Setting up a Canadian mortgage in GnuCash

[Dawning Sky]

On 1/21/07, Barry Ferg <bdf_ext at spacebeast.com> wrote:

>
> Here is the problem: Canadian mortgage interest is compounded
> semi-annually.  However, the Loan Druid and associated PMT() functions
> all assume that the payment and compounding periods are the same, so
> they won't work.
>
>
I'm not in Canada, so forgive me if I miss something.  Here's my question
regarding this "semi-annual compounding": Why compounding frequency matters
in this case, as long as the compounding frequency is lower than the payment
frequency and you don't have a negative amortization.  You pay all the
interest accrued during the month, which is a simple interest, since the
interest is "compounded semi-annually".  Whatever left goes to the
principal.  So nothing is left to be compounded.

DS