Investor Payout of Additional Interest Components
Overview
Investors can also earn the interest of the additional interest components added to the investment orders.
The additional interest payout for an investor is calculated as follows:
Additional Interest Payout Amount = Minimum of (Investor Interest Amount, (Investor Interest Amount / Borrower Interest Amount) * Interest Component Paid Amount).
where
Borrower Interest Amount = Interest Accrued in the loan + Interest Remaining in the loan + Interest Posted in the loan.
Investor Interest Amount = Investor Interest Accrued + Investor Interest Remaining + Additional Interest Posted for the investor.
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Interest Component Paid Amount = Interest Component Paid in the LPT of loan.
Note:For additional interest in advance, the interest amount for the borrower or the investor is the corresponding interest posted.
Example
Consider the following parameters:
| Investor Additional Interest Component Details | Loan LPT Details | ||
|---|---|---|---|
| Advance Interest | False | Total Amount Paid | 120 |
| Interest Posted | 50 | Interest Component Paid | 120 |
| Interest Remaining | 0 | ||
| Interest Accrued | 12 | ||
| Interest Rate | 12 | ||
| Interest Calculation Method | Amount Not Funded | ||
The following amounts are calculated as:
| Parameters | Value |
|---|---|
| Investor Amount | 50 + 0 + 12 = 62 |
| Borrower Interest Amount | 130 (this amount is the loan interest paid and is taken from the loan payment transaction) |
| Additional interest payout amount | Minimum of (62, 62 / 130 * 120) = Minimum of (62, 57.23) = 57.23 |
For more information on Additional Interest in an Investment Order, see Additional Interest in an Investment Order.