Simple interest on current amount or outstanding amount?

marsbar989

Seems this is the best forum for this question as its a "loan" of sort.

I have a court order that states word for word

"The respondant do pay to the applicant a lump sum of £10,000 not later than the first to occur of the following events:"

Three events are then given

"And it is directed that simple interest shall be applied by the respondant at the rate of 5% per annum from the date of this order until payment of the said lump sum"

If the Order is date 1/1/10. Lump sum if £10,000.
on 1/1/11 Interest is £500.
on 1/1/12 Interest is another £500.
If I pay £5,000 + (£1,500 Interest payment) on 1/1/13 what will the interest be on 1/1/14? Still £500 per year (5% of 10K) or £250 (5% of £5k)??

Many thanks.

pvt

I would suggest it's £500 because you haven't paid the £10k lump sum, as the order requires.

The court order does not say anything about part payment. If one of the 3 events triggers the payment on 1/1/13 then surely the full £10k is due? If it is not then keep your £6,500 till 1/1/14 and then pay the full £12k.

marsbar989

The order makes no mention of part payment whatsoever.

One of the events is "an earlier date if there is agreement between applicant and respondant. "

pvt

Well it sounds as if you need to contact the applicant on 1/1/13 and ask if they agree to receiving £6.5k then, and £5.25k in a further year's time.