# Discounted cash flows for bond valuation: exponential and simplified

At the moment I'm working with a banking system that calculates the discounted cash flows of a bond product in the following manner:

It uses the 'regular', exponential way of calculating discounted cash flows which can be translated into this equation:

$$\frac{1}{(1 + \text{yield})^t}$$

where:

$$t = \frac{\text{number of days between the valuation date and the maturity date}}{\text{number of days in a year}}$$

However, for the last year before the maturity, when $t \leq 1$, it uses the simplified method instead:

$$\frac{1}{ 1 + \text{yield} \times t}$$

I don't really know why this change in calculations happens, instead of just using the exponential method for all the flows. It is even stranger that it takes the last year and not the last coupon into account.

Does anyone know what financial/business/mathematical reasons could be behind such a behaviour?