Variable Day Type Calendar for Precise Interest Calculation
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Solution Overview
Problem
Existing business software lacks precision in interest calculation by only allowing discrimination between working and non-working days, failing to adequately reflect the variability of calendar days that affect interest rates, particularly due to events like option expirations and public holidays.
Innovation Solution
A method and system for generating a calendar with a variable definition of days, allowing multiple day types to be assigned to calendar days, enabling more precise interest calculations by linking each day to a corresponding effective interest rate based on its type.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Measurement precision
If multiple day types are assigned to calendar days to improve precision in interest calculation, then measurement precision is improved, but device complexity increases
Solution Approach 1:
The calendar system is segmented into multiple day types (e.g., regular workdays, weekends, public holidays, option expiration days, month-end days) rather than treating all days uniformly. This segmentation allows precise classification of each calendar day into specific categories, enabling differentiated interest rate calculations for each day type, thereby resolving the contradiction between measurement precision and device complexity by organizing complexity into manageable segments.
Solution Approach 2:
The system changes the parameter of day classification from a single binary state (working/non-working) to multiple discrete states (various day types). This parameter change enables more nuanced interest rate calculations by allowing different interest rates to be assigned to different day types, improving measurement precision while maintaining a structured approach to managing the increased complexity.
2Adaptability or versatility
If multiple day types are assigned to calendar days to reflect calendar variability, then adaptability is improved, but device complexity increases
Solution Approach 1:
The calendar system is designed with multi-functionality to handle various types of days (workdays, weekends, holidays, option expiration days, month-end days) within a single unified framework. This universal approach allows the system to adapt to different calendar scenarios and financial calculation requirements without requiring separate systems for each day type, thereby improving adaptability while controlling device complexity through consolidation.
Data Source
AI summary
Embodiments of the present invention relate to a method and system for generating a calendar comprising a variable definition of days. The variable definition of days may correspond to an assignment of varying combinations of interest day types to days represented by the calendar. The interest day types may affect how interest is calculated on a corresponding day.