CCM8520 - Closing the Examination: Wording of Instalment Offers
The examples below show how to word and calculate the instalments in various circumstances. You should use the wording appropriate to your case.
Example 1
It is agreed that Tina’s offer including forward interest is £4,200. Tina can afford to pay £1,000 straightaway and she can pay the balance at £160 per month. The wording should be expressed as follows:
£1,000 |
to be paid within 30 days of the date of the letter notifying acceptance of this offer by you |
£3,200 |
to be paid by 20 monthly instalments of £160 each, on or before the last day of each month. The first instalment of £160 is to be paid on or before the last day of the next month after the instalment of £1,000 is due. |
until the whole of the £4,200 has been paid.
Forward interest will have been included in the £4,200 - see CCM8450.
The amounts due will rarely divide evenly so you should use your judgement to work out the instalments, remembering the aim is to get the money paid as soon as possible.
Example 2
It is agreed that Jean’s offer including forward interest is £2,600. Jean cannot afford to pay anything up front but can manage monthly payments of £70. The wording should be expressed as follows:
£80 |
to be paid within 30 days of the date of the letter notifying acceptance of this offer by you |
£2,520 |
to be paid by 36 monthly instalments of £70 each, on or before the last day of each month. The first instalment of £70 is to be paid on or before the last day of the next month after the instalment of £80 is due. |
until the whole of the £2,600 has been paid.
Forward interest will have been included in the £2,600 - see CCM8450.
Example 3
It is agreed that Pat’s offer including forward interest is £3,700. Pat has made a payment on account of £800 which you passed to the Accounting & Payments Office Network Unit to hold on account. Pat cannot afford to pay anything else up front but can manage to pay £90 per month. The wording should be expressed as follows:
£800 |
already paid on account |
£110 |
to be paid within 30 days of the date of the letter notifying acceptance of this offer by you |
£2,790 |
to be paid by 31 monthly instalments of £90 each, on or before the last day of each month. The first instalment of £90 is to be paid on or before the last day of the next month after the instalment of £110 is due. |
until the whole of the £3,700 has been paid.
Forward interest will have been included in the £3,700 - see CCM8450.
Example 4
It is agreed that Sue’s offer including forward interest is £1,940. Sue can afford to pay £400 straightaway, a second instalment of £100, and the balance at £80 per month. The wording should be expressed as follows:
£400 |
to be paid within 30 days of the date of the letter notifying acceptance of this offer by you |
£100 |
to be paid on or before the last day of the next month after the instalment of £400 is due. |
£1,440 |
to be paid by 18 monthly instalments of £80 each, on or before the last day of each month. The first instalment of £80 is to be paid on or before the last day of the next month after the instalment of £100 is due. |
until the whole of the £1,940 has been paid.
Forward interest will have been included in the £1,940 - see CCM8450
