Automatic interest/dividend calculation for credit accounts

[CaptainFrosty]

It would be convenient to have interest automatically calculated at the specified rate and added at the end each cycle.

[CaptainFrosty]

Can this go on the voting list?

[mtotschnig]

@CaptainFrosty Could you give a detailed specification of how this feature should work?

[CaptainFrosty]

I just mean that for credit card accounts, or possibly an account that pays interest or dividends, a percentage rate could be set and the percentage added or subtracted to the balance each cycle.

[CaptainFrosty]

This would save someone from having to create a transaction for the interest they accrued every month, but since it is a variable amount based on percentage, it doesn't really work as a regular scheduled payment.

[mtotschnig]

I am not sure if calculating interest is trivial or standard. Wouldn't it need to take into account exact value dates of each transaction? And do all financial institutions calculate the duration during which the interest is due the same way?

[keastes]

So far as I understand interest computation is standard, depending on either the principal amount (i.e. for a certificate of deposit), or the current balance at the time of interest calculation (ie loans, savings accounts)

UI wise a choice is needed between simple and compound, the interest rate (users with variable rates may be stuck doing things manually) then for how often interest is calculated and paid out (not always the same period)

The equations won't chance, but the variables vary significantly from contact to contract, much less between institutions, and legal frameworks.