Rounding Rules for Declining Balance (EPI)

This page contains the immediate requirements for how rounding will be handled for declining balance, equal principal loans. In later releases declining balance, equal principal will use the same settings as the other two currently support loan types (flat and declining balance.) If it just as easy to use the settings for other loan types then using those settings in v1.1 is fine.

Declining Balance will always use HALF_UP for all installments including the last.

All total installment amounts can be rounded to the nearest rupee, which is the currency precision used by our current customers that use this loan type. The 999 account does not need to be used for this loan type. Principal will always be a whole number, but Mifos does not need to handle this as the user will make sure the amount divides evenly. Interest and fees should also always be a whole number, but this will require rounding.

The Principal amount is always determined first so that all principal payments are the same for every installment. Rounding occurs in the interest payments using HALF_UP as described above.

If a user wants a zero interest loan, they can use the standard flat loan type, so in v1.1 the equal principal implementation does not need to cover the case of zero interest.

For some example loan schedules see:

(this link will only work for those with permissions to view the document due to it containing sensitive data)

1 Year (25 Kista) is a good example to use for testing.