Example

1. Calculation of deposit

The annex to the agreement on term deposit shall contain: a) date of a deposit, b) date or dates of payment of interest and repayment of capital, c) the rate of interest on capital, d) tax rate and calculate the amount of tax, e) calculate the amount of interest payable which assumes deposit.

Example - Standard capitalized, deposits calculator (with tax)

Date       Date       Day   Int   Index    Capital       Interest      Brutto        Tax rate      Deposit
----.--.-- ----.--.-- ----- ----- ---.---- ----------.-- ----------.-- ----------.-- ----------.-- ----------.--
2016.04.01 2016.08.31   153   152   2.7500      10000.00        114.53      10114.53         44.67      10069.86

2. Calculation of credit

The annex to the loan contract should include: a) timing of the funds available to the borrower, b) terms of payment of installments of principal and interest, c) the rate of interest on capital, d) calculate the amount of interest due to granting a loan - lender, e) the actual rate of the loan - calculated in accordance with applicable law in the country, f) and the contract should specify the rate of interest on any arrears.

Example - Mortgage (loan) calculator, installments schedule repayments (monthly interval) - decreasing installment

Date       Date       Days  Index    Capital       Interest      Mortgage      Installment
----.--.-- ----.--.-- ----- ---.---- ----------.-- ----------.-- ----------.-- ----------.--
2016.04.01 2016.08.31   153   3.8000      10000.00         95.55      10031.23      10095.55
No    Date       Date       Days  Int   Index    Capital       Interest      Mortgage      Installment
----- ----.--.-- ----.--.-- ----- ----- ---.---- ----------.-- ----------.-- ----------.-- ----------.--
    1 2016.04.01 2016.04.30   153    30   3.8000      10000.00         31.23      10031.23       1992.01
    2 2016.05.01 2016.05.31   123    31   3.8000       8039.22         25.94       8065.16       2052.08
    3 2016.06.01 2016.06.30    92    30   3.8000       6013.08         18.78       6031.86       1979.56
    4 2016.07.01 2016.07.31    62    31   3.8000       4052.30         13.07       4065.37       2039.22
    5 2016.08.01 2016.08.31    31    31   3.8000       2026.15          6.53       2032.68       2032.68
Became part installment (capital installment) in the 31-day interval:       2026.14
Equal installment day:         65.98

The monetary system can not be divided penny - this shows the accuracy of calculations equal installment day, penny rounding down.

3. The calculation of collateral

Annex calculating the amount of collateral, depending on which installments of the borrower or will not pay, for example the first - can be prepared for example - monthly capitalized, deposits calculator.

Example - Monthly capitalized, deposits calculator

Date       Date       Days  Index    Capital       Interest      Collateral
----.--.-- ----.--.-- ----- ---.---- ----------.-- ----------.-- ----------.--
2016.04.01 2016.08.31   153   3.8000      10000.00        159.23      10159.23
No    Date       Date       Days  Int   Index    Capital       Interset      Collateral
----- ----.--.-- ----.--.-- ----- ----- ---.---- ----------.-- ----------.-- ----------.--
    1 2016.04.01 2016.04.30   152    29   3.8000      10000.00         30.19      10030.19
    2 2016.05.01 2016.05.31   123    31   3.8000      10030.19         32.37      10062.56
    3 2016.06.01 2016.06.30    92    30   3.8000      10062.56         31.42      10093.98
    4 2016.07.01 2016.07.31    62    31   3.8000      10093.98         32.57      10126.55
    5 2016.08.01 2016.08.31    31    31   3.8000      10126.55         32.68      10159.23

Suggested amount of the collateral is in the column of Deposit / Collateral.

Arguments for an increased risk

[-] The calculation of credit protection may also take into account the different costs, for example the costs of trial and costs bailiff proceedings enforcement, as well as what it is protected by credit ie. eg. property and from that make the entry of the mortgage to secure the amount of the loan amount or higher.

[-] In determining the amount of the security must take into account the principle of anatocyzmu - ie. prohibition of charging interest on overdue interest until not bring cout the court action and to consider the possible costs of professional representation, and the length of the proceedings or the court and estimate the property of the borrower.

Arguments for decreasing risk

[+] In determining the amount of the security must be taken into account also the fact that bank lending in cases of overdue repayments or a cessation of the loan before payment of the entire debt, is entitled to issue bank enforcement title, which approved by the general court - civil, is the enforcement on pursuant to which the bailiff leads the enforcement proceedings.

[+] In determining the amount of the security must be taken into account also that the entire transaction is carried out without cash and credit is spent on designated purpose - the credit agreement and the contract of sale - ie. eg. in the case of mortgage credit is provided and poured directly into the account the banking developer from whom we purchased the property.

[+] In determining the amount of the security must be taken into account also the fact that the borrower declares that it does not intend to extort cash from the financial institution. Such a statement of the borrower in case of committing a crime to defraud by example. Making a false statement concerning the assets of the borrower, it can be a financial institution or a means of evidence in pending criminal proceedings.

[+] In determining the amount of the security must be taken into account also the fact that the borrower a loan in spending, there are other, larger means to evading responsibility for the debts eg. by leaving the country, as well as the territory of the member accepting arrest warrant (eg. european arrest warrant) or extradition agreement.

In determining the amount of the security must be taken into account, the updated status of the paid-up capital. You have the right to require reducing the amount of collateral - eg. to reduce the entry of the mortgage - to increase your credit score again, however, this may be linked to the cost of official and banking.

4. Repaid the loan, in case of changes in the interest rate, for loans with installment equal to the equivalent of decreasing

The annex to the loan contract should include the amount of the loan is repaid. The repaid amount should be settled after each repayment installment credit. If the contract provides for a variable rate of interest - which is standard in the case of interest rate changes, new annex to the contract shall be made from not yet repaid, again the input of capital.

Example - Mortgage (loan) calculator, installments schedule repayments (monthly interval) - equal installment equivalent to decreasing

Date       Date       Days  Index    Capital       Interest      Mortgage      Installment   Repayment     Equal
----.--.-- ----.--.-- ----- ---.---- ----------.-- ----------.-- ----------.-- ----------.-- ----------.-- ----------.--
2016.04.01 2016.08.31   153  10.0000      10000.00        251.49      10082.19      10251.49      10251.49      10251.49
No    Date       Date       Days  Int   Index    Capital       Interest      Mortgage      Installment   Repayment     Equal
----- ----.--.-- ----.--.-- ----- ----- ---.---- ----------.-- ----------.-- ----------.-- ----------.-- ----------.-- ----------.--
    1 2016.04.01 2016.04.30   153    30  10.0000      10000.00         82.19      10082.19       2042.97      10251.49       2010.09
    2 2016.05.01 2016.05.31   123    31  10.0000       8039.22         68.27       8107.49       2094.41       8241.40       2077.09
    3 2016.06.01 2016.06.30    92    30  10.0000       6013.08         49.42       6062.50       2010.20       6164.31       2010.09
    4 2016.07.01 2016.07.31    62    31  10.0000       4052.30         34.41       4086.71       2060.56       4154.22       2077.09
    5 2016.08.01 2016.08.31    31    31  10.0000       2026.15         17.20       2043.35       2043.35       2077.13       2077.13
Became part installment (capital installment) in the 31-day interval:       2026.14
Equal installment day:         67.00

Repaid the loan is in Repayment column. When changing the borrowing rate, the new annex with the calculation of loan installments are calculated from the outstanding credit from the column Repayment - equal installment also will increase or decrease.

For a loan of an equal installment equivalent decreasing, interest is calculated on traditional as well as for a loan installment of decreasing, but is averaged installment. Installment equal to average the equivalent of the sum of the amounts in column Interest - the amount of the difference between the sum of the amounts in column Interest and the interest of the first installment of the loan is the value of equivalence, which belongs to a financial institution - to be lower in the first part of the loan - repayable averaged installment.

The financial institution, lending bears a greater credit risk, due to the fact, that the capital for a long part of the term of the loan is repaid more slowly, which is inextricably linked with higher rate of capital and interest rates slower lowering the amount of collateral.

Credit equal to the installment equivalent decreasing, is equivalent only on the assumption, that the entire term of the loan, the interest rate of the loan will not change.

If the borrowing rate change is to get the effect of equivalence, for the amount of credit debt take the amount of the repayment of the column, which shows the default status of the current debt, however, contained in the so-called. part of the capital and so. the interest is not in the same proportion as in the time of the conclusion of the contract.

5. The borrowing rate equal to the installment and the interest rate on the loan installment of decreasing

Borrowing rate equal to the installment and the borrowing rate from decreasing installment to be calculated separately - such loans are two different financial products - profit, any loss, of financial institution of these products is different.

Factors that financial institution, the bank, takes into account the setting interest rates represent the degree of professionalism of the business thereof.

6. Currency exchange and spread

Repaying the loan contained in a currency other [eg. CHF] from the currency, you pay off the loan [eg. PLN] each installment credit, in case if you do not have currency credit [CHF], determine: a) the exchange rate of the loan [CHF] on the currency you pay off the loan [PLN] from the date of repayment installment credit - adopted by the financial institution with which you have made a contract credit, ie. eg. 1 CHF = 4.06 PLN, and b) spread - an additional commission - that your financial institution charges for currency exchange credit [CHF] currency, eg. a national [PLN] - this is usually equal to several percent of the transaction [e. 5% - 10%] depends on the value of the transaction [for larger transactions in value is lower than the smaller] - and the associated difficulties in obtaining credit currency [CHF].

In conclusion, it should be noted, that concluding the credit contract rate you decide, if you do not have the currency of the loan because, for example it earn or have income, the extra risk of changes in the exchange rate of the loan [CHF] to typically national currency [PLN]. This additional risk is the risk game - speculation - on currency and usually should not be allowed, because of poor security contract loan low income and mortgage to the value of the property.

Changing the currency exchange rate of credit in the national currency, depends on many factors, most important of which are: a) comparing the value of the economies of exchanged currencies, b) determining the current state of the economies [growth - recession or deflation - inflation], and c) currency speculation or d) the interventions of central banks strengthen or weaken the currency, and e) the so-called. reserve currency.

Financial institutions, credit interest charge mostly in the so-called 'Traditional rate', as interest on the deposit - see 'Equal installment'.

Charging interest, in the so-called 'Traditional rate', as interest on the deposit for a loan you can not determine - without complicated algorithm - compared with the capital part of the loan (installment) to the interest part of the loan (installment), which is important in the case of a loan with a variable interest rate, dependent state of the economy. The ratio of capital part to part interest, expressed by the interest rate, is irrelevant only in the case of a loan for a fixed interest rate for the entire loan period. That's why the so-called. 'The traditional rate' should apply only to loans with a fixed rate.

Follow recalculated, so-called. 'Traditional rate' and check that the interest rate accept your institution, funding.

Service available calculator converts the so-called 'Traditional rate' [horizontally] to 'Rate' [vertical]. Modern calculators make it possible to use in their calculations of complex algorithms, that allow you to 'pay only for themselves' [for his credit], knowing at any time the state debt and the ratio of the capital part of the loan to the interest part of the loan.

Example - Mortgage (loan) calculator, installments schedule repayments (monthly interval) - equal installment equivalent to decreasing

Interest - date set: Slicing thousandths and smaller
Currency exchange rate - date set: 4.0639
Spread - date set: 10.0
Date       Date       Days  Index    Capital       Interest      Mortgage      Installment   Repayment     Equal         Exchange      After spread
----.--.-- ----.--.-- ----- ---.---- ----------.-- ----------.-- ----------.-- ----------.-- ----------.-- ----------.-- ----------.-- ----------.--
2016.07.01 2017.06.30   365   8.5000       7000.00        322.25       7050.53       7322.25       7322.25       7322.25      29756.83      32732.44
No    Date       Date       Days  Int   Index    Capital       Interest      Mortgage      Installment   Exchange      Spread instal Repayment     Equal         Exchange      Spread equal
----- ----.--.-- ----.--.-- ----- ----- ---.---- ----------.-- ----------.-- ----------.-- ----------.-- ----------.-- ----------.-- ----------.-- ----------.-- ----------.-- ----------.--
    1 2016.07.01 2016.07.31   365    31   8.5000       7000.00         50.53       7050.53        645.05       2621.41       2883.55       7322.25        621.88       2527.25       2779.97
    2 2016.08.01 2016.08.31   334    31   8.5000       6405.48         46.24       6451.72        640.76       2603.98       2864.37       6700.37        621.88       2527.25       2779.97
    3 2016.09.01 2016.09.30   303    30   8.5000       5810.96         40.59       5851.55        615.93       2503.07       2753.37       6078.49        601.82       2445.73       2690.30
    4 2016.10.01 2016.10.31   273    31   8.5000       5235.62         37.79       5273.41        632.31       2569.64       2826.60       5476.67        621.88       2527.25       2779.97
    5 2016.11.01 2016.11.30   242    30   8.5000       4641.10         32.42       4673.52        607.76       2469.87       2716.85       4854.79        601.82       2445.73       2690.30
    6 2016.12.01 2016.12.31   212    31   8.5000       4065.76         29.35       4095.11        623.87       2535.34       2788.87       4252.97        621.88       2527.25       2779.97
    7 2017.01.01 2017.01.31   181    31   8.5000       3471.24         25.05       3496.29        619.57       2517.87       2769.65       3631.09        621.88       2527.25       2779.97
    8 2017.02.01 2017.02.28   150    28   8.5000       2876.72         18.75       2895.47        555.73       2258.43       2484.27       3009.21        561.70       2282.69       2510.95
    9 2017.03.01 2017.03.31   122    31   8.5000       2339.74         16.89       2356.63        611.41       2484.70       2733.16       2447.51        621.88       2527.25       2779.97
   10 2017.04.01 2017.04.30    91    30   8.5000       1745.22         12.19       1757.41        587.53       2387.66       2626.42       1825.63        601.82       2445.73       2690.30
   11 2017.05.01 2017.05.31    61    31   8.5000       1169.88          8.44       1178.32        602.96       2450.36       2695.39       1223.81        621.88       2527.25       2779.97
   12 2017.06.01 2017.06.30    30    30   8.5000        575.36          4.01        579.37        579.37       2354.50       2589.94        601.93        601.93       2446.18       2690.79
Became part installment (capital installment) in the 31-day interval:        594.52
Equal installment day:         20.06
Traditional equal installment day:         20.80
Traditional index:         15.6943%

7. The conversion rate of traditional interest to rate decreasing

Both rates must be compared with one another taking into account the following factors: a) the term, b) the interest rate, and c) the length of the interval index.

The financial institution when assessing the profitability of credit product sets its parameters.

Profitability depends on the length of the loan, interest rate, as well as the frequency of calculation of interest [interval index].

The amount of percentage interest rate can be converted from a rate of decreasing the rate of the traditional relatively easily by the formula:

Conversion = Total interest accrued in the traditional way / Total interest installments diminishing * The interest rate on capital

However, as calculated interest rate, for loans with installments decreasing does not represent equivalency financial products with such rates, ie. Credit with installment equal to the same interest rate as the loan to the installment decreasing are not loans equivalent, because the equity portion of the loan with installment decreasing is repaid regularly in a continuous manner, and the installment loan is repaid equal installments shift the capital part of the part of interest.

At the same product profitability for the financial institution, the loan installment from decreasing in relation to the credit of the installment should be equal to the interest-bearing much lower, eg. the mortgage contract concluded for 20 years, it may even be twice lower interest rate. In the first part of the loan period, the loan is repaid installment declining much faster - share capital decreases steadily. A huge part of the profit, financial institution lending, falls on the first part of the loan period of the loan installment decreasing.

The amount of the percentage rate of interest can be converted from a rate of conventional interest rate decreasing only by using sophisticated algorithms and computer hardware with appropriate software.