How Microsoft Dynamics GP calculates the payment amount for scheduled payments in Payables Management in Microsoft Dynamics GP Content provided by Microsoft INTRODUCTION This article describes how Microsoft Dynamics GP calculates the payment amount for scheduled payments in Payables Management in Microsoft Dynamics GP and in Microsoft Business Solutions - Great Plains 8.0. MORE INFORMATION To view the payment amounts for scheduled payments, follow these steps: 1. On the Transactions menu, point to Purchasing , and then click Scheduled Payments . 2. In the Payables Scheduled Payments Entry window, create an invoice that you want to use in scheduled payments. For example, you specify the invoice as follows: • Invoice Amount : $10,130.64 • Schedule Interest Rate : 20% • Payment Frequency : 60 3. Click Amortization . After you do this, some data appears in the Payments Amortization Schedule window. In this example, the data that resembles the data in the following table appears in the Payments Amortization Schedule window: Payment Due Date Payment Amount Principal Interest Principal Balance 1 5/12/2007 $268.40 $99.56 $168.84 $10,131.08 2 6/12/2007 $268.40 $101.22 $167.18 $9,929.86 3 7/12/2007 $268.40 $102.90 $165.50 $9,826.96 4 8/12/2007 $268.40 $104.62 $163.78 $9,722.34 5 9/12/2007 $268.40 $106.36 $162.04 $9,615.98 To calculate the payment amount, Microsoft Dynamics GP performs the following steps: 1. Obtain the first payment interest. The following formula is used to calculate payment interest: Interest = (Schedule Amount x Schedule Interest rate) ÷ Payment frequency Therefore, the Interest is calculated as follows: Interest = (10130.64 x .2) ÷12 (monthly) = 168.84 2. Obtain the monthly payment amount. The following annuity formula is used to calculate the monthly payment amount: A =PV ÷ ((1+i)^n - 1) ÷ (i x (1+i)^n) Note In this formula, A represents the payment amount, PV represents the principal, i represents the Interest rate (monthly), and n represents the number of payments. In this example, PV is equal to 10130.64, i is equal to 0.016667 (.2 ÷12), and n is equal to 60. Therefore, A is equal to 268.40 (268.3999981). Note The last payment amount is performed a decimal adjustment. Therefore, the data in the last line is as follows: Payment Due Date Payment Amount Principal Interest Principal Balance 60 4/12/2012 $268.32 $263.92 $4.40 $0.00 3. Continue calculating the entry for the next line until the last payment is reached. For example, the data in the second line is calculated as follows: • Principal Balance = 10130.64 - 99.56 = 10031.08 • Interest = 10031.08 x .2 ÷ 12 = 167.18 • Principal = 268.40 - 167.18 = 101.22 DISCLAIMERMICROSOFT AND/OR ITS SUPPLIERS MAKE NO REPRESENTATIONS OR WARRANTIES ABOUT THE SUITABILITY, THE RELIABILITY OR THE ACCURACY OF THE INFORMATION THAT IS CONTAINED IN THE DOCUMENTS AND THE RELATED GRAPHICS PUBLISHED ON THIS WEB SITE (THE “MATERIALS”) FOR ANY PURPOSE.THE MATERIALS MAY INCLUDE TECHNICAL INACCURACIES OR TYPOGRAPHICAL ERRORS AND MAY BE REVISED AT ANY TIME WITHOUT NOTICE. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, MICROSOFT AND/OR ITS SUPPLIERS DISCLAIM AND EXCLUDE ALL REPRESENTATIONS, WARRANTIES, AND CONDITIONS WHETHER EXPRESS, IMPLIED OR STATUTORY, INCLUDING BUT NOT LIMITED TO REPRESENTATIONS, WARRANTIES, OR CONDITIONS OF TITLE, NON-INFRINGEMENT, SATISFACTORY CONDITION OR QUALITY, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO THE MATERIALS. RAPID PUBLISHING RAPID PUBLISHING ARTICLES PROVIDE INFORMATION DIRECTLY FROM WITHIN THE MICROSOFT SUPPORT ORGANIZATION. THE INFORMATION THAT IS CONTAINED HEREIN IS CREATED IN RESPONSE TO EMERGING OR UNIQUE TOPICS, OR IS INTENDED TO SUPPLEMENT OTHER KNOWLEDGE BASE INFORMATION. Last Updated: 28 Feb 2017 Was this information helpful? Yes No Tell us what we can do to improve the article Submit Thanks! Your feedback will help us improve the support experience.