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8 1/2 % statutory interest

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13 years 6 months ago #431 by jarek
8 1/2 % statutory interest was created by jarek
Hi,
maybe my math is off here, but can someone explain to me how 8.5% on 262.25 comes up to 8.49?
Thanks.

Total debt value: (principal) = £262.25
Total days overdue: = 139 days
Total Interest owed = £8.49
Compensation = £40.00
Total owed = £310.74

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13 years 6 months ago #432 by David J
Replied by David J on topic Re:8 1/2 % statutory interest
Hello Wysocki

£262.25 times by 8.5% = 22.29125

22.29125 divided by 365 = 0.06107192 (the daily interest rate).

0.06107192 times 139 days = £8.48899658 rounded up to £8.49

So debt times interest rate divided by 365 times number of days late.

I hope that helps.



David

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13 years 6 months ago #433 by jarek
Replied by jarek on topic Re:8 1/2 % statutory interest
Thanks David,
I did not know that the 8.5% is an annual rate.
Rate is established every 6 months, right?
With such a small penalty, no wonder businesses do not bother to pay on time.
Still, it isn't the same way banks calculate interest on our debt, but no surprise here.
Anyway, thank you for your response.

Wysocki

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