The Fees calculation is based on the certain types of interest rates used in the application. They are to be defined separately for each currency.
If not defined for a specific currency, a warning is issued during transaction processing and the interest type for the system currency is used for the interest calculation.
The Interest Rate Type is used in calculating interest for Financing and Advances.
You can provide the Rate type with Currency and define the appropriate Calculation methods from the Calendar Calculation method and Interest Calculation method.
There is an option to use some other interest calculation method for the surcharge/margin than for the reference rate. If this is required, then the calculation method differing from the interest calculation method of the reference interest rate must be defined in the Special Method for Margin field.
To maintain Interest Rate Type, DBIIRT transaction is used.
Select it from the menu item[Static Data -> Fee/Interest -> Interest Rate Type].
(Administrator and designer users can directly start this transaction by clicking the (Launch transaction 
) available in the Panel headline without having to select the relevant menu)
To add a new Interest Rate type, click on the 
to create a new Rate type.
When you have made your changes, click on the ( 
) Save function to save all the the data entered in the transaction to the database.
The amount (i.e. interest or fee amount) is calculated for a given base amount, rate, number of units, and calculation method. These values are determined extrinsically to the current calculation.
An appropriate calculation method must be implemented for each each rate type.
Input values for the calculation include:
| Parameter(s) | Interpretation |
|---|---|
| Amount | Base amount for which the fee or interest amount is to be calculated (negative base amounts are not supported or the absolute value is used) |
| Rate | Rate - depending on calculation method, this can be in percent, permille or base points |
| Number of units | For most calculation methods this would be the number of days, but can also be the number of months or quarters. For some calculation methods this is also irrelevant (e.g. if the amount is to be calculated only on the basis of the base amount and rate). |
| Calculation method | Code for the actual algorithm/formula to be used |
Implemented calculation methods in system include:
| Name | Unit | Rate in | Calculation | |
|---|---|---|---|---|
| Floating Rate per year, year = 365 days | day | per year in % | result = (amount * rate / 100) / 365 * units | |
| Fixed Rate per year, year = 365 days | day | per year in % | result = (amount * rate / 100) / 365 * units | |
| Floating Rate per year, year = 360 days | day | per year in % | result = (amount * rate / 100) / 360 * units | |
| Fixed Rate per year, year = 360 days | day | per year in % | result = (amount * rate / 100) / 360 * units | |
| Base Points per Quarter (each call returns the amount for one quarter) | per call in base points | result = amount * rate / 10000 | ||
| Base Points per year, year = 365 days | day | per year in base points | result = (amount * rate / 10000) / 365 * units | |
| Base Points per year, year = 360 days | day | per year in base points | result = (amount * rate / 10000) / 360 * units | |
| Simple Discount to Yield, Year = 360 days | day | rate per year in % | $quot = 1 + rate / 100 * units / 360 $NV = amount / $quot result = amount - $NV |
|
| Simple Discount to Yield, Year = 365 days | day | rate per year in % | $quot = 1 + rate / 100 * units / 365 $NV = amount / $quot result = amount - $NV |
|
| Discount to Yield, Compounded Annually, Year = 360 days (=DY0 for units < 365) |
day | rate per year in % | $CompleteYears = Int( units / 365 ) $RemainingDays = units - $CompleteYears * 365 $quot = 1 + rate / 100 * $RemainingDays / 360 for $yearidx = 1 to $CompleteYears $quot = ( 1 + rate / 100 * 365 / 360 ) * $quot next $yearidx $NV = amount / $quot result = amount - $NV |
|
| Discount to Yield, Compounded Annually, Year = 365 days (=DY5 for units < 365) |
day | rate per year in % | $CompleteYears = Int( units / 365 ) $RemainingDays = units - $CompleteYears * 365 $quot = 1 + rate / 100 * $RemainingDays / 365 for $yearidx = 1 to $CompleteYears $quot = ( 1 + rate / 100 ) * $quot next $yearidx $NV = amount / $quot result = amount - $NV |
|
| Discount rate flat | Unit | rate per unit in % | $quot = 1 + rate / 100 $effrate = rate / $quot $year = amount * $effrate / 100 result = $year * units |
|
| Permille | rate in per mille | result = amount * rate / 1000 |
There is an option to use some other interest calculation method for the surcharge/margin than for the reference rate. If this is required, then the calculation method differing from the interest calculation method of the reference interest rate must be defined in the Special Method for Margin field.
Please refer below link for Static Data Interest Rates Article,
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