FINERACT-1981: Rate factor using simple interest for EMI calculation

2024-05-28 12:16:00 +02:00
parent 53f4864980
commit 885316690e
3 changed files with 168 additions and 0 deletions
@@ -0,0 +1,50 @@
+/**
+ * Licensed to the Apache Software Foundation (ASF) under one
+ * or more contributor license agreements. See the NOTICE file
+ * distributed with this work for additional information
+ * regarding copyright ownership. The ASF licenses this file
+ * to you under the Apache License, Version 2.0 (the
+ * "License"); you may not use this file except in compliance
+ * with the License. You may obtain a copy of the License at
+ *
+ * http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing,
+ * software distributed under the License is distributed on an
+ * "AS IS" BASIS, WITHOUT WARRANTIES OR CONDITIONS OF ANY
+ * KIND, either express or implied. See the License for the
+ * specific language governing permissions and limitations
+ * under the License.
+ */
+package org.apache.fineract.portfolio.loanproduct.ratefactor;
+
+import java.math.BigDecimal;
+import java.math.MathContext;
+
+public class RateFactorFunctions {
+
+    protected RateFactorFunctions() {}
+
+    /**
+     * To calculate the monthly payment, we first need to calculate something called the Rate Factor. We're going to be
+     * using simple interest. The Rate Factor for simple interest is calculated by the following formula:
+     *
+     *
+     * R = 1 + (r * d / y)
+     *
+     * @param interestRate
+     *            (r)
+     * @param daysInPeriod
+     *            (d)
+     * @param daysInYear
+     *            (y)
+     */
+    public static BigDecimal rateFactor(final BigDecimal interestRate, final Long daysInPeriod, final Integer daysInYear,
+            final MathContext mc) {
+        final BigDecimal daysPeriod = BigDecimal.valueOf(daysInPeriod);
+        final BigDecimal daysYear = BigDecimal.valueOf(daysInYear);
+
+        return BigDecimal.ONE.add(interestRate.multiply(daysPeriod.divide(daysYear, mc), mc), mc);
+    }
+
+}