Hi,

 

At MIFOS webpage we see, for interest calculation for loan accounts, equal
monthly installment, the base days are 30/360 or 1/12. Can we possibly
change it to 30/365?

 

http://mifos.org/functional-specifications/system-processing/interest-calcul
ations-loan-accounts

 

Declining Balance Interest (EMI of Principal and Interest)

Declining Balance Definition: Interest is computed at periodic intervals on
the amount of the original principal that has not yet been repaid. Since the
borrower only pays interest on that amount of original principal that has
not yet been repaid, interest paid is smaller every period. However, to make
sure that the borrower sets EMI, the formula is:

EMI formula:

EMI = i*P / [1- (1+i)^-n]

Where,

P = Loan amount

r = Rate of interest per year

n = Term of the loan in periods

l = Length of a period (fraction of a year, i.e., 1/12 = 1 month (or
30/360), 14/360 = bi-weekly.)

i = Interest rate per period (r*l)

Regards,

 

 

Miguel Jóia Santos

Consultor/Gerente

 

SBS - Soluções em Banca e Seguros

Insurance and Banking Solutions

cell: +258 823000231

cell: +258 847141055

telefax: + 258 21302599

sbs_logo.png

 

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