12 C.F.R. Appendix F to Part 226—Annual Percentage Rate Computations for Certain Open-End Credit Plans
Title 12 - Banks and Banking
In determining the denominator of the fraction under §226.14(c)(3), no amount will be used more than once when adding the sum of the balances1 1 Where a portion of the finance charge is determined by application of one or more daily periodic rates, the phrase sum of the balances shall also mean the average of daily balances. 1. A specific transaction of $100 occurs on the first day of the billing cycle. The average daily balance is $100. A specific transaction charge of 3% is applicable to the specific transaction. The periodic rate is 1 The annual percentage rate is the quotient (which is 4 2. Previous balance—$100. A specific transaction of $100 occurs at the midpoint of the billing cycle. The average daily balance is $150. A specific transaction charge of 3% is applicable to the specific transaction. The periodic rate is 1 3. If, in example 2, the periodic rate applies only to the previous balance, the numerator is $4.50 and the denominator is $200 (the amount of the transaction, $100, plus the balance subject only to the periodic rate, the $100 previous balance). As explained in example 1, the annual percentage rate is 2 4. If, in example 2, the periodic rate applies only to an adjusted balance (previous balance less payments and credits) and the consumer made a payment of $50 at the midpoint of the billing cycle, the numerator is $3.75 and the denominator is $150 (the amount of the transaction, $100, plus the balance subject to the periodic rate, the $50 adjusted balance). As explained in example 1, the annual percentage rate is 2 5. Previous balance—$100. A specific transaction (check) of $100 occurs at the midpoint of the billing cycle. The average daily balance is $150. The specific transaction charge is $.25 per check. The periodic rate is 1 6. Previous balance—none. A specific transaction of $100 occurs at the midpoint of the billing cycle. The average daily balance is $50. The specific transaction charge is 3% of the transaction amount or $3.00. The periodic rate is 1
Title 12: Banks and Banking
PART 226—TRUTH IN LENDING (REGULATION Z)
Subpart F—Electronic Communication
Appendix F to Part 226—Annual Percentage Rate Computations for Certain Open-End Credit Plans