I. Basic equation expressing the equivalence of drawdowns on the one hand and repayments and charges on the other.
The basic equation, which establishes the annual percentage rate of charge (APRC), equates, on an annual basis, the total present value of drawdowns on the one hand and the total present value of repayments and payments of charges on the other hand, i.e.:
where:
Remarks:
(a) The amounts paid by both parties at different times shall not necessarily be equal and shall not necessarily be paid at equal intervals.
(b) The starting date shall be that of the first drawdown.
(c) Intervals between dates used in the calculations shall be expressed in years or in fractions of a year. A year is presumed to have 365 days (or 366 days for leap years), 52 weeks or 12 equal months. An equal month is presumed to have 30.41666 days (i.e. 365/12) regardless of whether or not it is a leap year.
Where intervals between dates used in the calculations cannot be expressed as a whole number of w
…