notionalamount
A notional amount refers to a specified sum of money used as a basis for calculating payments, interest, or other financial obligations in a contract. It is not an amount that is actually exchanged between parties but rather a reference point for determining the value of a transaction. For example, in an interest rate swap, the notional amount is the principal on which interest payments are calculated. Neither the principal itself nor the entire interest payments might be exchanged, but the difference between them is.
This concept is frequently encountered in financial derivatives like swaps, futures, and options. The notional amount