)) / 31 = (10000 + 30000 + 500) / 31 = 40500 / 31 ( >= 1000)r (Aug) = (10 / 100) * (31 / 365) = 31 / 3650500 ( which is not >= 1000, hence no interest will be calculated of this duration)

I (Aug) = P (r) = 40500 / 31 * (31 / 3650) = 11.100

Calculated interest from this period, 11.10 is added to previously calculated interest (1.64) resulting in 12.74 interest for July and August. The interest is still not compounded.

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Date	Activity	Amount	Total Balance	Interest To Be Posted	Next Calculation Date	Next Posting Date	Note
1st August 2010		0	1000	1.64	31 August 2010	30 September 2010	balance brought over from July
10th August 2010	Deposit	500	1500	1.64	31 August 2010	30 September 2010	deposit of 500
30th August 2010	Withdrawal	1000	500	1.64	31 August 2010	30 September 2010	withdrawal of 1000
31 August 2010	Deposit	1000	1500	1.64	31 August 2010	30 September 2010	deposit of 1000
31 August 2010	Interest Calculated	11.10 0	500 1500	12 1.74 64	30 September 2010	30 September 2010

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Date	Activity	Amount	Total Balance	Interest To Be Posted	Next Calculation Date	Next Posting Date	Note
01st September 2010		0	500 1500	12 1.74 64	30 September 2010	30 September 2010	balance brought over from August
15th September 2010	Deposit	1000	1500 2500	12 1.74 64	30 September 2010	30 September 2010	deposit of 1000
25th September 2010	Withdrawal	500	1000 2000	12 1.74 64	30 September 2010	30 September 2010	withdrawal of 500

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Panel

Interest Calculation Period is from 1st September to 30 September = 30 days duration
For 15 days the balance was 500, for 10 days it was 1500 and for 5 days it was 1000September 1 to September 30 the minimum balance was 1500: thus

P (Sept) = ((500 * 15) + ( 1500 * 10) + (1000 * 5)) / 30 = ( 7500 + 15000 + 5000) / 30 = 27500 / 30 ( is not >= 1000) so no interest should be calculated
r (Sept) = (10 / 100) * (30 / 365) = 3 / 365
I (Sept) = P (r) = 0 because of minimum balance condition1500 * 3 / 365 = 12.33 (rounding upto 2 decimal points)

Next the interest that is due to be posted is posted to account (12.74.33 + 0 + 1.64 = 13.97 ) and this value is reset to zero, next interest calculation and posting dates are also updated making the end of month account look like.

Date	Activity	Amount	Total Balance	Interest To Be Posted	Next Calculation Date	Next Posting Date	Note
01st September 2010		0	500 1500	12 1.74 64	30 September 2010	30 September 2010	balance brought over from August
15th September 2010	Deposit	1000	1500 2500	12 1.74 64	30 September 2010	30 September 2010	deposit of 1000
25th September 2010	Withdrawal	500	1000 2000	12 1.74 64	30 September 2010	30 September 2010	withdrawal of 500
31st September 2010	Interest Calculated and posted	0 + 12 13.74 97 1012	2013.74 97	0	31 October 2010	31 December 2010	interest posted

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Date	Activity	Amount	Total Balance	Interest To Be Posted	Next Calculation Date	Next Posting Date	Note
01st October 2010		0	1012 2013.74 64	0	31 October 2010	31 December 2010	balance brought forward from September

There is no activity in October except for an adjustment of a previous transaction. (At present Mifos only allows adjustment of the very last transaction so we will adjust the withdrawal transaction). Instead of withdrawing 500 on 25th of September, it should of being Zerohave been withdrawing 1500.

So September account really looks like this now:

Date	Activity	Amount	Total Balance	Interest To Be Posted	Next Calculation Date	Next Posting Date	Note
01st September 2010		0	500 1500	12 1.74 64	30 September 2010	30 September 2010	balance brought over from August
15th September 2010	Deposit	1000	1500 2500	12 1.74 64	30 September 2010	30 September 2010	deposit of 1000
25th September 2010	Withdrawal	500	1000 2000	12 1.74 64	30 September 2010	30 September 2010	withdrawal of 500
25th September 2010	Adjustment	-500	1500 2500	12 1.74 64	30 September 2010	30 September 2010	adjust withdrawal of 500
25th September 2010	Withdrawal	0 1500 1500	1000	12 1.74 64	30 September 2010	30 September 2010	withdrawal of 0

And as a result of this Septembers interest calculation should of beinghave been:

Panel

Interest Calculation Period is from 1st September to 30 September = 30 days duration
For 15 days the balance was 500, for 10 days it was 1500 and for 5 days it was 1500September 1 to September the minimum balance was 1000: thus

P (Sept) = ((500 * 15) + (1500 * 10) + (1500 * 5)) / 30 = (7500 + 15000 + 7500) / 30 = 30000 / 30 ( 1000 ( is = 1000) so interest should of being have been calculated!
r (Sept) = (10 / 100) * (30 / 365) = 3 / 365
I (Aug) = P (r) = 30000 / 30 1000 * (30 / 3650) = 8.2197 = 8.22

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Date	Activity	Amount	Total Balance	Interest To Be Posted	Next Calculation Date	Next Posting Date	Note
31st September 2010	Interest Calculated and posted	8.22 + 121.74 64	1020 1009.96 86	0	31 October 2010	31 December 2010	interest posted
01st October 2010		0	1020 1009.96 86	0	31 October 2010	31 December 2010	balance brought forward from September

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Key

Possible Interest Calculation and Posting Dates