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# Credit Management Calculation Help

rebecca2
Feels At HomeRegistered Posts:

**49**
Hi everyone, could anybody give me a pointer on how to calculate the answer to question 1.3 (b) on the second practise assessment on MyAAT?

The correct answer is £53.26.

The gross amount would be £3600 but I am unsure which calculation I would need to use to achieve the answer?

Thanks all x

**'Small companies are eligible to charge interest to customers who settle their debts late. The interest rate is calculated as 8% above base rate and is charged on the gross amount of the debt due (VAT inclusive at 20%)'**

(b) What is the interest chargeable on a net debt of £3000 which is 60 days late when the base rate is 1%?(b) What is the interest chargeable on a net debt of £3000 which is 60 days late when the base rate is 1%?

The correct answer is £53.26.

The gross amount would be £3600 but I am unsure which calculation I would need to use to achieve the answer?

Thanks all x

0

## Comments

296So the interest rate is 8+1 = 9% for the year.

The interest is applicable to the gross amount;

So your gross amount x the percent for the year...

3600 x 9% = 324

So you must then divide by 365 and multiply by how many days they are overdue, which in this case is 60.

324 x 60/365 = 53.26

Hope this helps x

49Thank you so much! It was the dividing by 365 which I was missing! Massive help for me, thank you :001_smile:x

49Thank you so much! It was the dividing by 365 which I was missing! Massive help for me, thank you :001_smile:x

296