Schedule 2
[Reg. 13]
Annual percentage rate — Applicable methods
1. Method No. 1
This clause applies to a credit sale contract or a loan contract, where —
the whole of the credit charge is a pre‑determined credit charge;
the whole of the amount financed is, or is to be, provided on the same day; and
the amount financed and the pre‑determined credit charge are payable by equal instalments at equal intervals, the first interval commencing on the date on which the amount financed was provided.
Where this clause applies to a contract, the annual percentage rate may be determined in accordance with the formula —
where —
N is the total number of instalments;
C is the number of instalments that, under the contract, will be paid in one year or, where the contract is to be completed in less than one year, the number of instalments that would be paid in one year if instalments continued to be paid at the same intervals; and
F is an amount determined in accordance with the formula —
where —
T is the total amount of the pre‑determined credit charge; and
A is the amount financed.
2. Method No. 2
The annual percentage rate may be expressed as the percentage rate per annum which when applied to the unpaid monthly balance of the amount financed calculated according to the actuarial method will yield a sum equal to the amount which under the contract would be the credit charge if all payments under the contract were paid when they were required to be paid under the contract.
3. Interpretation
For the purposes of clause 1 of this Schedule —
instalments shall be deemed to be equal if all the instalments except one are of the same amount and the difference between the amount of that one instalment and the amount of each of the other instalments is not more than $5 or 5% of the amount of each of the other instalments, whichever is the greater;
monthly intervals shall be deemed to be equal intervals;
intervals shall be deemed to be equal if all the intervals except one are of the same length and the difference between the length of that one interval and the length of each of the other intervals is not more than 5% of the length of each of the other intervals; and
intervals shall be deemed to be equal if all intervals except the first are monthly intervals, the amount financed is provided on the 29th, 30th or 31st day of a month and the first instalment is payable on the first day of the month following the next month.
[Schedule 2 amended: Gazette 10 Jan 1986 p. 150.]
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