Check Yourselves. FREE Excel File (from below on this page). Key in your own options see results!

updated 03 July 2008, 15.30hrs. Menu (Link):  XL Downloadspage  What I Did    What Westpac Bank did    What you can do    Solution

Home Page    Basic Facts VIEW Documents  RATE INCREASE   When     LOAN WILL NEVER BE PAID OFF !!!

 READY RECKONER  [Compound Interest Rate to Simple Interest Rate] 

VIEW Jan 2008 COURT DECISION Confirming the Compounding Monthly

Breif features of this case:

1.             The question before Justice Bowman on 18th June 2007 was to decide if there is a case at all in my submission to proceed further with hearings or not? This is the meaning of Section 75 application.

2.             Justice Bowman heard the counsel for NAB for 25 minutes and then my arguments to continue the hearing for 50 minutes. On 20th June 2007 he allowed me to submit for 40 minutes against CBA on behalf of my (so called) friend Mr Rao who claimed not knowing much in law but immediately after 20th June 07 he told me that he believed Justice Bowman would ‘club both cases’ and give his judgment, a point I never came across before and ignored that day, but that is what Justice Bowman did!!!.

3.             At the end of (both days of) my submissions, he ‘reserved the judgment’. No further contacts or communication until 23rd January 2008 when he decided to dismiss my case not to continue the hearing further, on the only grounds that the loan agreement showed the ‘total amount repayable over the term of loan’. Please read below…..

If Loan statement shows interest:

each month (Australia, USA, UK, Canada Etc)INTEREST MONTHLY EXCEL  Download  approx 7MB it can take a few minutes.  

 every 3 months  (India,Sri Lanka etc)    INTEREST QUARTERLY EXCEL  Download  approx 3.5MB it can take a few minutes.

every 6 months  (ANZ has given)        INTEREST HALF YEARLY EXCEL Download approx 3.5MB it can take a few minutes.  

once a year                        INTEREST ANNUALLY EXCEL  Download  approx 3.5MB it can take a few minutes. 

ALL  IN A SINGLE FILE   Download  approx 14MB it can take longer to download. Please read below

Please Note: When Microsoft Excel file opens, put your options in Blue cells and Red cell for increase in interest rate, other cells are protected cells. If changed results are not displayed, please press 'F9' on your key board (this will ensure that MS Excel does the calculations 'automatically'). Alternatively, in Excel choose 'Tools', 'Options', choose the tab 'Calculations', choose 'Automatic'.

This opens up a Microsoft Excel 2000 file in a new window. At cell 'B4 or B5 or B6' please enter one letter 'y' as appropriate. Cell 'B7', 'B8', 'B9' and 'B10' enter appropriate numbers from your loan contract. Please enter the interest rate as "7.5" to enter a 7.5% p.a. and not as "7.5%" or as "0.07".

You can see the results below as follows;

Now at 'B20', you will see the equivalent simple interest rate per annum charged to your loan. At 'C20' The total Simple interest payable over the term of loan. At 'D20' the number of years in which you would have repaid the entire loan and interest, if Simple interest were charged. 'F20' shows the interest on interest (interest on money NOT lent) and 'G20' Shows the total repayment of principal and interest (compound interest), if the interest RATE REMAIN UNCHANGED.

If you would like to see what a 0.25% (or any other) increase in interest rate would do to you, please enter at 'B10' the increase you find in your country's interest situation OR at 'B11' please enter the current interest rate in your country. At 'I20" you find the equivalent Simple interest rate, at "J20" you find the total money you would have paid for the entire term as per loan contract.

Amazing this here is that 'K20' will show you how much YOU STILL owe to the lender, after making your regular repayment for the entire period in the loan contract!!!

Since the Court has decided (this link downloads the judgement from legal database directly) that the Interest Rate quoted, IS COMPOUNDED, we have worked out the appropriate SIMPLE INTEREST and the rate at which you will NEVER be able to pay even a $1 of your borrowing, in spite of repaying the entire period of loan, without fail.

We all know to calculate simple interest (only on money actually borrowed) using a formula I=PRT/100 (where 'I' is Interest amount, 'P' is the sum borrowed, 'R' interest rate per annum as a percent (on 100) agreed at the time of borrowing, 'T' is the time the money was used by the borrower/ time taken to repay.

Einstein invented the formula for Compound Interest (interest on interest and on actual borrowing) or interest on money lent and on money not lent. The formula he has invented is A= P(1+R/100/F)T

(Where 'F' is the frequency at which Interest will be added to the Principal, 'A' is the accumulated sum of interest and principal). This formula is hopeless in practical application, for it is useful to calculate the interest and total amount due, ONLY when the any part of the sum borrowed is not repaid during the term/duration of loan.

The formula is redundant for practical applications. Firstly, as a planned conspiracy or coincidence, compound interest is not adequately dealt in class rooms, at least in the institutions i was either a student or teacher. Secondly, due to the notion that only when the formula above is used in calculations, it is taken to have the interest compounded. But the concept of compound interest is forgotten by common people but used very efficiently and in a very dubious manner by Lenders/Lending institutions for over 50 years.

Since there is no formula found as yet and no calculator can work out the Simple interest rate per annum for any given Compound interest (taking into account repayments of partial principal during the term of loan), i have attached here the ready reckoner 'unchallengeable' as to the 'concept' and accuracy.

This shows the interest rate at which the ENTIRE loan sum borrowed will still be fully outstanding after ritually paying the repayments throughout the period of loan, in any country on globe. This also shows the SIMPLE Interest rate per annum for a given interest rate per annum quoted by ANY Lender anywhere, for a different frequency of repayment, different period of loan, different compounding period (this differs between countries). The First Column on left shows the interest rate quoted/shown in loan contract/market interest rate per annum. The columns across on your right shows the equivalent Simple interest rate per annum,for various parameters of (1) Compounding frequency of Monthly, Quarterly, Half Yearly and Annually and within these (2) based on your repayment as Weekly, Fortnightly or Monthly.