Document ID: chunk:federal_register_of_legislation:C2012A00130:clause:4_32b:p1
Version: federal_register_of_legislation:C2012A00130
Segment Type: clause
Provision Reference: sch 4 cl 32B (pt 1/3)
Character Range: 91108–93653

32B  Calculation of annual cost rate
 (1)  The annual cost rate of a credit contract must be calculated as a nominal rate per annum, together with the compounding frequency, using the formula:
where:
n is the number of repayments per annum to be made under the credit contract (annualised if the term of the contract is less than 12 months), except that:
 (a) if repayments are to be made weekly—n is 52.18; and
 (b) if repayments are to be made fortnightly—n is 26.09; and
 (c) if the contract does not provide for a constant interval between repayments—n is to be derived from the interval selected for the purposes of the definition of j in subsection (2).
r is the solution of the equation specified in subsection (2).
 (2) The equation for the purposes of the definition of r in subsection (1) is:
where:
Aj is the amount of credit to be provided under the credit contract at time j (the value of j for the provision of the first amount of credit is taken to be zero).
Cj is the credit cost amount (if any) for the credit contract that is payable by the debtor at time j in addition to the repayments Rj.
F is:
 (a) if the credit contract is a medium amount credit contract—$400 (or such other amount as is prescribed by the regulations); or
 (b) if the credit contract is not a medium amount credit contract and an amount is prescribed by the regulations in relation to the contract—that amount; or
 (c) otherwise—$0.
j is the time, measured as a multiple (not necessarily integral) of:
 (a) if the credit contract does not provide for a constant interval between contractual repayments—an interval of any kind selected by the credit provider as the unit of time; or
 (b) otherwise—the interval between contractual repayments that will have elapsed since the first amount of credit is provided under the credit contract.
Rj is the repayment to be made at time j.
t is the time, measured as a multiple of the interval between contractual repayments (or other interval so selected), that will elapse between:
 (a) the time when the first amount of credit is provided under the credit contract; and
 (b) the time when the last repayment is to be made under the contract.

Credit cost amount
 (3) The credit cost amount for the credit contract is the sum of the following amounts if they are ascertainable:
 (a) the amount of credit fees and charges payable in relation to the contract;
 (b) the amount of a fee or charge payable by the debtor (whether or not payable under the contract) to:
 (i) any person (whether or not associated with the