CALCULATION OF TRUE ANNUAL PERCENTAGE RATE OF INTEREST
[sections 2 & 18]
(Amended 69 of 1988 s. 34)
1. Any amount paid or payable to the lender under the agreement (other than simple interest charged in accordance with the proviso to section 22(1)) shall be appropriated to principal and interest in the proportion that the total amount of principal bears to the total amount of the interest. (Amended 69 of 1988 s. 34)
2. The amount of principal outstanding at any time shall be taken to be the balance remaining after deducting from the principal the total of the portions of any payments appropriated to principal in accordance with paragraph 1.
3. The several amounts taken to be outstanding by way of principal during the several periods ending on the dates on which payments are made shall be multiplied in each case by the number of calendar months during which those amounts are taken to be respectively outstanding, and there shall be ascertained the aggregate amount of the sum so produced.
4. The total amount of the interest shall be divided by one-twelfth part of the aggregate amount mentioned in paragraph 3 and the quotient, multiplied by one hundred, shall be taken to be the rate of interest per cent per annum.
5. If having regard to the intervals between successive payments it is desired so to do, the calculation of interest may be made by reference to weeks instead of months, and in such a case the foregoing paragraphs shall have effect as though in paragraph 3 the word "weeks" were substituted for the words "calendar months", and in paragraph 4 the words "one-fifty-second" were substituted for the words "one-twelfth".
6. Where any interval between successive payments is not a number of complete weeks or complete months, the foregoing paragraphs shall have effect as though 1 day were one-seventh part of a week or one-thirtieth part of a month (as the case may be).