Announcement

Collapse
No announcement yet.

Interest on arrears? How do,you calculate it

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • Interest on arrears? How do,you calculate it

    So the SA carries a statement.

    This order bears interest at the rate of three (3%) per year.

    So the issue is non payment of section 7 expenses. Daycare.

    How do we calculate the interest?

    3% on the present outstanding amount? Probably not. He is 7 months in arrears. So Dec payment is 7 months overdue, Jan is 6 months overdue.

    Do I,then compound the monthly interest? Its not a lot, its more sending a message that you have a legal obligation to pay daycare and it is not going away just by ignoring it, in fact like any debt it will increase.

    .

  • #2
    Originally posted by Beachnana View Post
    So the SA carries a statement.

    This order bears interest at the rate of three (3%) per year.

    So the issue is non payment of section 7 expenses. Daycare.

    How do we calculate the interest?

    3% on the present outstanding amount? Probably not. He is 7 months in arrears. So Dec payment is 7 months overdue, Jan is 6 months overdue.

    Do I,then compound the monthly interest? Its not a lot, its more sending a message that you have a legal obligation to pay daycare and it is not going away just by ignoring it, in fact like any debt it will increase.

    .
    Interest isn't compounded and is calculated monthly. I used a spreadsheet to calculate the interest.

    The excel formula is:
    =F3*G3*(H3/I3)
    Where F3=amount in arrears
    G3=interest rate
    H3=Days late
    I3=365 (a year)

    Use the formula for each month's overdue amount. Add up each month's interest and that's the total interest due.

    Does that help?

    Comment


    • #3
      I think that is what I have done, so yes thanks.

      Comment

      Our Divorce Forums
      Forums dedicated to helping people all across Canada get through the separation and divorce process, with discussions about legal issues, parenting issues, financial issues and more.
      Working...
      X