Rate Change compounding

The compounding chosen for a Rate Change must be compatible with subsequent payment periods. Compounding usually happens when payments occur. It may also occur more frequently than payments, such as with daily compounding. You cannot, however, combine a compound period with payments that occur more frequently. Weekly payments, for example, cannot be combined with a monthly compound period. The daily, exact days, and continuous compound periods are compatible with any payment period.

If you have a Rate Change that occurs between payments and you don't want compounding to occur on that date, choose None for the compounding period on the cash flow line. This establishes a new interest rate effective on the start date but does not cause compounding on the date of the Rate Change itself. When you choose None for the compounding period, it only applies to the rate event and does not affect the compound period of other cash flow lines.