System and process for converting constant dollar financial instruments
First Claim
1. An apparatus for producing a standard form constant-dollar financial instrument expressed in equivalent nominal-dollar terms, comprising:
- input means for inputting input data to specify a constant-dollar financial instrument, including primary components of the specified constant-dollar financial instrument, and a measure of inflation, base period and frequency of adjustment for inflation to be used, said primary components comprising an interest rate or rate of return specification, said specification including the convention chosen to express the interest rate or rate of return;
first memory means for storing the input data entered through said input means;
second memory means for storing a standard form for the primary components of the specified constant-dollar financial instrument, including a standard convention for expressing the interest rate or rate of return;
detecting means for detecting in said first memory means primary components of the financial instrument that include constant-dollar figures;
comparison means for comparing the form of the detected primary components with the stored standard form, including a comparison of the input interest rate or rate of return specification with said standard convention;
determining means for determining appropriate bases for transforming any non-standard primary components of the instrument into said standard form, including bases for transforming the input interest rate or rate of return specification into said standard convention;
first converting means for converting the non-standard primary components of the instrument into said standard form utilizing said transformation bases;
defining means for defining a measure of inflation consistent with said standard convention utilizing the input measure of inflation and base period;
second converting means for converting the standard form primary components of the instrument into equivalent nominal dollar components based upon the defined measure of inflation; and
output means for outputting a constant-dollar financial instrument expressed in equivalent nominal-dollar terms, corresponding to said input data.
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Accused Products
Abstract
The present invention discloses a method and apparatus for converting constant-dollar financial instruments into equivalent nominal-dollar instruments. After the optimal form or forms of constant-dollar financial instruments have been determined for the purposes of financing a specific enterprise or activity, the data describing the constant-dollar financial instrument or instruments are entered into the system together with the specified inflation measure and the desired frequency of adjustments to the nominal-dollar interest rate and to the nominal-dollar payments. The data processing system puts the specified constant-dollar instrument or instruments into a standardized format and, given the desired frequency of inflation adjustments to be made to the nominal-dollar interest rate and to the nominal-dollar payments, the system specifies the equivalent nominal-dollar instrument or instruments in a standardized format. Every payment and/or compounding period the data processing system calculates the nominal-dollar interest rate(s), nominal-dollar payment(s), nominal-dollar call price(s), and remaining nominal-dollar principal balance for the equivalent nominal-dollar instrument or instruments.
143 Citations
52 Claims
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1. An apparatus for producing a standard form constant-dollar financial instrument expressed in equivalent nominal-dollar terms, comprising:
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input means for inputting input data to specify a constant-dollar financial instrument, including primary components of the specified constant-dollar financial instrument, and a measure of inflation, base period and frequency of adjustment for inflation to be used, said primary components comprising an interest rate or rate of return specification, said specification including the convention chosen to express the interest rate or rate of return; first memory means for storing the input data entered through said input means; second memory means for storing a standard form for the primary components of the specified constant-dollar financial instrument, including a standard convention for expressing the interest rate or rate of return; detecting means for detecting in said first memory means primary components of the financial instrument that include constant-dollar figures; comparison means for comparing the form of the detected primary components with the stored standard form, including a comparison of the input interest rate or rate of return specification with said standard convention; determining means for determining appropriate bases for transforming any non-standard primary components of the instrument into said standard form, including bases for transforming the input interest rate or rate of return specification into said standard convention; first converting means for converting the non-standard primary components of the instrument into said standard form utilizing said transformation bases; defining means for defining a measure of inflation consistent with said standard convention utilizing the input measure of inflation and base period; second converting means for converting the standard form primary components of the instrument into equivalent nominal dollar components based upon the defined measure of inflation; and output means for outputting a constant-dollar financial instrument expressed in equivalent nominal-dollar terms, corresponding to said input data. - View Dependent Claims (2, 3, 4)
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5. A method for producing with an automated data processing system a constant-dollar financial instrument expressed in equivalent nominal-dollar terms, comprising the steps of:
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inputting input data to specify a constant-dollar financial instrument, including primary components of the specified constant-dollar instrument, and a measure of inflation, base period and frequency of adjustment for inflation to be used, said primary components comprising an interest rate or rate of return specification, said specification including the convention chosen to express the interest rate or rate of return; storing in a first memory the input data entered through said input means; detecting in said first memory primary components of the financial instrument that include constant-dollar figures; comparing the form of the detected primary components with a stored standard form, including comparing the input interest rate or rate of return specification with said standard convention; determining appropriate bases for transforming any non-standard primary components of the instrument into said standard form, including bases for transforming the input interest rate or rate of return specification into said standard convention; converting the non-standard primary components into the standard form utilizing the transformation bases; defining a measure of inflation consistent with said standard convention utilizing the input measure of inflation and the base period; converting the standard form primary components of the instrument into equivalent nominal-dollar components based upon the defined measure of inflation; and outputting a constant-dollar financial instrument expressed in equivalent nominal-dollar terms, corresponding to said input data. - View Dependent Claims (6, 7, 8)
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9. An apparatus for converting a constant-dollar financial instrument into an equivalent nominal-dollar instrument comprising:
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input means for inputting input data to specify a constant-dollar financial instrument, including primary components of the specified constant-dollar financial instrument, and a measure of inflation, base period and frequency of adjustment for inflation to be used, said primary components comprising an interest rate or rate of return specification, said specification including the convention chosen to express the interest rate or rate of return; first memory means for storing the input data entered through said input means; second memory means for storing a standard form for the primary components of the specified constant-dollar financial instrument, including a standard convention for expressing the interest rate or rate of return; comparison means for comparing the form of the primary components entered through said input means with the stored standard form, including a comparison of the input interest rate or rate of return specification with said standard convention; first converting means for converting any non-standard primary components of the instrument into said standard form and defining a measure of inflation consistent with said standard convention utilizing the input measure of inflation and base period, said first converting means comprising means for generating a constant-dollar payment schedule and a constant-dollar amortization schedule for the specified constant-dollar financial instrument; second converting means for converting the specified constant-dollar financial instrument into an equivalent nominal-dollar instrument by converting the standard form primary components of the instrument into equivalent nominal dollar components based upon the defined measure of inflation; and output means for outputting output data relating to the equivalent nominal-dollar instrument, including said equivalent nominal dollar components. - View Dependent Claims (10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27)
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28. A method for converting a constant-dollar financial instrument into an equivalent nominal-dollar instrument comprising the steps of:
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inputting input data to specify a constant-dollar financial instrument, including primary component data of the specified constant-dollar instrument, and a measure of inflation, base period and frequency of adjustment for inflation to be used, said primary component data comprising an interest rate or rate or return specification, said specification including the convention chosen to express the interest rate or rate of return; storing in a first memory the input data entered through said input means; comparing the form of the primary component data with a stored standard form, including comparing the input interest rate or rate of return specification with a stored standard convention for expressing the interest rate or rate of return; converting any non-standard primary components into the standard form and defining a measure of inflation consistent with said standard convention utilizing the input measure of inflation and base period, said converting comprising the step of generating a constant-dollar payment schedule and a constant-dollar amortization schedule for the specified constant-dollar financial instrument; converting the specified constant-dollar financial instrument into an equivalent nominal-dollar instrument by converting the standard form primary components of the instrument into equivalent nominal-dollar components based upon the defined measure of inflation; and outputting output data relating to the equivalent nominal-dollar instrument, including said equivalent nominal-dollar components.
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29. An apparatus for converting a constant-dollar financial instrument into an equivalent nominal-dollar instrument comprising:
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input means for inputting input data to specify a constant-dollar financial instrument, including primary components of the specified constant-dollar financial instrument, and a measure of inflation, base period and frequency of adjustment for inflation to be used, said primary components comprising an interest rate or rate of return specification, said specification including the convention chosen to express the interest rate or rate of return; first memory means for storing the input data entered through said input means; second memory means for storing a standard form for the primary components of the specified constant-dollar financial instrument, including a standard convention for expressing the interest rate or rate or return; comparison mean for comparing the form of the primary components entered through said input means with the stored standard form, including a comparison of the input interest rate or rate of return specification with said standard convention; first converting means for converting any non-standard primary components of the instrument into said standard form and defining a measure of inflation consistent with said standard convention utilizing the input measure of inflation and base period; second converting means for converting the specified constant-dollar financial instrument into an equivalent nominal-dollar instrument by converting the standard form primary components of the instrument into equivalent nominal dollar components based upon the defined measure of inflation; output means for outputting output data relating to the equivalent nominal-dollar instrument, including said equivalent nominal dollar components; and loan servicing means for servicing received loan payments and other transactions, comprising output means for outputting data comprising one or more of the following; the current nominal-dollar return; the current interest and penalties due; the payment amount and the portion of the payment to be used for payment of current interest and penalties; the change in the amount of accrued interest from the prior payment and the new level of accured interest; the change in the outstanding loan balance from the prior payment period; the current loan balance; a list of any loan terms with which the loan is not currently in compliance, and supporting data therefor; current financial data required to be supplied by the borrower; the nominal-dollar return for the subsequent payment period; and the required payment of the subsequent payment period.
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30. A method for converting a constant-dollar financial instrument into an equivalent nominal-dollar instrument comprising the steps of:
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inputting input data to specify a constant-dollar financial instrument, including primary component data of the specified constant-dollar instrument, and a measure of inflation, base period and frequency of adjustment for inflation to be used, said primary component data comprising an interest rate or rate of return specification, said specification including the convention chosen to express the interest rate or rate or return; storing in a first memory the input data entered through said input means; comparing the form of the primary component data with a stored standard form, including comparing the input interest rate or rate of return specification with a stored standard convention for expressing the interest rate or rate of return; converting any non-standard primary components into the standard form and defining a measure of inflation consistent with said standard convention utilizing the input measure of inflation and base period; converting the specified constant-dollar financial instrument into an equivalent nominal-dollar instrument by converting the standard form primary components of the instrument into equivalent nominal-dollar components based upon the defined measure of inflation; and outputting output data relating to the equivalent nominal-dollar instrument, including said equivalent nominal-dollar components; and servicing received payments and other transactions concerning the specified financial instrument, said servicing comprising the step of outputting servicing data comprising one or more of the following; the current nominal-dollar return; the current interest and penalties due; the payment amount and the portion of the payment to be used for payment of current interest and penalties; the change in the amount of accrued interest from the prior payment and the new level of accured interest; the change in the outstanding loan balance from the prior payment period; the current loan balance; a list of any loan terms with which the loan is not currently in compliance, and supporting data therefor; current financial data required to be supplied by the borrower; the nominal-dollar return for the subsequent payment period; and the required payment of the subsequent payment period.
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31. An apparatus for servicing a constant-dollar financial instrument expressed in equivalent nominal dollar terms, comprising:
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first memory means for storing data specifying in equivlent nominal dollar terms the constant dollar financial instrument, including nominal dollar equivalent specifications of the rate of return or rate of interest and at least one of a payment schedule and amortization schedule of the constant-dollar financial instrument, and a measure of inflation, base period and frequency of adjustment for inflation to be used; and updating means for periodically updating current data of the instrument in nominal dollar terms, said updating means comprising; input means for inputting actual transaction data relating to the instrument, including payment amounts and dates of receipt, and inflation measure data; second memory means for storing the actual transaction data and inflation measure data input through said input means; first calculating means for calculating a nominal dollar rate of interest or rate of return figure applicable for a subsequent inflation adjustment period, based on the nominal dollar equivalent specification of the rate of interest or rate of return stored in said first memory means, and inflation measure data for said subsequent inflation adjustment period stored in said second memory means; second calculating means for calculating a scheduled payment amount for a subsequent payment period, based on the nominal dollar equivalent specifications of the instrument stored in said first memory means, and inflation measure data stored in said second memory means; third memory means for storing the nominal dollar rate of interest or rate of return figure calculated by said first calculating means, the scheduled payment amount calculated by said second calculating means, and a total required nominal dollar payment amount for a previous payment period immediately preceding said subsequent payment period; comparing means for comparing, respectively, the payment amounts and dates of receipt stored in said second memory means with the total required nominal dollar payment amount stored in said third memory means, and a scheduled payment date, for said previous payment period; first determining means for determining any unpaid payment amount from said previous payment period, and penalties to be applied, based upon the comparison of said comparing means, said first determining means including means for checking penalty provisions of the instrument to determine said penalties to be applied, if any; third calculating means for calculating a total required nominal dollar payment for the subsequent payment period by adding to the scheduled payment amount for that period stored in said third memory means any unpaid payment amounts and penalties determined by said first determining means; and output means for outputting servicing data, including the nominal dollar rate of interest or rate of return applicable for said subsequent payment period, penalties applied from the previous payment period as determined by said first determining means, and the total required nominal dollar payment calculated by said third calculating means. - View Dependent Claims (32, 33, 34, 35, 36, 37, 38, 39, 40, 41)
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42. A method for servicing with an automated data processing system a constant-dollar financial instrument expressed in equivalent nominal dollar terms, comprising the steps of:
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providing a memory storing data specifying in equivalent nominal dollar terms the constant dollar financial instrument, including nominal dollar equivalent specifications of the rate of return or rate of interest and at least one of a payment schedule and amortization schedule of the constant-dollar financial instrument, and a measure of inflation, base period and frequency of adjustment for inflation to be used; and periodically updating current data of the instrument in nominal dollar terms, said updating comprising the steps of; inputting actual transaction data relating to the instrument, including payment amounts and dates of receipt, and inflation measure data; storing the input actual transaction data and inflation measure data; calculating a nominal dollar rate of interest or rate of return figure applicable for a subsequent inflation adjustment period, based on the stored nominal dollar equivalent specification of the rate of interest or rate of return, and stored inflation measure data for said subsequent inflation adjustment period; calculating a scheduled payment amount for a subsequent payment period, based on the stored nominal dollar equivalent specifications of the instrument, and stored inflation measure data; storing the calculated nominal dollar rate of interest or rate of return figure, the calculated scheduled payment amount, and a total required nominal dollar payment amount for a previous payment period immediately preceding said subsequent payment period; comparing, respectively, the stored payment amounts and dates of receipt with the stored total required nominal dollar payment amount, and a scheduled payment date, for said previous payment period; determining any unpaid payment amount from said previous payment period, and penalties to be applied, based upon the result of the comparing step, said determining step including the step of checking penalty provisions of the instrument to determine said penalties to be applied, if any; calculating a total required nominal dollar payment for the subsequent payment period by adding to the stored scheduled payment amount for that period any unpaid payment amounts and penalties determined in the determining step; and outputting servicing data, including the nominal dollar rate of interest or rate of return applicable for said subsequent payment period, penalties applied from the previous payment period as determined in the determining step, and the calculated total required nominal dollar payment for the subsequent payment period. - View Dependent Claims (43, 44, 45, 46, 47, 48, 49, 50, 51, 52)
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Specification