What is exponential interest in SAP FS-CML - Loans Management?

SAP Term: exponential interest

• Component: FS-CML

• Component Name: Loans Management

• Description: An additional interest on the outstanding standard interest in an installment as well as on the interest on arrears.

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• Key Concepts: 
  Exponential interest is a type of interest calculation used in SAP FS-CML Loans Management. It is based on the concept of compounding, which means that the interest rate is applied to the principal amount and any accrued interest from previous periods. This type of interest calculation can be used to calculate the total amount of interest due on a loan over a period of time. 
  
  How to use it: 
  In SAP FS-CML Loans Management, exponential interest can be used to calculate the total amount of interest due on a loan over a period of time. To do this, you will need to enter the principal amount, the interest rate, and the number of periods for which the loan will be outstanding. The system will then calculate the total amount of interest due based on these inputs. 
  
  Tips & Tricks: 
  When using exponential interest in SAP FS-CML Loans Management, it is important to remember that the longer the loan period, the higher the total amount of interest due. Therefore, it is important to consider this when deciding how long to make a loan. 
  
  Related Information: 
  For more information about exponential interest and how it works in SAP FS-CML Loans Management, please refer to the official SAP documentation.