Interest Rates > Tiered Rates

Normal (only depends on dates)

Amount (depends on date and amount)

You need to fill in two parts.

Enter a record in each grid for each date that the rates changed. Select the grid, click the + button and enter the information.

Observe the displayed format when entering the From date.

The % Default field controls the rate that will be applied if the Principal on which interest is to be calculated does not have a matching Amount tier (see next).

Save the record by clicking the tick button.

Now enter a record for each amount tier by selecting the bottom grid and clicking the + button.

Enter the amount from which the interest rate applies, then the percentage and an optional comment.

Save by clicking the tick button.

Repeat for as many amount tiers as you need.

Note: The amount figure can never be negative and you will receive an error message if you try to enter a negative number.

If you want to enter interest rates that apply to credit balances (aka negative) then you must enter these in the section that caters for Interest on Credit Balances. Note: even then, you must not enter a negative number. Numbers will be read as if they are negative.

Example 1

The following calculation demonstrates the amount-dependent tier rate.

Assume a debt of $4000 has been owing for the period 31 Dec 2005 to 24 Feb 2007.

Calculation Result

•	Calculated interest on four thousand dollars and zero cents ($4,000.00) for the period 31/12/2005 to 24/02/2007 inclusive, a period of 421 days.

•	Total interest is one hundred and eighteen dollars and ninety cents ($118.90).

•	As at 24/02/2007 the total amount owing is four thousand one hundred and eighteen dollars and ninety cents ($4,118.90) comprised of principal of four thousand dollars and zero cents ($4,000.00) and accumulated interest of one hundred and eighteen dollars and ninety cents ($118.90).

•	Interest on $4,000.00 continues to accumulate at zero dollars and thirty-two cents ($0.33) per day on and from 25/02/2007.

PARTICULARS OF INTEREST

(a) On 31/12/2005 the principal was $4,000.00, the interest rate was 5% per annum, and the days per year base used to convert the annual interest rate into the daily interest rate was 365.

(b) Calculated interest on 31/12/2005 because it was the last day before the interest rate changed on 01/01/2006. Interest on $4,000.00 (principal) at 5% per annum × 1 day (31/12/2005) ÷ 365 (days per year) is $0.55, resulting in a new unpaid interest balance of $0.55 ($0.00 plus $0.55).

(d) Calculated interest on 29/06/2006 because it was the last day before the interest rate changed on 30/06/2006. Interest on $4,000.00 (principal) at 2% per annum × 180 days (01/01/2006 to 29/06/2006 inclusive) ÷ 365 (days per year) is $39.45, resulting in a new unpaid interest balance of $40.00 ($0.55 plus $39.45).

(e) On 30/06/2006 the interest rate on debit balances changed to amount-dependent rates (namely 3% per annum, then 5% from $5,000.00, then 6% from $6,000.00, then 7% from $7,000.00, then 8% from $8,000.00, then 9% from $9,000.00).

(f) Calculated interest on 24/02/2007. Interest on $4,000.00 (principal) at 3% per annum × 240 days (30/06/2006 to 24/02/2007 inclusive) ÷ 365 (days per year) is $78.90, resulting in a new unpaid interest balance of $118.90 ($40.00 plus $78.90).

(g) As at 24/02/2007 the total amount owing is four thousand one hundred and eighteen dollars and ninety cents ($4,118.90) comprised of principal of four thousand dollars and zero cents ($4,000.00) and accumulated interest of one hundred and eighteen dollars and ninety cents ($118.90).

(h) Total interest for the period 31/12/2005 to 24/02/2007 (421 days) was one hundred and eighteen dollars and ninety cents ($118.90).

(i) Interest on $4,000.00 continues to accumulate at zero dollars and thirty-two cents ($0.33) per day on and from 25/02/2007.

Example 2

The following calculation demonstrates the amount-dependent tier rate.

Assume a debt of $7500 has been owing for the period 31 Dec 2005 to 24 Feb 2007.

Calculation Result

•	Calculated interest on seven thousand five hundred dollars and zero cents ($7,500.00) for the period 31/12/2005 to 24/02/2007 inclusive, a period of 421 days.

•	Total interest is four hundred and twenty dollars and twenty-one cents ($420.21).

•

As at 24/02/2007 the total amount owing is seven thousand nine hundred and twenty dollars and twenty-one cents ($7,920.21) comprised of principal of seven thousand five hundred dollars and zero cents ($7,500.00) and accumulated interest of four hundred and twenty dollars and twenty-one cents ($420.21).

•	Interest on $7,500.00 continues to accumulate at one dollar and forty-three cents ($1.44) per day on and from 25/02/2007.

PARTICULARS OF INTEREST

(a) On 31/12/2005 the principal was $7,500.00, the interest rate was 5% per annum, and the days per year base used to convert the annual interest rate into the daily interest rate was 365.

(b) Calculated interest on 31/12/2005 because it was the last day before the interest rate changed on 01/01/2006. Interest on $7,500.00 (principal) at 5% per annum × 1 day (31/12/2005) ÷ 365 (days per year) is $1.03, resulting in a new unpaid interest balance of $1.03 ($0.00 plus $1.03).

(d) Calculated interest on 29/06/2006 because it was the last day before the interest rate changed on 30/06/2006. Interest on $7,500.00 (principal) at 2% per annum × 180 days (01/01/2006 to 29/06/2006 inclusive) ÷ 365 (days per year) is $73.97, resulting in a new unpaid interest balance of $75.00 ($1.03 plus $73.97).

(f) Calculated interest on 24/02/2007. Interest on $7,500.00 (principal) at 7% per annum × 240 days (30/06/2006 to 24/02/2007 inclusive) ÷ 365 (days per year) is $345.21, resulting in a new unpaid interest balance of $420.21 ($75.00 plus $345.21).

(g) As at 24/02/2007 the total amount owing is seven thousand nine hundred and twenty dollars and twenty-one cents ($7,920.21) comprised of principal of seven thousand five hundred dollars and zero cents ($7,500.00) and accumulated interest of four hundred and twenty dollars and twenty-one cents ($420.21).

(h) Total interest for the period 31/12/2005 to 24/02/2007 (421 days) was four hundred and twenty dollars and twenty-one cents ($420.21).

(i) Interest on $7,500.00 continues to accumulate at one dollar and forty-three cents ($1.44) per day on and from 25/02/2007.