When the Provisional Credit step is complete, the Interest Calculation step becomes active. This step prompts a user to calculate the interest that should be refunded to the account holder if the dispute is paid.
A service can be configured to calculate interest automatically. When a service is not configured, a manual assignment is generated so that interest can be calculated using the provided calculator. The interest is refunded in the Interest Maintenance step.Calculator View
The calculator view is included in the Interest Calculation assignment and prompts the user to input the appropriate interest rate (%), along with the desired start and end dates to calculate the amount of interest. The application automatically factors in the disputed amount.
Freeform Entry View
The freeform entry ais included in the Interest Calculation assignment and allows the user to input the appropriate interest amount instead of utilizing the calculator view. The application will update the interest amoutn based on the amount entered by the user.
Calculation Formulas
The compound interest formula below is used to calculate the interest and is then applied based on the start and end dates selected. The interest accrued is then applied to the transaction amount for any subsequent rows so that the total amount calculated is cumulative.
i = (((((r/100)/d)+1)^d)-1)*t
i -- Interest amount
r -- Interest rate as a %
t -- Transaction Amount
d – Day Count Convention, either 360 or 365
The simple interest formula below is used to calculate the interest and is then applied based on the start and end dates selected.
i = t(1+ (r/100)/d)
i -- Interest Amount
r -- Interest rate as a %
t -- Transaction Amount
d – Day Count Convention, either 360 or 365
Interest Details
Interest calculation details, such as dates, rates, and amount, can be viewed from the Overview tab.
Configuration
To configure if, and how, Interest Calculation is executed, update Interest Calculation Pre-Conditions.
To configure the interest calculator as a tool or to simply enter interest amount, update ShouldUseInterestCalculator.
To override the default compound interest calculation and use simple interest instead, or to use the 360 day formula instead of the 365 day formula, see Client Settings.