How do I calculate a penalty for late payment?

How do I calculate a penalty for late payment?

To calculate a penalty for late payment, you typically need the original amount due, the interest rate, and the number of days late.

What interest rate should I use?

The interest rate can vary based on your agreement or local laws. Common rates range from 1% to 5% per month.

Can you give me an example calculation?

Sure! If you owe $1,000 and are 30 days late with a 2% monthly penalty, the calculation would be $1,000 x 0.02 x 1 = $20.

Are there any maximum limits on penalties?

Yes, many jurisdictions have laws that cap the maximum penalty amount, so it's important to check local regulations.