how to calculate interest from the due date to the date of payment ( accounts)
Answers
Answer:
It is calculated in the following manner:
ADVERTISEMENTS: (1) Fix one of the due dates as the base date. (2) Calculate the number of days of each one of the other due dates away from the base date. (3) Multiply each amount by its respective number of days as calculated in the second step.
Procedure for calculation of Average Due Date, when lending in installments but repayment in one lump sum, is as follows:
1. Take any convenient date (preferably the first due date) as the Starting Point or Zero Date or Start Date or Focal Date or Base Date.
2. Count the number of days of each transaction from the base date.
3. Multiply the amount of each transaction with the number of days thus calculated
4. Add all the products so obtained.
5. Add the amount of all transactions.
6. Divide the total products by total amount (of all items)
7. The result of (6) is the number of days by which average due date is