InterestRateCalculation Business Rule - Rounding Difference in Intermediate Calculation (Doc ID 2050339.1)

Last updated on SEPTEMBER 16, 2015

Applies to:

Oracle Insurance Policy Administration J2EE - Version 9.6.1.0 and later
Information in this document applies to any platform.

Symptoms

On : 9.6.1.18 version, Valuation

ACTUAL BEHAVIOR
------------------------
The system is rounding an intermediate step of the compound interest calculation -
Starting CV * ((1 + InterestRate)^(DaysInterest / DaysInYear))
The (DaysInterest / DaysInYear) is being rounded and therefore gives incorrect results.

EXPECTED BEHAVIOR
-----------------------
Example of Actual versus Expected values:
 ($1,370,231.96 - $638.47)*((1 + 0.0445)^(31/365))
= ($1,369,593.49)*((1.0445)^(0.0849315068)) –-OIPA
= ($1,369,593.49)*((1.0445)^(0.084931506849315))--Calc
= ($1,369,593.49)*(1.003704618793111) --OIPA
= ($1,369,593.49)*(1.003704618795265) --Calc
= $1,374,667.311781976 –-OIPA
= $1,374,667.311784927 --Calc

STEPS
-----------------------
The issue can be reproduced at will with the following steps:
1. Configure a transaction and attach the InterestRateCalculation Business Rule.
2. Verify the calculated Raw Cash Value does not match the value generated by OIPA processing.


BUSINESS IMPACT
-----------------------
The issue has the following business impact:
Due to this issue, the calculation error quickly becomes penny differences in Cash Value against expected results.

Cause

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