Date adjustments
When creating a series of payment dates, it is important that both parties agree on the dates when payments are due.
Example
A monthly payment series starts on June 30th, 2003, which is a Monday. Adding one month, the second date in the series becomes July 30th, 2003 (a Wednesday). The third date in the series would be August 20th, 2003 (a Saturday).
What if, as it's the case in the example, the start day happens to be the last day of the month? Would all the other dates need to fall on the last day of the month too?
If a date in the series falls on a weekend, would it need to be adjusted to the following or preceding weekday?
What if the adjustment to the following or preceding weekday would make the date fall in another month?
FinKit allows you to adjust the dates it displays in the details, using all or some of the following payment date conventions, depending on the calculation and the payment frequency:
| Choice | What it means |
None |
No adjustment is made, unless the following day is not available in the target month: in this case the last day of the month is used. |
| If end of month | When the start day happens to be the last day of the month, the last day of the month is used for all the dates in the series. |
| Preceding weekday | When a payment date falls on a weekend, the preceding weekday is used. |
| Preceding modified | When a payment date falls on a weekend, the preceding weekday is used, unless it would make the date fall in the preceding month: in this case the first weekday of the month is used. |
| Following weekday | When a payment date falls on a weekend, the following weekday is used. |
| Following modified | When a payment date falls on a weekend, the following weekday is used, unless it would make the date fall in the following month: in this case the last weekday of the month is used. |
Since FinKit calculates for even length periods, changing the date adjustment options has no effect at all on the values it displays. Therefore, only the first two choices are available for calculations such as the Periodic Payments or Amortization calculation. To see the effect of the special date adjustment options, you will have to use the Date Series calculation.
NoteNo calendars with holidays are used, so you should still check the series for payment dates that fall on a holiday in your country.
Related topics
| Simple interest |
| Compound interest |