diff --git a/api/src/main/java/io/mifos/portfolio/api/v1/domain/ChargeDefinition.java b/api/src/main/java/io/mifos/portfolio/api/v1/domain/ChargeDefinition.java
index 2268871..b7170d0 100644
--- a/api/src/main/java/io/mifos/portfolio/api/v1/domain/ChargeDefinition.java
+++ b/api/src/main/java/io/mifos/portfolio/api/v1/domain/ChargeDefinition.java
@@ -39,7 +39,8 @@
   @SuppressWarnings("WeakerAccess")
   public enum ChargeMethod {
     FIXED,
-    PROPORTIONAL
+    PROPORTIONAL,
+    INTEREST
   }
 
   @ValidIdentifier
diff --git a/component-test/src/main/java/io/mifos/portfolio/Fixture.java b/component-test/src/main/java/io/mifos/portfolio/Fixture.java
index 8ebb702..f533a12 100644
--- a/component-test/src/main/java/io/mifos/portfolio/Fixture.java
+++ b/component-test/src/main/java/io/mifos/portfolio/Fixture.java
@@ -118,7 +118,7 @@
     final Set<AccountAssignment> accountAssignments = new HashSet<>();
     ret.setAccountAssignments(accountAssignments);
     ret.setCurrentState(Case.State.CREATED.name());
-    ret.setInterest(BigDecimal.valueOf(10_0000, 4));
+    ret.setInterest(BigDecimal.valueOf(10_00, 2));
 
     final CaseParameters caseParameters = getTestCaseParameters();
     final Gson gson = new Gson();
diff --git a/component-test/src/main/java/io/mifos/portfolio/TestAccountingInteractionInLoanWorkflow.java b/component-test/src/main/java/io/mifos/portfolio/TestAccountingInteractionInLoanWorkflow.java
index cc2c74c..4ab454a 100644
--- a/component-test/src/main/java/io/mifos/portfolio/TestAccountingInteractionInLoanWorkflow.java
+++ b/component-test/src/main/java/io/mifos/portfolio/TestAccountingInteractionInLoanWorkflow.java
@@ -27,8 +27,10 @@
 import io.mifos.individuallending.api.v1.domain.workflow.Action;
 import io.mifos.individuallending.api.v1.events.IndividualLoanCommandEvent;
 import io.mifos.individuallending.api.v1.events.IndividualLoanEventConstants;
-import io.mifos.portfolio.api.v1.domain.*;
-import io.mifos.portfolio.api.v1.events.ChargeDefinitionEvent;
+import io.mifos.portfolio.api.v1.domain.Case;
+import io.mifos.portfolio.api.v1.domain.CostComponent;
+import io.mifos.portfolio.api.v1.domain.Product;
+import io.mifos.portfolio.api.v1.domain.TaskDefinition;
 import io.mifos.portfolio.api.v1.events.EventConstants;
 import io.mifos.rhythm.spi.v1.client.BeatListener;
 import io.mifos.rhythm.spi.v1.domain.BeatPublish;
@@ -126,13 +128,6 @@
     setFeeToFixedValue(product.getIdentifier(), ChargeIdentifiers.LOAN_ORIGINATION_FEE_ID, LOAN_ORIGINATION_FEE_AMOUNT);
     setFeeToFixedValue(product.getIdentifier(), ChargeIdentifiers.DISBURSEMENT_FEE_ID, DISBURSEMENT_FEE_AMOUNT);
 
-    final ChargeDefinition interestChargeDefinition = portfolioManager.getChargeDefinition(product.getIdentifier(), ChargeIdentifiers.INTEREST_ID);
-    interestChargeDefinition.setAmount(Fixture.INTEREST_RATE);
-
-    portfolioManager.changeChargeDefinition(product.getIdentifier(), interestChargeDefinition.getIdentifier(), interestChargeDefinition);
-    Assert.assertTrue(this.eventRecorder.wait(EventConstants.PUT_CHARGE_DEFINITION,
-        new ChargeDefinitionEvent(product.getIdentifier(), interestChargeDefinition.getIdentifier())));
-
     taskDefinition = createTaskDefinition(product);
 
     portfolioManager.enableProduct(product.getIdentifier(), true);
diff --git a/component-test/src/main/java/io/mifos/portfolio/TestChargeDefinitions.java b/component-test/src/main/java/io/mifos/portfolio/TestChargeDefinitions.java
index 6673c26..685c183 100644
--- a/component-test/src/main/java/io/mifos/portfolio/TestChargeDefinitions.java
+++ b/component-test/src/main/java/io/mifos/portfolio/TestChargeDefinitions.java
@@ -62,11 +62,11 @@
         ChargeIdentifiers.DISBURSE_PAYMENT_ID,
         ChargeIdentifiers.TRACK_DISBURSAL_PAYMENT_ID,
         ChargeIdentifiers.TRACK_RETURN_PRINCIPAL_ID,
+        ChargeIdentifiers.INTEREST_ID,
         ChargeIdentifiers.REPAYMENT_ID)
         .collect(Collectors.toSet());
     final Set<String> expectedChangeableChargeDefinitionIdentifiers = Stream.of(
         ChargeIdentifiers.DISBURSEMENT_FEE_ID,
-        ChargeIdentifiers.INTEREST_ID,
         ChargeIdentifiers.LATE_FEE_ID,
         ChargeIdentifiers.LOAN_ORIGINATION_FEE_ID,
         ChargeIdentifiers.PROCESSING_FEE_ID)
@@ -154,24 +154,24 @@
 
 
   @Test
-  public void shouldChangeInterestChargeDefinition() throws InterruptedException {
+  public void shouldChangeDisbursementFeeChargeDefinition() throws InterruptedException {
     final Product product = createProduct();
 
-    final ChargeDefinition interestChargeDefinition
-        = portfolioManager.getChargeDefinition(product.getIdentifier(), ChargeIdentifiers.INTEREST_ID);
-    interestChargeDefinition.setAmount(Fixture.INTEREST_RATE);
+    final ChargeDefinition disbursementFeeDefinition
+        = portfolioManager.getChargeDefinition(product.getIdentifier(), ChargeIdentifiers.DISBURSEMENT_FEE_ID);
+    disbursementFeeDefinition.setAmount(BigDecimal.valueOf(10_0000, 4));
 
     portfolioManager.changeChargeDefinition(
         product.getIdentifier(),
-        interestChargeDefinition.getIdentifier(),
-        interestChargeDefinition);
+        disbursementFeeDefinition.getIdentifier(),
+        disbursementFeeDefinition);
     Assert.assertTrue(this.eventRecorder.wait(EventConstants.PUT_CHARGE_DEFINITION,
-        new ChargeDefinitionEvent(product.getIdentifier(), interestChargeDefinition.getIdentifier())));
+        new ChargeDefinitionEvent(product.getIdentifier(), disbursementFeeDefinition.getIdentifier())));
 
     final ChargeDefinition chargeDefinitionAsChanged
-        = portfolioManager.getChargeDefinition(product.getIdentifier(), interestChargeDefinition.getIdentifier());
+        = portfolioManager.getChargeDefinition(product.getIdentifier(), disbursementFeeDefinition.getIdentifier());
 
-    Assert.assertEquals(interestChargeDefinition, chargeDefinitionAsChanged);
+    Assert.assertEquals(disbursementFeeDefinition, chargeDefinitionAsChanged);
   }
 
   @Test
diff --git a/service/src/main/java/io/mifos/individuallending/IndividualLendingPatternFactory.java b/service/src/main/java/io/mifos/individuallending/IndividualLendingPatternFactory.java
index 7d5be70..9488c60 100644
--- a/service/src/main/java/io/mifos/individuallending/IndividualLendingPatternFactory.java
+++ b/service/src/main/java/io/mifos/individuallending/IndividualLendingPatternFactory.java
@@ -190,14 +190,15 @@
     final ChargeDefinition interestCharge = charge(
         INTEREST_NAME,
         Action.ACCEPT_PAYMENT,
-        BigDecimal.valueOf(0.05),
+        BigDecimal.ONE,
         CUSTOMER_LOAN,
         INTEREST_INCOME);
     interestCharge.setForCycleSizeUnit(ChronoUnit.YEARS);
     interestCharge.setAccrueAction(Action.APPLY_INTEREST.name());
     interestCharge.setAccrualAccountDesignator(INTEREST_ACCRUAL);
     interestCharge.setProportionalTo(ChargeProportionalDesignator.RUNNING_BALANCE_DESIGNATOR.getValue());
-    interestCharge.setReadOnly(false);
+    interestCharge.setChargeMethod(ChargeDefinition.ChargeMethod.INTEREST);
+    interestCharge.setReadOnly(true);
 
     final ChargeDefinition customerRepaymentCharge = new ChargeDefinition();
     customerRepaymentCharge.setChargeAction(Action.ACCEPT_PAYMENT.name());
diff --git a/service/src/main/java/io/mifos/individuallending/internal/service/CostComponentService.java b/service/src/main/java/io/mifos/individuallending/internal/service/CostComponentService.java
index 29a6592..67725d2 100644
--- a/service/src/main/java/io/mifos/individuallending/internal/service/CostComponentService.java
+++ b/service/src/main/java/io/mifos/individuallending/internal/service/CostComponentService.java
@@ -102,7 +102,7 @@
         caseParameters.getMaximumBalance(),
         BigDecimal.ZERO,
         BigDecimal.ZERO,
-        dataContextOfAction.getCustomerCase().getInterest(),
+        dataContextOfAction.getInterestAsFraction(),
         minorCurrencyUnitDigits,
         true);
   }
@@ -121,7 +121,7 @@
         caseParameters.getMaximumBalance(),
         BigDecimal.ZERO,
         BigDecimal.ZERO,
-        dataContextOfAction.getCustomerCase().getInterest(),
+        dataContextOfAction.getInterestAsFraction(),
         minorCurrencyUnitDigits,
         true);
   }
@@ -141,7 +141,7 @@
         caseParameters.getMaximumBalance(),
         BigDecimal.ZERO,
         BigDecimal.ZERO,
-        dataContextOfAction.getCustomerCase().getInterest(),
+        dataContextOfAction.getInterestAsFraction(),
         minorCurrencyUnitDigits,
         true);
   }
@@ -198,7 +198,7 @@
         caseParameters.getMaximumBalance(),
         currentBalance,
         disbursalSize,
-        dataContextOfAction.getCustomerCase().getInterest(),
+        dataContextOfAction.getInterestAsFraction(),
         minorCurrencyUnitDigits,
         true);
   }
@@ -238,7 +238,7 @@
         caseParameters.getMaximumBalance(),
         currentBalance,
         BigDecimal.ZERO,
-        dataContextOfAction.getCustomerCase().getInterest(),
+        dataContextOfAction.getInterestAsFraction(),
         minorCurrencyUnitDigits,
         true);
   }
@@ -274,7 +274,11 @@
       final List<ScheduledCharge> hypotheticalScheduledCharges = individualLoanService.getScheduledCharges(
           productIdentifier,
           hypotheticalScheduledActions);
-      loanPaymentSize = getLoanPaymentSize(currentBalance, minorCurrencyUnitDigits, hypotheticalScheduledCharges);
+      loanPaymentSize = getLoanPaymentSize(
+          currentBalance,
+          dataContextOfAction.getInterestAsFraction(),
+          minorCurrencyUnitDigits,
+          hypotheticalScheduledCharges);
     }
 
     final List<ScheduledCharge> scheduledChargesForThisAction = individualLoanService.getScheduledCharges(
@@ -298,7 +302,7 @@
         caseParameters.getMaximumBalance(),
         currentBalance,
         loanPaymentSize,
-        dataContextOfAction.getCustomerCase().getInterest(),
+        dataContextOfAction.getInterestAsFraction(),
         minorCurrencyUnitDigits,
         true);
   }
@@ -382,7 +386,7 @@
         caseParameters.getMaximumBalance(),
         currentBalance,
         BigDecimal.ZERO,
-        dataContextOfAction.getCustomerCase().getInterest(),
+        dataContextOfAction.getInterestAsFraction(),
         minorCurrencyUnitDigits,
         true);
   }
@@ -440,7 +444,7 @@
         final CostComponent costComponent = costComponentMap
             .computeIfAbsent(scheduledCharge.getChargeDefinition(), CostComponentService::constructEmptyCostComponent);
 
-        final BigDecimal chargeAmount = howToApplyScheduledChargeToAmount(scheduledCharge)
+        final BigDecimal chargeAmount = howToApplyScheduledChargeToAmount(scheduledCharge, interest)
             .apply(amountProportionalTo)
             .setScale(minorCurrencyUnitDigits, BigDecimal.ROUND_HALF_EVEN);
         adjustBalances(
@@ -496,34 +500,42 @@
   }
 
   private static Optional<ChargeProportionalDesignator> proportionalToDesignator(final ScheduledCharge scheduledCharge) {
-    if (!scheduledCharge.getChargeDefinition().getChargeMethod().equals(ChargeDefinition.ChargeMethod.PROPORTIONAL))
+    if (!scheduledCharge.getChargeDefinition().getChargeMethod().equals(ChargeDefinition.ChargeMethod.PROPORTIONAL) &&
+        !scheduledCharge.getChargeDefinition().getChargeMethod().equals(ChargeDefinition.ChargeMethod.INTEREST))
       return Optional.of(ChargeProportionalDesignator.NOT_PROPORTIONAL);
 
     return ChargeProportionalDesignator.fromString(scheduledCharge.getChargeDefinition().getProportionalTo());
   }
 
   private static Function<BigDecimal, BigDecimal> howToApplyScheduledChargeToAmount(
-      final ScheduledCharge scheduledCharge)
+      final ScheduledCharge scheduledCharge, final BigDecimal interest)
   {
     switch (scheduledCharge.getChargeDefinition().getChargeMethod())
     {
-      case FIXED:
+      case FIXED: {
         return (amountProportionalTo) -> scheduledCharge.getChargeDefinition().getAmount();
-      case PROPORTIONAL:
-        return (amountProportionalTo) ->
-            PeriodChargeCalculator.chargeAmountPerPeriod(scheduledCharge, RUNNING_CALCULATION_PRECISION)
-                .multiply(amountProportionalTo);
-      default:
+      }
+      case PROPORTIONAL: {
+        final BigDecimal chargeAmountPerPeriod = PeriodChargeCalculator.chargeAmountPerPeriod(scheduledCharge, scheduledCharge.getChargeDefinition().getAmount(), RUNNING_CALCULATION_PRECISION);
+        return chargeAmountPerPeriod::multiply;
+      }
+      case INTEREST: {
+        final BigDecimal chargeAmountPerPeriod = PeriodChargeCalculator.chargeAmountPerPeriod(scheduledCharge, interest, RUNNING_CALCULATION_PRECISION);
+        return chargeAmountPerPeriod::multiply;
+      }
+      default: {
         return (amountProportionalTo) -> BigDecimal.ZERO;
+      }
     }
   }
 
   static BigDecimal getLoanPaymentSize(final BigDecimal startingBalance,
+                                       final BigDecimal interest,
                                        final int minorCurrencyUnitDigits,
                                        final List<ScheduledCharge> scheduledCharges) {
     final int precision = startingBalance.precision() + minorCurrencyUnitDigits + EXTRA_PRECISION;
     final Map<Period, BigDecimal> accrualRatesByPeriod
-        = PeriodChargeCalculator.getPeriodAccrualInterestRate(scheduledCharges, precision);
+        = PeriodChargeCalculator.getPeriodAccrualInterestRate(interest, scheduledCharges, precision);
 
     final int periodCount = accrualRatesByPeriod.size();
     if (periodCount == 0)
diff --git a/service/src/main/java/io/mifos/individuallending/internal/service/DataContextOfAction.java b/service/src/main/java/io/mifos/individuallending/internal/service/DataContextOfAction.java
index f7c2485..af636fc 100644
--- a/service/src/main/java/io/mifos/individuallending/internal/service/DataContextOfAction.java
+++ b/service/src/main/java/io/mifos/individuallending/internal/service/DataContextOfAction.java
@@ -23,6 +23,7 @@
 
 import javax.annotation.Nonnull;
 import javax.annotation.Nullable;
+import java.math.BigDecimal;
 import java.util.Collections;
 import java.util.List;
 
@@ -34,6 +35,7 @@
   private final CaseEntity customerCase;
   private final CaseParameters caseParameters;
   private final List<AccountAssignment> oneTimeAccountAssignments;
+  private final BigDecimal interestAsFraction;
 
   DataContextOfAction(final @Nonnull ProductEntity product,
                       final @Nonnull CaseEntity customerCase,
@@ -43,6 +45,7 @@
     this.customerCase = customerCase;
     this.caseParameters = caseParameters;
     this.oneTimeAccountAssignments = oneTimeAccountAssignments == null ? Collections.emptyList() : oneTimeAccountAssignments;
+    interestAsFraction = customerCase.getInterest().divide(BigDecimal.valueOf(100), 4, BigDecimal.ROUND_HALF_EVEN);;
   }
 
   public @Nonnull ProductEntity getProduct() {
@@ -68,4 +71,8 @@
   public String getMessageForCharge(final Action action) {
     return getCompoundIdentifer() + "." + action.name();
   }
+
+  BigDecimal getInterestAsFraction() {
+    return interestAsFraction;
+  }
 }
diff --git a/service/src/main/java/io/mifos/individuallending/internal/service/IndividualLoanService.java b/service/src/main/java/io/mifos/individuallending/internal/service/IndividualLoanService.java
index b24d4d7..0f77033 100644
--- a/service/src/main/java/io/mifos/individuallending/internal/service/IndividualLoanService.java
+++ b/service/src/main/java/io/mifos/individuallending/internal/service/IndividualLoanService.java
@@ -57,6 +57,7 @@
 
     final BigDecimal loanPaymentSize = CostComponentService.getLoanPaymentSize(
         dataContextOfAction.getCaseParameters().getMaximumBalance(),
+        dataContextOfAction.getInterestAsFraction(),
         minorCurrencyUnitDigits,
         scheduledCharges);
 
@@ -65,7 +66,7 @@
         minorCurrencyUnitDigits,
         scheduledCharges,
         loanPaymentSize,
-        dataContextOfAction.getCustomerCase().getInterest());
+        dataContextOfAction.getInterestAsFraction());
 
     final Set<ChargeName> chargeNames = scheduledCharges.stream()
             .map(IndividualLoanService::chargeNameFromChargeDefinition)
@@ -179,7 +180,7 @@
       return scheduledAction.repaymentPeriod;
   }
 
-  private List<ScheduledCharge> getScheduledCharges(final List<ScheduledAction> scheduledActions,
+  static List<ScheduledCharge> getScheduledCharges(final List<ScheduledAction> scheduledActions,
                                                     final Map<String, List<ChargeDefinition>> chargeDefinitionsMappedByChargeAction,
                                                     final Map<String, List<ChargeDefinition>> chargeDefinitionsMappedByAccrueAction) {
     return scheduledActions.stream()
@@ -192,7 +193,7 @@
         .collect(Collectors.toList());
   }
 
-  private Stream<ChargeDefinition> getChargeDefinitionStream(
+  private static Stream<ChargeDefinition> getChargeDefinitionStream(
           final Map<String, List<ChargeDefinition>> chargeDefinitionsMappedByChargeAction,
           final Map<String, List<ChargeDefinition>> chargeDefinitionsMappedByAccrueAction,
           final ScheduledAction scheduledAction) {
diff --git a/service/src/main/java/io/mifos/individuallending/internal/service/PeriodChargeCalculator.java b/service/src/main/java/io/mifos/individuallending/internal/service/PeriodChargeCalculator.java
index 58cac97..39bb325 100644
--- a/service/src/main/java/io/mifos/individuallending/internal/service/PeriodChargeCalculator.java
+++ b/service/src/main/java/io/mifos/individuallending/internal/service/PeriodChargeCalculator.java
@@ -38,12 +38,14 @@
   {
   }
 
-  static Map<Period, BigDecimal> getPeriodAccrualInterestRate(final List<ScheduledCharge> scheduledCharges,
-                                                              final int precision) {
+  static Map<Period, BigDecimal> getPeriodAccrualInterestRate(
+      final BigDecimal interest,
+      final List<ScheduledCharge> scheduledCharges,
+      final int precision) {
     return scheduledCharges.stream()
             .filter(PeriodChargeCalculator::accruedInterestCharge)
             .collect(Collectors.groupingBy(scheduledCharge -> scheduledCharge.getScheduledAction().repaymentPeriod,
-                    Collectors.mapping(x -> chargeAmountPerPeriod(x, precision), RateCollectors.compound(precision))));
+                    Collectors.mapping(x -> chargeAmountPerPeriod(x, interest, precision), RateCollectors.compound(precision))));
   }
 
   private static boolean accruedInterestCharge(final ScheduledCharge scheduledCharge)
@@ -52,15 +54,16 @@
         scheduledCharge.getChargeDefinition().getAccrueAction() != null &&
         scheduledCharge.getChargeDefinition().getAccrueAction().equals(Action.APPLY_INTEREST.name()) &&
         scheduledCharge.getScheduledAction().action == Action.ACCEPT_PAYMENT &&
-        scheduledCharge.getScheduledAction().actionPeriod != null;
+        scheduledCharge.getScheduledAction().actionPeriod != null &&
+        scheduledCharge.getChargeDefinition().getChargeMethod() == ChargeDefinition.ChargeMethod.INTEREST;
   }
 
-  static BigDecimal chargeAmountPerPeriod(final ScheduledCharge scheduledCharge, final int precision)
+  static BigDecimal chargeAmountPerPeriod(final ScheduledCharge scheduledCharge, final BigDecimal amount, final int precision)
   {
     final ChargeDefinition chargeDefinition = scheduledCharge.getChargeDefinition();
     final ScheduledAction scheduledAction = scheduledCharge.getScheduledAction();
     if (chargeDefinition.getForCycleSizeUnit() == null)
-      return chargeDefinition.getAmount();
+      return amount;
 
     final BigDecimal actionPeriodDuration
         = BigDecimal.valueOf(
@@ -84,7 +87,7 @@
     final int accrualPeriodsInActionPeriod = actionPeriodDuration.divide(
         accrualPeriodDuration.orElse(actionPeriodDuration), precision, BigDecimal.ROUND_HALF_EVEN)
         .intValueExact();
-    final BigDecimal rateForAccrualPeriod = chargeDefinition.getAmount().divide(
+    final BigDecimal rateForAccrualPeriod = amount.divide(
         accrualPeriodsInCycle, precision, BigDecimal.ROUND_HALF_EVEN);
     return createCompoundedRate(rateForAccrualPeriod, accrualPeriodsInActionPeriod, precision);
   }
diff --git a/service/src/main/resources/db/migrations/mariadb/V6__interest_and_charges.sql b/service/src/main/resources/db/migrations/mariadb/V6__interest_and_charges.sql
index a10b21c..78e109a 100644
--- a/service/src/main/resources/db/migrations/mariadb/V6__interest_and_charges.sql
+++ b/service/src/main/resources/db/migrations/mariadb/V6__interest_and_charges.sql
@@ -14,4 +14,4 @@
 -- limitations under the License.
 --
 
-ALTER TABLE bastet_cases ADD COLUMN interest DECIMAL(7,4) NULL DEFAULT NULL;
\ No newline at end of file
+ALTER TABLE bastet_cases ADD COLUMN interest DECIMAL(5,2) NULL DEFAULT NULL;
\ No newline at end of file
diff --git a/service/src/test/java/io/mifos/individuallending/internal/service/Fixture.java b/service/src/test/java/io/mifos/individuallending/internal/service/Fixture.java
index c649180..7f73106 100644
--- a/service/src/test/java/io/mifos/individuallending/internal/service/Fixture.java
+++ b/service/src/test/java/io/mifos/individuallending/internal/service/Fixture.java
@@ -86,7 +86,6 @@
   }
 
   static ScheduledCharge scheduledInterestBookingCharge(
-      final double amount,
       final LocalDate initialDate,
       final int chargeDateDelta,
       final int periodBeginDelta,
@@ -99,12 +98,12 @@
         new Period(chargeDate, periodLength),
         getPeriod(initialDate, periodBeginDelta, periodLength));
     final ChargeDefinition chargeDefinition = new ChargeDefinition();
-    chargeDefinition.setChargeMethod(ChargeDefinition.ChargeMethod.PROPORTIONAL);
+    chargeDefinition.setChargeMethod(ChargeDefinition.ChargeMethod.INTEREST);
     chargeDefinition.setForCycleSizeUnit(ChronoUnit.YEARS);
     chargeDefinition.setIdentifier("blah");
     chargeDefinition.setAccrueAction(Action.APPLY_INTEREST.name());
     chargeDefinition.setChargeAction(Action.ACCEPT_PAYMENT.name());
-    chargeDefinition.setAmount(BigDecimal.valueOf(amount));
+    chargeDefinition.setAmount(BigDecimal.ONE);
     chargeDefinition.setFromAccountDesignator(AccountDesignators.CUSTOMER_LOAN);
     chargeDefinition.setAccrualAccountDesignator(AccountDesignators.INTEREST_ACCRUAL);
     chargeDefinition.setToAccountDesignator(AccountDesignators.INTEREST_INCOME);
diff --git a/service/src/test/java/io/mifos/individuallending/internal/service/IndividualLoanServiceTest.java b/service/src/test/java/io/mifos/individuallending/internal/service/IndividualLoanServiceTest.java
index d8691bb..1bb13b1 100644
--- a/service/src/test/java/io/mifos/individuallending/internal/service/IndividualLoanServiceTest.java
+++ b/service/src/test/java/io/mifos/individuallending/internal/service/IndividualLoanServiceTest.java
@@ -186,7 +186,7 @@
     final ChargeDefinition processingFeeCharge = getFixedSingleChargeDefinition(10.0, Action.OPEN, PROCESSING_FEE_ID, AccountDesignators.PROCESSING_FEE_INCOME);
     final ChargeDefinition loanOriginationFeeCharge = getFixedSingleChargeDefinition(100.0, Action.APPROVE, LOAN_ORIGINATION_FEE_ID, AccountDesignators.ORIGINATION_FEE_INCOME);
     final List<ChargeDefinition> defaultChargesWithFeesReplaced =
-    chargesWithInterestRate(0.01).stream().map(x -> {
+    charges().stream().map(x -> {
       switch (x.getIdentifier()) {
         case PROCESSING_FEE_ID:
           return processingFeeCharge;
@@ -202,7 +202,7 @@
         .caseParameters(caseParameters)
         .initialDisbursementDate(initialDisbursementDate)
         .chargeDefinitions(defaultChargesWithFeesReplaced)
-        .interest(BigDecimal.valueOf(0.01))
+        .interest(BigDecimal.valueOf(1))
         .expectChargeInstancesForActionDatePair(Action.OPEN, initialDisbursementDate, Collections.singletonList(processingFeeCharge))
         .expectChargeInstancesForActionDatePair(Action.APPROVE, initialDisbursementDate,
             Collections.singletonList(loanOriginationFeeCharge));
@@ -217,14 +217,14 @@
     caseParameters.setPaymentCycle(new PaymentCycle(ChronoUnit.MONTHS, 1, 0, null, null));
     caseParameters.setMaximumBalance(BigDecimal.valueOf(200000));
 
-    final List<ChargeDefinition> charges = chargesWithInterestRate(0.10);
+    final List<ChargeDefinition> charges = charges();
 
     return new TestCase("yearLoanTestCase")
         .minorCurrencyUnitDigits(3)
         .caseParameters(caseParameters)
         .initialDisbursementDate(initialDisbursementDate)
         .chargeDefinitions(charges)
-        .interest(BigDecimal.valueOf(0.10));
+        .interest(BigDecimal.valueOf(10));
   }
 
   private static TestCase chargeDefaultsCase()
@@ -235,25 +235,18 @@
     caseParameters.setPaymentCycle(new PaymentCycle(ChronoUnit.WEEKS, 1, 1, 0, 0));
     caseParameters.setMaximumBalance(BigDecimal.valueOf(2000));
 
-    final List<ChargeDefinition> charges = chargesWithInterestRate(0.05);
+    final List<ChargeDefinition> charges = charges();
 
     return new TestCase("chargeDefaultsCase")
         .minorCurrencyUnitDigits(2)
         .caseParameters(caseParameters)
         .initialDisbursementDate(initialDisbursementDate)
         .chargeDefinitions(charges)
-        .interest(BigDecimal.valueOf(0.05));
+        .interest(BigDecimal.valueOf(5));
   }
 
-  private static List<ChargeDefinition> chargesWithInterestRate(final double interestRate) {
-    final List<ChargeDefinition> defaultLoanCharges = IndividualLendingPatternFactory.defaultIndividualLoanCharges();
-
-    defaultLoanCharges.forEach(x -> {
-      if (x.getIdentifier().equals(ChargeIdentifiers.INTEREST_ID))
-        x.setAmount(BigDecimal.valueOf(interestRate));
-    });
-
-    return defaultLoanCharges;
+  private static List<ChargeDefinition> charges() {
+    return IndividualLendingPatternFactory.defaultIndividualLoanCharges();
   }
 
   private static ChargeDefinition getFixedSingleChargeDefinition(
diff --git a/service/src/test/java/io/mifos/individuallending/internal/service/PeriodChargeCalculatorTest.java b/service/src/test/java/io/mifos/individuallending/internal/service/PeriodChargeCalculatorTest.java
index 6b3c2ff..0961727 100644
--- a/service/src/test/java/io/mifos/individuallending/internal/service/PeriodChargeCalculatorTest.java
+++ b/service/src/test/java/io/mifos/individuallending/internal/service/PeriodChargeCalculatorTest.java
@@ -38,6 +38,7 @@
     List<ScheduledCharge> scheduledCharges;
     int precision;
     Map<Period, BigDecimal> expectedPeriodRates;
+    private BigDecimal interest;
 
     private TestCase(final String description) {
       this.description = description;
@@ -64,6 +65,11 @@
               "description='" + description + '\'' +
               '}';
     }
+
+    TestCase interest(BigDecimal newVal) {
+      this.interest = newVal;
+      return this;
+    }
   }
 
   @Parameterized.Parameters
@@ -79,8 +85,8 @@
   {
     final LocalDate initialDate = LocalDate.now();
     final List<ScheduledCharge> scheduledCharges = new ArrayList<>();
-    scheduledCharges.add(scheduledInterestBookingCharge(0.01, initialDate, 0, 0, 1));
-    scheduledCharges.add(scheduledInterestBookingCharge(0.01, initialDate, 1, 1, 1));
+    scheduledCharges.add(scheduledInterestBookingCharge(initialDate, 0, 0, 1));
+    scheduledCharges.add(scheduledInterestBookingCharge(initialDate, 1, 1, 1));
 
     final BigDecimal dailyInterestRate = BigDecimal.valueOf(0.01)
         .divide(BigDecimal.valueOf(365.2425), 20, BigDecimal.ROUND_HALF_EVEN);
@@ -90,6 +96,7 @@
     expectedPeriodRates.put(getPeriod(initialDate, 1, 1), dailyInterestRate);
 
     return new TestCase("simpleCase")
+        .interest(BigDecimal.valueOf(0.01))
         .scheduledCharges(scheduledCharges)
         .precision(20)
         .expectedPeriodRates(expectedPeriodRates);
@@ -99,8 +106,8 @@
   {
     final LocalDate initialDate = LocalDate.now();
     final List<ScheduledCharge> scheduledCharges = new ArrayList<>();
-    scheduledCharges.add(scheduledInterestBookingCharge(0.10, initialDate, 2, 0, 3));
-    scheduledCharges.add(scheduledInterestBookingCharge(0.10, initialDate, 4, 2, 2));
+    scheduledCharges.add(scheduledInterestBookingCharge(initialDate, 2, 0, 3));
+    scheduledCharges.add(scheduledInterestBookingCharge(initialDate, 4, 2, 2));
 
     final BigDecimal dailyInterestRate = BigDecimal.valueOf(0.10)
         .divide(BigDecimal.valueOf(365.2425), 20, BigDecimal.ROUND_HALF_EVEN);
@@ -110,6 +117,7 @@
     expectedPeriodRates.put(getPeriod(initialDate, 2, 2), PeriodChargeCalculator.createCompoundedRate(dailyInterestRate, 2, 20));
 
     return new TestCase("bitOfCompoundingCase")
+        .interest(BigDecimal.valueOf(0.10))
         .scheduledCharges(scheduledCharges)
         .precision(20)
         .expectedPeriodRates(expectedPeriodRates);
@@ -119,14 +127,15 @@
   {
     final LocalDate initialDate = LocalDate.now();
     final List<ScheduledCharge> scheduledCharges = new ArrayList<>();
-    scheduledCharges.add(scheduledInterestBookingCharge(0.00, initialDate, 2, 0, 3));
-    scheduledCharges.add(scheduledInterestBookingCharge(0.00, initialDate, 4, 2, 2));
+    scheduledCharges.add(scheduledInterestBookingCharge(initialDate, 2, 0, 3));
+    scheduledCharges.add(scheduledInterestBookingCharge(initialDate, 4, 2, 2));
 
     final Map<Period, BigDecimal> expectedPeriodRates = new HashMap<>();
     expectedPeriodRates.put(getPeriod(initialDate, 0, 3), BigDecimal.ZERO.setScale(20, BigDecimal.ROUND_UNNECESSARY));
     expectedPeriodRates.put(getPeriod(initialDate, 2, 2), BigDecimal.ZERO.setScale(20, BigDecimal.ROUND_UNNECESSARY));
 
     return new TestCase("zeroInterestPerPeriod")
+        .interest(BigDecimal.valueOf(0.00))
         .scheduledCharges(scheduledCharges)
         .precision(20)
         .expectedPeriodRates(expectedPeriodRates);
@@ -141,7 +150,7 @@
   @Test
   public void getPeriodAccrualRatesTest()
   {
-    final Map<Period, BigDecimal> periodRates = PeriodChargeCalculator.getPeriodAccrualInterestRate(testCase.scheduledCharges, testCase.precision);
+    final Map<Period, BigDecimal> periodRates = PeriodChargeCalculator.getPeriodAccrualInterestRate(testCase.interest, testCase.scheduledCharges, testCase.precision);
     Assert.assertEquals(testCase.expectedPeriodRates, periodRates);
   }
 }