BG5150 Posted October 23, 2020 Posted October 23, 2020 In September, I did a lost earnings calc on the VFCP site with these figures (among several other entries): Principal: 12,132.67 Loss Date: 4/29/2019 Recovery Date: 5/2/2019 Final Payment: 9/28/20 Amount Due: $6.40 But, they never made the correction, so I'm re-calcing the interest with a Final Payment of 10/28/20 this time. I entered: Principal: 12,132.67 Loss Date: 4/29/2019 Recovery Date: 5/5/2019 Final Payment: 9/28/20 Amount Due: $12.83 Notice I made a small mistake. The Recovery Date is 3 days later. And the amount due is MORE THAN TWICE AS MUCH! When I run the original figures again with 10/28/2020 Final, it gives me the $6.40 again. Does it make sense that a Recover Date merely 3 days later would result in a 100% higher result? QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
RatherBeGolfing Posted October 23, 2020 Posted October 23, 2020 At first thought, it seemed off. But, you are talking about such a short loss period that an extra day is a significant increase. If it is 4 days late and you add 1 more day, its a 25% increase. If it is 104 days late and you add 1 day, it is less than 1% increase. The math: 4/30 is $2.13 5/1 is $4.27 5/2 is $6.40 5/3 is $8.53 5/4 is $10.66 5/5 is $12.80 5/7 is $17.06 5/15 is $34.10 Counting 4/29 as a day in the loss period: Amount doubles from 2 days to 3 days (2.13 to 4.27) +1 day Amount doubles from 3 days to 5 days (4.27 to 8.53) +2 days Amount doubles from 5 days to 9 days (8.53 to 17.06) +4 days Amount doubles from 9 days to 17 days (17.06 to 34.10) +8 days The amount due doubles as the number of days late you add to the prior number of days doubles. Bill Presson and Luke Bailey 2
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now