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Defining interest rate using annuity payment structure

Hi experts,

my scenario is the following: I'm dealing with interest rate instrument with annuity repayment structure. My question is whether it is possible and how to get an interest rate using standard SAP solution, while you know those inputs:

- nominal amount at the beggining;

- number of periods;

- annuity payment, consisting of installment (or nominal repayment) and interest component.

appreciate your help.

Rgds,

Renatas

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1 Answer

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    Former Member
    Sep 21, 2010 at 11:59 PM

    In Transaction Manager, the system relies on the user to provide both the interest and the annuity repayment.

    Say for example if you input:

    Start Date: +

    End Date: ++12

    Principal: $24000

    Interest: 1 %

    Annuity Repayment $2000

    (Note: the system expects user to input all of the above variables)

    Then it presents a cash flow as follows:

    @5F@ @06@ @5F@ 09/21/2010 1100 Investment / Increase 24,000.00- - EUR

    @5F@ @06@ @5F@ 10/21/2010 1140 Annuity Repayment 1,980.00 + EUR

    @5F@ @06@ @5F@ 10/21/2010 1200 Nominal interest 20.00 + EUR

    @5F@ @06@ @5F@ 11/21/2010 1140 Annuity Repayment 1,981.65 + EUR

    @5F@ @06@ @5F@ 11/21/2010 1200 Nominal interest 18.35 + EUR

    @5F@ @06@ @5F@ 12/21/2010 1200 Nominal interest 16.70 + EUR

    @5F@ @06@ @5F@ 12/21/2010 1140 Annuity Repayment 1,983.30 + EUR

    @5F@ @06@ @5F@ 01/21/2011 1140 Annuity Repayment 1,984.95 + EUR

    @5F@ @06@ @5F@ 01/21/2011 1200 Nominal interest 15.05 + EUR

    and so on...

    This is unlike in SAP Banking Loans Management, where you could simply provide 2 of the variables (say, Monthly Annuity payment = $2,000 and Principal = $24,000 with the start and end date - and the system would generate the Rate and then you can "copy" the rate to the interest rate field.

    So Annuity functionality is lees sophisticated in Transaction Manager - Money Markets as the required calculator is not available.

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