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I have a number of accounts which were over charged interest at a rate of $22.5\%$ (most accounts, some are $21.5\%,19.5\%$).

All these accounts needed to be charged $18.5\%$. I have the total interest paid to date figures and need to reverse the overcharged amounts.

I am calculating this in Excel and am not sure if I have done it correctly.

I will use one account as an example:

Total interest charged = 1591.48 @ 22.5%. Should have been 18.5%
My formula is 1591.48*0.185/0.225
The result is 1308.55 which gives a difference of 282.93.

Could someone please tell me if this is correct. Thanks in advance

Tunk-Fey
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6dev6il6
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    Assuming these are annual rates, your calculation is correct as long the interests are paid annually rather than, say semi annually. – Lost1 Jul 02 '14 at 12:48
  • Indeed. To be more explicit, the information necessary to answer your question is: "How is the interest compounded?" – Thoth19 Jul 02 '14 at 12:52
  • Personally, I would reconstruct all the transactions in the account, including interest charged, in the Excel spreadsheet; for each interest charge I would get the interest rate from a cell, for example the formula might be "=$b$1c15", never "=0.225c15". Then I'd make a copy of that entire page, and change the interest rate to 18.5%. That would account for the improper charges due to compound interest. – David K Jul 02 '14 at 13:11
  • Thanks for your comments. 1st, @Lost1 yes these are annual rates, thanks for confirming. 2nd, I am making use of cells, I just changed it to display actual figures on here so people could see what was being calculated, thanks though – 6dev6il6 Jul 02 '14 at 13:20

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