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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 $1000.00 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 calcuate interest for. In our example... 30.
.000493 * 30 = .01479
Now we take this result and multiply it by our balance due which is $1000.00.
$1000.00 * .01479 = $14.79
$14.79 is the amount of interest calculated for the 30 day period.
Of course Time59 will do all of this math for you but we thought you'd like to know how it works!
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