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Late Payments Interest calculation question

A customer owes £3000, exc VAT and it is 45 days late. The current base rate is 1.5%. Calculate the interest charge.

So, I did 1.5 + 8 = 9.5%
(0.095 x 3000) = £285 annual interest
(285/365) = £0.78 interest per day
(0.78 x 45) = £35.14

But the answer is apparently £42.16, please tell me where i am going wrong?! Thanks.

Answers

  • AlisonSwansonAlisonSwanson Registered, Tutor Posts: 209
    You need to include VAT - Gross amount x 9.5%

    Then multiply by 45/365.
    gabriellenlewis
  • gabriellenlewisgabriellenlewis AAT Student Posts: 129
    edited July 2017

    You need to include VAT - Gross amount x 9.5%



    Then multiply by 45/365.</blockquote

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