Interest on cash, capped at these thresholds

[RulerofRails]

No matter how you set Prime Rate there are hard caps on the interest earned on a positive cash balance. The cap starts above $2M.


<=$2M Prime Rate applies. Specifically (current Prime Rate - 4%).

$2M-$5M capped at 4%
$5M-$20M capped at 3%
$20M-$500M capped at 2%
>$500M capped at 1%


Don't forget about economic state. This modifies current Prime rate +/-2. Base prime rate is 7%. To hit the first 4% cap in Boom Times, still requires raising Prime Rate +3.

[Gumboots]

I knew the standard interest on positive cash balance was (Prime rate) - 4%. I think it's fairly common knowledge.
So interest on positive cash goes:

Economy Depression - Prime rate 9% - Interest on positive cash = 5%
Economy Recession - Prime rate 8% - Interest on positive cash = 4%
Economy Normal - Prime rate 7% - Interest on positive cash = 3%
Economy Prosperity - Prime rate 6% - Interest on positive cash = 2%
Economy Booming - Prime rate 5% - Interest on positive cash = 1%

IOW it's capped at 5% anyway, in the worst possible economy. Looks like they've used the same progression to cap interest on rising amounts of cash. Which is a nuisance, and will change some calculations, so handy to know.

To hit the first 4% cap in Boom Times, still requires raising Prime Rate +3.

Sure, which leads to an interesting test case. If you drop the prime rate by 2, what happens to interest on positive cash in a booming economy?

I assume there would have to be a lower limit of either zero or 1%, to stop interest going negative, but with RT3 being as loose as it is maybe they didn't bother coding that.

[RulerofRails]

The minimum rate is 1%, even if you set Prime Rate negative.

If the company will be able to take out bonds, reducing prime rate may not be such a good idea. . . . Yes I tried it. A bond with a negative interest rate will be honored and EARN you money.

I suppose you realize that each company can have a different Prime Rate. In the Income Statement from the ledger the info given with cursor on the word "Interest" appears accurate for that specific company.

[Gumboots]

I realise every company can have a different bond rate, depending on credit rating, but I thought the prime rate was set game-wide by the economy state. Are you saying you can adjust the prime rate by company by event?

Setting the prime rate negative would take a very large adjustment (at least -6% in a boom or -10% in a depression). Does anyone ever use such large adjustments? And even then you'd only get a profit if your credit rating was good enough to get you bonds at the prime rate. It's not something I can see having an effect in an actual game.

[RulerofRails]

Are you saying you can adjust the prime rate by company by event?

Exactly.

Yeah, I wanted to have the bank company earn a decent return via interest. The mention of bonds was just that while they did failsafe interest paid, there are still some holes.

But . . . I might just use such bonds for the bank company after all. I just need to inflate their books with fake assets firsts so they don't have -CBV with low cash + some bonds (if they have more cash I'm sure they will try to repay their special loans!).

Got any ideas for easy fake CBV? At the moment I'm thinking to try territory purchase. SCBC is not setup for that but maybe I can fiddle without upsetting other things.

[Gumboots]

Fake CBV? No idea at the moment. Offhand I don't think territory purchase should work, because it's not an asset as such, but they may have forgotten to close that loophole too.

[Gumboots]

Hang on a minute. I'm pretty sure that whenever I've had to purchase territory access the result has been a drop in CBV equal to the purchase cost. Would have to check to be certain, but I'm 99.99% sure anyway. I don't think there will be any way of faking CBV.

Nearest thing I can think of would be unprofitable industries. Which is still real CBV, on paper, but at least won't send company cash sky high.

[RulerofRails]

Yeah. You're right, I was thinking on the fly. Territories don't get counted to CBV at all. So when you buy one your CBV drops which is the opposite of what I want.

But .... I have another idea. I will try to boost their building costs skyhigh and then build them a special Post Office somewhere.

[Gumboots]

Just threw this into the previous post, which you probably missed:

"Nearest thing I can think of would be unprofitable industries. Which is still real CBV, on paper, but at least won't send company cash sky high."

[RulerofRails]

Ah. Must have been adding it when I was posting. Yes, this is the sensible option.