Hi friends
I have a requirement of a loan which partly pays and partyl capitalises interest. Example 1st scenario- loan if 100 @ interest of 8% , split 5% paid every 3 months and 3 % capitalised everytime the 5% is paid . 2. 2nd scenario the loan has an option to convert to equity. My approach is to use 55A and also customise an option with equity instrument as an underlying but i am not sure how to structure the interest condition, note that we need to value the option on a monthly basis , kindly advise how best to go about this requirement
Thanks in advance
Victor