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elacap · Jul 24, 2009, 04:01 AM

Situation:
Schedule of payment for damages worth 2,000,000.00 with 100 monthly installment payment, 1st payment due on Nov, 2008. Up to this date, no payment was being made. There is 10% interest on all those unpaid monthly payt.

Questions:
How to compute interest rate for those installment payt that are not due yet, say from Sept 2009 to 2016?

morgaine300 · Jul 25, 2009, 02:11 AM

You're going to have to clarify. You said the interest rate was 10% and then asked how to figure out the interest rate. It was given. So what is it you're actually looking for?

elacap · Jul 25, 2009, 05:53 AM

What I mean is how to compute the interest for those monthly installment payments that are not due yet.
Can we forcast interest rate for the next 7 years? What do you call this kind of computation?

Sorry for the confusion. Thanks.

morgaine300 · Jul 25, 2009, 03:37 PM

You need to call the interest dollar amount "interest" and the rate a "rate." You've just said again that you want to forecast the interest "rate" for the next 7 years. Sounds like what you want is to know the interest dollar amount that each of those payments will consist of.

There are some complications here. One, there's two ways to do the interest. The most common (like you'd normally do for a mortgage or car loan or such) is that the payments are equal and already include interest. The other way is that the payments are principal and then interest is added to that payment, and then each payment goes down as time goes along cause the interest will go down.

The other is that the payments were due starting last November and nothing's been paid. So are they accruing interest this whole time, and if so, how would that be taken care of cause it wouldn't have been figured into the original payments. Or maybe just some late fee of some sort. And... have to know what those payments are too. I can figure that out, but it doesn't mean it'll match whatever they did.

So can't just flat-out answer this.

It also occurs to me that this is actually a homework problem. Why? Cause what kind of company/person has $2 million in damages? Not someone who would come to a place like this to ask such questions.

So, tell me, was this a homework problem? If so, we don't just outright do homework for people -- we expect you to try to work it out first and then we can check what you've done. But all that stuff I said I needed to know still counts. You've paraphrased the whole thing and there's missing information.

elacap · Jul 28, 2009, 05:05 AM

Thank you so much for your response. I really appreciate it.
How I wish I can explain this matter to you further but I think this is not the proper way. Just want to assure you that my question is not a homework.