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EDO Interest Flow Diagrams

This file contains visual diagrams explaining the EDO (10-year annual accumulation with inflation indexing) bond strategy algorithm.

Architecture Overview

flowchart LR
    A[calculateEdoBondResult] --> B[createEdoAnnualAccumulationStrategy]
    B --> C[simulateAnnualAccumulationBond]
    C --> D[Yearly snapshots]
    C --> E[Purchase events]
    C --> F[Redemption events]
    C --> G[Yearly results]

Long-Term Accumulation Flow

EDO uses 10-year cycles with inflation-indexed rates after the first year.

flowchart TD
    A[Start year] --> B[Apply yearly capitalization to active bonds]
    B --> C{Year is multiple of 10?}
    C -- Yes --> D[Redeem matured 10-year batch]
    C -- No --> E[Continue accumulation]
    D --> F[Tax redemption profit]
    F --> G[Add net proceeds to cash]
    G --> H{Reinvest cash >= 100?}
    H -- Yes --> I[Buy new EDO batch]
    H -- No --> J[Add to cash account]
    I --> K[Store purchase event]
    J --> K
    K --> L{final year?}
    L -- Yes --> M[Early redeem remaining bonds]
    L -- No --> N[Build year snapshot]
    M --> N

Rate Structure Timeline

xychart-beta
    title "EDO 10-Year Rate Structure"
    x-axis ["Year 1", "Year 2", "Year 3", "Year 4", "Year 5", "Year 6", "Year 7", "Year 8", "Year 9", "Year 10"]
    y-axis "Annual Rate (%)" 5 --> 9
    line [5.35, "inf+2.0", "inf+2.0", "inf+2.0", "inf+2.0", "inf+2.0", "inf+2.0", "inf+2.0", "inf+2.0", "inf+2.0"]

References