Real-Life Math
You are a bailiff who must seize a vehicle and return it to a dealership,
taking it away from a person delinquent on his monthly lease payments.
The
delinquent in this case is one Kenny Hong. He is late on his payments and
the dealership has called his new truck back.
You and your crew are
just installing the truck on the flatbed when your lookout whistles. The lights
in the house turn on and you hear screaming coming from the front door. By
the time Hong realizes that his truck has been repossessed, you and your crew
are off with the vehicle.
The next day, your boss tells you that the
dealership refuses to reimburse your company for retrieving the truck. The
boss tells you that they are going to auction off the truck in order to retrieve
some of the costs that were incurred during the operation.
According
to Jim Voice, president of a credit service, before you can sell
a debtor's possession, you will have to give them written notice.
This
notice must show the full amount owing on the debt, and the per diem rate
of interest.
The cost of the truck and amount Kenny paid is given to
you.
These are your facts:
Truck cost $25,000
Hong
has paid $5,000
Hong hasn't made a payment in 300 days
The interest
rate is 10 percent
To calculate the per diem, you take
the annual rate of interest and divide it by the number of days in the year,
then multiply this percentage by the amount outstanding.