The calculator service works independently of Fusion Loan IQ, Finastra’s commercial lending solution, according to the company. Built on FusionFabric.cloud, Finastra’s calculator’s open API supports the integration with systems that don’t yet have a solution in place for calculating ARR/RFR rates.
Finastra explained that the calculator service independently accesses the ARR/RFR from external official sources such as the Federal Reserve Bank of New York for SOFR, according to Finance Magnates. It then calculates compounded in arrears rates and daily non-cumulative compounded rates, along with corresponding interest accrual amounts for a set of inputs.
Depending upon the rate method chosen, the calculator has the flexibility to calculate the daily compounding rates for the whole period or only for the end date. It follows Finastra’s Fusion Loan IQ ARR calculations, which gives market participants consistent and accurate results.
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