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Sample Finance Charge and Interest Computation


A. Finance Charge

Finance Charges are imposed on your China Bank Mastercard if you pay any amount below the Statement Balance.

Sample Computation:

China Bank Platinum Mastercard
A. Finance Charge Rate
B. Previous Statement Date
C. Current Statement Date
D. Previous Statement Balance
E. Previous Finance Charge
F. Payment Amount
G. Payment Date


3.25%
05/09/2019
06/09/2019
100,000.00
5,000.00
65,000.00
05/29/2019

Step 1: Deduct the Finance Charge (E) reflected on your Previous Statement of Account from your Previous Statement Balance (D). Multiply the result with the number of days from the day after your Previous Statement Date (B) until Payment Transaction Date (G), and the Daily Retail Interest Rate (A / 30). The Daily Retail Interest Rate is derived by dividing the Finance Charge Rate by 30.

Previous Statement Balance less Finance Charge
(D – E)
Number of days from day after your Previous Statement Date to Payment Transaction Date Daily Retail Interest Rate
(A / 30)
Interest 1
95,000 20 0.108333% 2,058.33

Step 2: New Retail Transactions reflected in your current Statement of Account will not earn Finance Charges.

Transaction Amount Transaction Posting Date Number of days from Transaction Posting Date to Current Statement Date Daily Retail Interest Rate
(A / 30)
Interest 2
5,000 05/18/2019 23 - -
6,000 06/05/2019 5 - -
Total Interest -

Step 3: Deduct the Payment Amount (F) from your Previous Statement Balance (D). Multiply the result with the number of days from Payment Transaction Date (G) until day before your Current Statement Date (C) and with the Daily Retail Interest Rate (A / 30).

Previous Statement Balance less Payment
(D – F)
Number of Days from Payment Transaction Date until day before Current Statement Date Daily Retail Interest Rate
(A / 30)
Interest 3
35,000 11 0.108333% 417.08

Step 4: Sum up the totals computed in steps 1 to 3 to arrive at the total Finance Charge as reflected in your Current Statement of Account.

Interest 1 2,058.33
Interest 2 -
Interest 3 417.08
FINANCE CHARGE 2,475.41
 

Note: The above computation is based on the assumption that the cardholder regularly pays the Minimum Amount Due or any amount that is not equal to the Statement Balance.

B. Effective Interest on Installment Loans

Interest charges are imposed on installment transactions that fall under the regular Installment Program.

Sample Computation:

Principal Amount
Monthly Add-on Interest Rate
Monthly Amortization
Installment Term
Annualized Effective Interest Rate (EIR)

: 10,000
: 1.00%
: 933.33
: 12
: 21.46%

Illustration 1

Month Monthly Amortization Principal Component Interest Component Outstanding Principal
0 -     10,000.00
1 933.3333 754.52  178.81 9,245.48
2 933.3333 768.02 165.32 8,477.46
3 933.3333 781.75  151.59 7,695.71
4 933.3333 795.73 137.61 6,899.99
5 933.3333 809.95 123.38 6,090.03
6 933.3333 824.44 108.90 5,265.59
7 933.3333 839.18 94.15 4,426.42
8 933.3333 854.18  79.15 3,572.23
9 933.3333 869.46  63.88 2,702.77
10 933.3333 885.01  48.33 1,817.77
11 933.3333 900.83  32.50 916.94
12 933.3333  916.94  16.40 0.00
Total 11,200.00  10,000.00  1,200.00  

 

Illustration 2

Principal Amount
(x) Factor Rate
10,000.00
(x) 0.0933333
Monthly Amortization
(x) Installment Term
933.33
(x) 12
Total Installment Balance 11,200.00

Updated as of 06 June 2019

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