Annual Interest Rate

Overview

Specify the Annual Interest Rate you wish to charge on past due balances.

An 18% annual interest rate is typical and that works out to 1.5% per month.

The actual calculation is performed as follows:

Let's assume a $1,000.00 balance due that is 30 days late.

First we take the 18% and divide it by 100. This allows our annual interest rate to function as a factor in the math we are going to do.

18 / 100 = .18

Next we divide by 365 to get our daily interest factor.

.18 / 365 = .000493

Now that we have our daily factor we multiply it by the number of days we want to calculate interest for. In our example, 30 days.

.000493 × 30 = .01479

Now we take this result and multiply it by our balance due which is $1,000.00.

$1,000.00 × .01479 = $14.79

$14.79 is the amount of interest calculated for the 30-day period.

Time59 will do all of this math for you automatically.