1. What is the Interest Calculation on Past Due Invoices?

This calculator determines the interest accrued on past due invoices based on the invoice amount, annual interest rate, and number of days the payment is late. It helps businesses and individuals calculate appropriate late payment charges.

2. How Does the Calculator Work?

The calculator uses the interest calculation formula:

Where:

• \( I \) — Interest (currency units)
• \( A \) — Invoice amount (currency units)
• \( R \) — Annual interest rate (%)
• \( D \) — Days late (days)

Explanation: The formula calculates daily interest by converting the annual rate to a daily rate (R/100/365), then multiplies by the principal amount and number of days late.

3. Importance of Interest Calculation

Details: Accurate interest calculation ensures fair compensation for delayed payments, helps maintain cash flow, and encourages timely payments from customers.

4. Using the Calculator

Tips: Enter the original invoice amount in currency units, annual interest rate as a percentage, and number of days the payment is late. All values must be valid positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Is this calculation method legally acceptable?
A: This uses standard simple interest calculation, but always check local regulations and contract terms for specific requirements.

Q2: Can I use this for compound interest calculations?
A: No, this calculator uses simple interest. For compound interest, a different formula would be needed.

Q3: What's the difference between annual rate and daily rate?
A: The annual rate is divided by 365 to get the daily interest rate for calculation purposes.

Q4: Should I include weekends and holidays in days late?
A: Typically, all calendar days are included unless specified otherwise in your contract terms.

Q5: Can this calculator handle different currency formats?
A: The calculator works with numerical values only. Currency symbols and formatting should be applied to the results as needed.