amortization - calculating late fees and penalty interest

[Lizzie]

Have modified an amortization (for a loan i have given to somebody) to allow
me to modify and put in actual payments received. I need to include the
actual dates of payment as most are not received when they are due I need to
calculate late payment fees and penalty interest on overdue amounts. If I
just make a seperate worksheet and enter the values for late interest and
fees on both sheets manually, then I have to calculate the late interest
myself which I cannot do. To add more confusion, I really need to calculate
interest on a daily basis so I can charge late interest based on the number
of days overdue and compounding each day. I am no expert when it comes to
devising formula solutions, but I am pretty good at copying and pasting (yes
that was an attempt at humour)

 

[cvolkert]

How do the late payment fees and penalty interest work? Is there a set
fee everytime they are late or does it vary with the amount past due
they go? Does the interest rate increase during the period that they
are past due, permantently or something different? Let me know and I
can probably through this together.

 

[Lizzie]

Basicly, there is a $25 late payment charge if the account isn't up to date
when a payment is due, and the interest will increase by 2% any time the loan
is in arrears. That extra interest applies to the entire principal, not just
on the amount outstanding. The interest rate is also variable so could rise
or fall throughout the loan period. My problem is that I need to calculate
penalty interest, and base it on the number of days in arrears and not for
the entire month if paid a few days late rather than an entire month late.

Cheers and thank you