Western Australian Consolidated Acts Western Australian Consolidated Acts[s. 3(2)(e)(ix)]
[Heading inserted by No. 19 of 2010
s. 19(10).]
1. Formula for calculating percentage rate of
terms charges
(1) The rate at which
the terms charges accrues upon the principal is that nominal annual percentage
rate (correct to within one-half of one per cent) 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 terms charges.
(2A) In lieu of
applying the actuarial method above, where repayment of the principal and
terms charges 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
“t”
= the total amount of the terms charges
“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.
[Fifth Schedule inserted by No. 107 of 1973
s. 29; amended by No. 19 of 2010 s. 51.]
