Commercial Law: Sample Interest Calculation
On March 10, 2024, X incurred a loan from Y amounting to Php 100,000 with payment due in one year. The loan was subject to an interest rate of 12% per annum. On March 11, 2026, Y filed a Complaint for Sum of Money against X. How much will X pay on March 11, 2029? Periods: March 11, 2025 = due date March 11, 2029 = 5 years from loan; 4 years from default; 3 years from judicial demand Formula Total Amount Due = Principal + I MI + I CI + I IMI + I ICI Monetary Interest I MI = Principal x Rate x Time I MI = (Php 100,000) x (12% p.a.) x (5 years) I MI = Php 60,000 Compensatory Interest (See Nacar) I CI = Principal x Rate x Time I CI = (Php 100,000) x (6% p.a.) x (4 years) I CI = Php 24,000 Interest on Monetary Interest I IMI = Monetary Interest x Rate x Time I IMI = [(Php 100,000) x (12% p.a.) x (3 years)] x (6% p.a.) x (3 years) I IMI = [Php 3...