This is part of the optional ARO module for EZLease.
This applies to both the inflation rate and the credit-adjusted risk-free rate. If you choose pre-compounding, the actual per-day or per-month interest is the stated rate divided by 365.25 or 12, respectively. When this is compounded, the effective interest rate will be higher; for instance, a stated rate of 6% compounded monthly (0.5% per month compounded) is effectively 6.16778%.
If you choose post-compounding, the interest rate will be calculated so that after compounding, the annual rate is the rate stated.