{"id":3305,"date":"2016-10-27T12:00:30","date_gmt":"2016-10-27T12:00:30","guid":{"rendered":"http:\/\/margill.com\/en\/?p=3305"},"modified":"2025-12-02T15:57:55","modified_gmt":"2025-12-02T20:57:55","slug":"collection","status":"publish","type":"post","link":"https:\/\/margill.com\/en\/collection\/","title":{"rendered":"Collection Interest Calculation"},"content":{"rendered":"<h3>See also:<\/h3>\n<ul>\n<li><a href=\"\/en\/judgments\/\">Judgments (Court calculations)<\/a><\/li>\n<li><a href=\"\/en\/late-unpaid-salaries-rent-or-alimony\/\">Late \/ unpaid Salaries, Rent, Alimony<\/a><b><\/b><\/li>\n<\/ul>\n<p class=\"texteFushia\" align=\"left\">The dollar ($) has been used in these examples, but any other currency (\u20ac, \u00a3, F, \u00a5, R, DA, Rs&#8230; etc.) may be used.<\/p>\n<p class=\"texteFushia\" align=\"left\"><span class=\"texteNoir\">Most of the calculations below may use Fixed (unique interest rates) or Variable rates.<\/span><\/p>\n<hr \/>\n<h3>Real-life examples:<\/h3>\n<p><b><a href=\"#1\">Late \/ unpaid accounts receivable (interest between 2 dates)<\/a><br \/>\n<\/b><\/p>\n<p><b><a href=\"#2\">Late \/ unpaid accounts receivable with regular or irregular payments made by the debtor<\/a><\/b><\/p>\n<p><b><a href=\"#3\">Judgment collection<\/a><\/b><\/p>\n<p><b><a href=\"#4\">Late tax payments<\/a><\/b><\/p>\n<p><a name=\"1\"><\/a><\/p>\n<hr \/>\n<h2><b><span class=\"texteOrange\"><span style=\"font-size: small;\">Late \/ unpaid accounts receivable (interest between 2 dates)<\/span><\/span><\/b><\/h2>\n<p>Unpaid account due on May 5, 2003 and still unpaid on October 10, 2004. How much interest is due on this account?<\/p>\n<p>Monthly rate of 2% (24% annually) and compounded monthly according to the terms of the sale.<b><br \/>\n<\/b><\/p>\n<p align=\"center\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/margill.com\/images\/collection1.gif\" alt=\"\" width=\"469\" height=\"319\" \/><\/p>\n<p align=\"left\"><span style=\"font-size: small;\"><b>Results screen<\/b><\/span><\/p>\n<p align=\"center\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/margill.com\/images\/collection1a.gif\" alt=\"\" width=\"565\" height=\"481\" \/><\/p>\n<p><a name=\"2\"><\/a><\/p>\n<hr \/>\n<h2><b class=\"texteOrange\"><span style=\"font-size: small;\">Late \/ unpaid accounts receivable with regular or irregular payments made by the debtor<\/span><\/b><\/h2>\n<h3><b class=\"texteNoir\">Example 1:<\/b><\/h3>\n<p>Debtor owes a significant amount that cannot be paid in one unique payment. There is an agreement between the collection agency to repay in equal payments BUT the debtor does not respect the payment schedule.<\/p>\n<ul>\n<li>$50,000 owed<\/li>\n<li>Debtor will pay $2500 every 2 weeks<\/li>\n<li>Interest rate of 24% annually compounded monthly<\/li>\n<\/ul>\n<p align=\"center\"><span style=\"color: #ff0033;\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/margill.com\/images\/collection2.gif\" alt=\"\" width=\"565\" height=\"383\" \/><\/span><\/p>\n<p align=\"left\">Irregular events:<\/p>\n<ul>\n<li>Missed payments on February 29, 2004<\/li>\n<li>NSF check on April 25, 2004 which imply the payment of a $25 fee<\/li>\n<li>July 4, 2004 payment of only $1000<\/li>\n<li>Extra $5000 payment on September 12, 2004<\/li>\n<\/ul>\n<p>Margill is very powerful to calculate all sorts of irregular payment schedules.<\/p>\n<p align=\"center\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/margill.com\/images\/collection2a.gif\" alt=\"\" width=\"565\" height=\"280\" border=\"1\" \/><\/p>\n<h3 align=\"left\"><b class=\"texteNoir\">Example 2 :<\/b><\/h3>\n<p align=\"left\"><b>Irregular invoices and irregular payments by debtor<\/b><\/p>\n<p align=\"left\">5 bills sent to client at various dates &#8211; interest always starts 30 days later<\/p>\n<ul>\n<li>$ 4500 &#8211; May 10, 2002 (interest starts June 9, 2002)<\/li>\n<li>$ 3450 &#8211; June 2, 2002 (July 2)<\/li>\n<li>$ 5500 &#8211; June 2, 2002 (2 bills on same date) (July 2)<\/li>\n<li>$ 12,000 &#8211; October 1, 2002 (October 31)<\/li>\n<li>$ 7500 &#8211; January 15, 2003 (February 14)<\/li>\n<\/ul>\n<p align=\"left\">Client pays irregularly :<\/p>\n<ul>\n<li>$ 2000 &#8211; August 1, 2002<\/li>\n<li>$ 2500 &#8211; September 15, 2002<\/li>\n<li>$ 5000 &#8211; October 20, 2002 &#8211; turns out to be NSF with $25 fee<\/li>\n<li>$ 7500 &#8211; January 10, 2003<\/li>\n<li>$ 10,000 &#8211; June 5, 2003<\/li>\n<\/ul>\n<p align=\"left\">How much is stilled owed on November 12, 2004? Monthly interest of 2% compounded monthly (could also be simple interest).<\/p>\n<p align=\"left\">Using <b>Recurring payments (Amortization)<\/b>, enter basic information in the data entry screen.<\/p>\n<p align=\"left\">$4500 is the starting principal (first amount due). Although the invoices are irregular, we can create an approximate table which will be edited afterwards. That is why a payment of 1$ is included (we could have used &#8220;Irregular&#8221; payments).<\/p>\n<p align=\"center\"><img decoding=\"async\" src=\"https:\/\/margill.com\/images\/collection2-2.gif\" alt=\"\" \/><\/p>\n<p align=\"left\">The table is then edited to reflect all the events.<\/p>\n<p align=\"left\">The $5000 NSF includes the payment by the debtor (+5000) and on the same day (-5000) (total 0) and $25 in fees charged.<\/p>\n<p align=\"left\">The balance due over a year later is $7301.12.<\/p>\n<p align=\"center\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/margill.com\/images\/collection2-2a.gif\" alt=\"\" width=\"543\" height=\"405\" border=\"1\" \/><\/p>\n<p align=\"left\"><a name=\"3\"><\/a><\/p>\n<hr \/>\n<h2><b class=\"texteOrange\"><span style=\"font-size: small;\">Judgment collection<\/span><\/b><\/h2>\n<p>See <b><a href=\"https:\/\/margill.com\/calculations\/judgments-en.htm#5\">Collection of judgment awards by recurring payments<\/a><\/b><\/p>\n<p align=\"left\"><a name=\"4\"><\/a><\/p>\n<hr \/>\n<h2><b class=\"texteOrange\"><span style=\"font-size: small;\">Late tax payments<\/span><\/b><\/h2>\n<p>Margill includes tax tables for the US, Canada and Australia. Many legal interest rate tables are also included for Europe. You can easily create your country&#8217;s tax tables or we can create them for you.<\/p>\n<p>The following example uses the IRS Underpayments (USA) table:<\/p>\n<p align=\"center\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/margill.com\/images\/collection4.gif\" alt=\"\" width=\"469\" height=\"384\" \/><\/p>\n<p align=\"left\"><b>Results screen:<\/b><\/p>\n<p align=\"center\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/margill.com\/images\/collection4a.gif\" alt=\"\" width=\"565\" height=\"481\" \/><\/p>\n<p>In cases where the debtor can only <b>refund the back taxes through regular (or irregular) payments<\/b>, Margill can easily create a schedule at fixed or variable interest rates. As time goes on, the schedule can be updated to reflect interest rate changes, missed payments, and all other types of payment events. See <a href=\"\/en\/collection\/#2\">Late \/ unpaid accounts receivable with regular or irregular payments made by the debtor<\/a> above.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>See also: Judgments (Court calculations) Late \/ unpaid Salaries, Rent, Alimony The dollar ($) has been used in these examples, but any other currency (\u20ac, \u00a3, F, \u00a5, R, DA, Rs&#8230; etc.) may be used. Most of the calculations below may use Fixed (unique interest rates) or Variable rates. Real-life examples: Late \/ unpaid accounts [&hellip;]<\/p>\n","protected":false},"author":25,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[193,408,404],"tags":[],"class_list":["post-3305","post","type-post","status-publish","format-standard","hentry","category-knowledge-base","category-margill-law-and-standard","category-margill-loan-manager"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.8 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\r\n<title>Collection Interest Calculation Methods and Tools | Margill<\/title>\r\n<meta name=\"description\" content=\"Learn how to perform accurate collection interest calculations with Margill tools, covering overdue amounts, accrued interest, payment adjustments, and repayment scenarios.\" \/>\r\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" 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