Western Australian Consolidated Acts Western Australian Consolidated Acts[s. 45]
[Heading amended by No. 19 of 2010 s. 4.]
1 . Formula for calculating percentage rate of
interest
(1) The rate at which
the interest accrues upon the principal is that nominal annual percentage rate
(correct to within 0.5%) which, when applied to the unpaid balances of the
principal calculated according to the actuarial method, will yield a sum equal
to the total amount of the interest.
(2A) In lieu of
applying the actuarial method above, where repayment of the principal and
interest is to be made by equal regular periodic payments, the first of which
is to fall due at the end of the first period then the nominal annual
percentage rate referred to in paragraph (1) may be calculated in
accordance with the following formulae: —
(a) to
calculate the flat rate of interest per cent:
(b) to
convert the flat rate of interest per cent into the nominal annual percentage
rate:
where (in each case)
“F” = the
flat rate of interest per cent
“c” = the
number of payments per annum
“i” = the
total amount of the interest
“n” = the
number of payments
“P” = the
amount financed
“R” = the
nominal annual percentage rate.
(2B) For the purpose
of applying the above formulae, all payments shall be deemed to be equal if
the variance between any one payment only and all other payments does not
exceed 5%.
(3) The disclosure of
a percentage rate which is greater than the percentage rate required to be
disclosed by either of the above methods shall be a sufficient disclosure.
[Clause 1 amended by No. 19 of 2010 s. 51.]