Example 4 Scenario  

This example is based on the facts in Example 3. See entire scenario below for full version.

 

In the previous example:

 

In this example:

 

Demonstrated Features

 

Points of Interest

 

Multimedia Presentation

 

Entire Scenario

This example calculates interest on Simple Principal ($9,000) using applicable Queensland Court Default Judgment interest rates from 16 July 2004 to 21 Sep. 2007 inclusive. It also determines the jurisdiction, scale and calculates Scale Court costs.

 

Calculation Results

The results generated by the program are shown below.

 

---

 

 

 

 

(Qld) Default Judgment

MAGISTRATES COURT (SCALE E)

 

 

 

 

 

 

 

 

 

PARTICULARS OF INTEREST

 

(a) On 16/07/2004 the principal was $9,000.00, the interest rate was 9% per annum, and the days per year base used to convert the annual interest rate into the daily interest rate was 366.

 

(b) Calculated interest on 31/12/2004 because it was the last day before the days per year base changed (from 366 to 365) on 01/01/2005. Interest on $9,000.00 (principal) at 9% per annum × 169 days (16/07/2004 to 31/12/2004 inclusive) ÷ 366 (days per year) is $374.02, resulting in a new unpaid interest balance of $374.02 ($0.00 plus $374.02).

 

(c) On 01/01/2005 the days per year base used to convert the annual interest rate into the daily interest rate changed to 365. The daily interest rate is now 0.02465753% on debit balances.

 

(d) Calculated interest on 21/09/2007. Interest on $9,000.00 (principal) at 9% per annum × 994 days (01/01/2005 to 21/09/2007 inclusive) ÷ 365 (days per year) is $2,205.86, resulting in a new unpaid interest balance of $2,579.88 ($374.02 plus $2,205.86).

 

(e) As at 21/09/2007 the total amount owing is eleven thousand five hundred and seventy-nine dollars and eighty-eight cents ($11,579.88) comprised of principal of nine thousand dollars and zero cents ($9,000.00) and accumulated interest of two thousand five hundred and seventy-nine dollars and eighty-eight cents ($2,579.88).

 

(f) Total interest for the period 16/07/2004 to 21/09/2007 (1163 days) was two thousand five hundred and seventy-nine dollars and eighty-eight cents ($2,579.88).

 

(g) Interest on $9,000.00 continues to accumulate at two dollars and twenty-two cents ($2.22) per day on and from 22/09/2007.

 

 

 

 

PARTICULARS OF COSTS

MAGISTRATES COURT (SCALE E)

 

Item No.                                   Description                                       Amount     

4                                          Obtaining judgment by default                     $155.00    

                                          Total                                             $155.00    

 

Costs calculated using: Uniform Civil Procedure (Fees) Regulation 1999 incorporating amendments as at 27/11/2006. Appeal Costs Fund Regulation 1999 Reprint 2B incorporating amendments as at 27/11/2006. Uniform Civil Procedure Rules 1999 Reprint 4F as at 13/11/2006.

 

---

INTEREST CALCULATION TABLE

DATE	DESCRIPTION	DAYS	AMOUNT	BALANCE	PRINCIPAL	INTEREST
16/07/2004	Interest rate started at 9% on debit balances (0.02459016% per day).			$9,000.00DR	$9,000.00DR	$0.00DR
31/12/2004	Interest (16/07/2004 to 31/12/2004 inclusive) $9,000.00 × 0.02459016% × 169 days = $374.02.	169	$374.02DR	$9,374.02DR	$9,000.00DR	$374.02DR
01/01/2005	Days per year changed to 365. Daily interest rate now 0.02465753% on debit balances.			$9,374.02DR	$9,000.00DR	$374.02DR
21/09/2007	Interest (01/01/2005 to 21/09/2007 inclusive) $9,000.00 × 0.02465753% × 994 days = $2,205.86.	994	$2,205.86DR	$11,579.88DR	$9,000.00DR	$2,579.88DR
	Final Balance	1163		$11,579.88DR	$9,000.00DR	$2,579.88DR

 

 

---

 

Calculation Notes

 

The following information is provided to give you a complete understanding of the calculation, so even the finest details are available if ever needed.

 

1. The debit interest rates have been taken from the debit rates file (qldmctpr).

 

2. The main calculation options (such as days per year, credit Application order and rounding) have been taken from the debit rates file where they are embedded as part of the rates specification. These options can be changed for individual calculations in Settings|Options, or for all new cases in Settings|Setup.

 

3. The credit interest rates (if required) have been taken from the settings on the main form.

 

4. Decimal Rounding. When converting from an annual rate of interest to a daily rate of interest, and except if overridden in an interest rates file, the program has rounded-up to 8 decimal places, eg 8.12512324924555 is rounded to 8.12512325%. You can change the setting in Settings|Options.

 

5. Calendar Year. You are using the "Calendar Year" method for converting the annual interest rate to the daily interest rate. In many cases this is the most accurate setting but you should be aware that it adds complexity to the calculation report because it requires additional interest calculations before and after each leap year. If you require a simpler report and it is appropriate to do so then choose a different setting. The setting is either embedded in the Options section of the selected interest rate file or else it is set in Settings|Options on the main form. In either case you can change or override the setting for a particular calculation in Settings|Options. Please note that such settings only apply to the current calculation. You can change the default value that affects all new calculations in Settings|Setup. The default value cannot however automatically override any setting in the Options part of an interest rate file - you still have to override on an individual basis as explained above.