What is a part payment?
A part payment arises when only part of a sum of money that is due and payable is paid.
An example is where $100,000-00 is due for payment on 15 February.
Assume that no money is paid on the due date
If $27,000-00 is then paid on 3 March that is a part payment. If an amount of $$15,000-00 is then paid on 27 April that is another part payment. That would leave a residue of $58,000-00 that has not been paid.
Interest is payable on all three amounts but the calculation for each is different.
How to calculate interest on part payments
There are a number of concepts used in this calculation that will only be clear if you read the Calculation fundamentals page first.
The interest due on the $27,000-00 amount will be calculated on the basis of a start date of 16 February and an end date of 2 March.
The interest due on the $15,000-00 amount will be calculated on the basis of a start date of 16 February and an end date of 26 April.
Interest will continue to accrue on the residue of $58,000-00 until it is paid.