What is the difference between US Rule and Actuarial Method?
Actuarial Method: When no payment is made, or when the payment is insufficient to pay the accumulated finance charge, the actuarial method requires that the unpaid finance charge be added to the amount financed and thereby capitalized. Interest is computed on interest since in succeeding periods the interest rate is applied to the unpaid balance including the unpaid finance charge. U.S. Rule: The United States Rule Method also known as the US Rule method produces no compounding of interest in that any unpaid accrued interest is accumulated separately and is not added to principal. In addition, under the U.S. Rule, no interest calculation is made until a payment is received. Exec-Amort normally uses the US Rule method of interest calculations. If you want to use the Actuarial Method, you can go to the Report Calculation Options and select the Interest on Interest or the Add Interest Accrual into Principal under the Interest Accrual Method.
