A01042

1/3/2002

1/3/2002

CAR_PRO Any Version

CLOSED

Descrepency in Interest charges on in-house finance deal. The actual amount of interest that is collected does not match the amount displayed on the Deal Info - Finance tab.

Descrepency in Interest charges on in-house finance deal. The actual amount of interest that is collected does not match the amount displayed on the Deal Info - Finance tab. The amount of descrepency can be higher or lower.

The finance tab uses the following formula to calculate the initial projected interest charge... ((Payment x Term) - AmountFinanced). This simple formula does not take in to concideration that when all the principal for a loan has been collected, the loan is paid. Look at the following example... AmountFinanced = 3242.14, Term = 33 Mos, Monthly Payment = 126.49 On the finance tab the finance charge = 932.03 or (126.49 x 33)-3242.14 assuming the customer makes all the payments on the exact due dates after the 32nd payment the total amount of principal paid in will be $3120.32. This leaves a remaining principal of only 121.82 and the final interest charge for the final pay period is equal to $1.88. 121.82 + 1.88 = 123.70 so the final payment due is a little less the the normal payments of 126.49 and this is what creates the descrepency.

No solution required. The described behavior is by design and the calculations are correct.

Knowledge Base Article
Article#	A01042
Date	1/3/2002
Applies To	CAR_PRO Any Version
Status	CLOSED

Description	Descrepency in Interest charges on in-house finance deal. The actual amount of interest that is collected does not match the amount displayed on the Deal Info - Finance tab.
Symptoms	Descrepency in Interest charges on in-house finance deal. The actual amount of interest that is collected does not match the amount displayed on the Deal Info - Finance tab. The amount of descrepency can be higher or lower.
Cause	The finance tab uses the following formula to calculate the initial projected interest charge... ((Payment x Term) - AmountFinanced). This simple formula does not take in to concideration that when all the principal for a loan has been collected, the loan is paid. Look at the following example... AmountFinanced = 3242.14, Term = 33 Mos, Monthly Payment = 126.49 On the finance tab the finance charge = 932.03 or (126.49 x 33)-3242.14 assuming the customer makes all the payments on the exact due dates after the 32nd payment the total amount of principal paid in will be $3120.32. This leaves a remaining principal of only 121.82 and the final interest charge for the final pay period is equal to $1.88. 121.82 + 1.88 = 123.70 so the final payment due is a little less the the normal payments of 126.49 and this is what creates the descrepency.
Solution	No solution required. The described behavior is by design and the calculations are correct.