Hello Mark,
If the interest type is flat, it is always calculated on the disbursed
principal.
In your case,no matter how much amount is repaid, your interest is always
calculated on 6000
Whereas, in declining balance, interest is always calculated on the
outstanding principal.
i.e interest keeps reducing down the installments,which is the correct
behavior.
If you have repaid principal amount of 1000,then interest for the next
installment will be calculated on
amount of 5000 and so on.
Regards,
Sughosh
On Fri, Jan 23, 2015 at 4:56 PM, Mark Mirasol <markmira...@teammicro.net>
wrote:
> Hello Ed,
>
> We tried to create a P6000 today with a term of 25 weeks and a 41.6%/year
> nominal rate. This should give us a total interest of 6000 * .416/52 * 25
> = P1200.
>
> If the interest calculation method is flat, our total interest is P1200.
> However, if the interest calculation method is declining balance, our
> total interest is not equal to P1200.
>
> Shouldn't the total interest be the same regardless of calculation method?
>
> Please advise.
>
> --
>
> *Mark Philippe L. Mirasol**IT Project Manager*
> *TEAMMICRO*
> Mobile: +63 9173008873
> Email: markmira...@teammicro.net
>
>
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New Year. New Location. New Benefits. New Data Center in Ashburn, VA.
GigeNET is offering a free month of service with a new server in Ashburn.
Choose from 2 high performing configs, both with 100TB of bandwidth.
Higher redundancy.Lower latency.Increased capacity.Completely compliant.
http://p.sf.net/sfu/gigenet
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