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- Retreive all End Of Day Details for the account. (By this we mean that we find all deposits, withdrawals and interest that occured on a day)
- Determine the range of applicable days for the interest posting period e.g. 1st of Jan to 31st of March
- Determine the interest calculation periods that fall within this interest posting period. e.g. 1st of Jan to 31st of Jan, 1st of Feb to end of Feb etc
- For each interest calculation period we determine the applicable *interest calculation period detail*s. This will contain information such as account balance at start of period, and all applicable *End Of Day Detail*s for period.
- For each interest calculation period we also create an associated Interest Calculation Period Calculator which is solely responsible for calculating the interest earned/due for the given interest calculation period. The Savings Interest Details used by the calculator are taken directly from the savings product or if the savings products interest details have changed, its can use historical interest details. As a result, its is possible for adjust interest rates (or min interest required balance rule) and still calculate correctly the interest that was due in an interest calculation period that exists in the past.
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Interest Calculation Formula
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Interest Calculation Formula
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Balance
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Table Used
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A = P(1+r/n)
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Minimum Balance
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A = P(1+r/n)
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Average Balance
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SAVINGS_TRXN_DETAIL
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r = R/100 x D/F P = AvB/D or MB/D I = P(r) only if P is greater than or equal to minimum balance required for interest calculation otherwise the interest (I) will be zero. r = R/100 x D/F where, P = AvB/D or MB/D I = Interest Amount AvB = Total Average Balance for duration D MB = Minimum Balance for duration D D = Duration/Interval (Days) for which the interest is being calculated F = Number of Days in Financial Year P = Principal amount (initial amount) (Average/Minimum Balance) R = Annual rate of interest (as a decimal) (defined during savings product creation) r = Effective interest rate for the duration D I = Interest Amount A = amount of money accumulated including interest |
Interest Calculation Examples
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