For instructions on calculating finance charges, refer to How to calculate Finance Charges (BB264800).

With the Transaction Past Due Balance method, the charge is determined by calculating the age of each transaction and then calculating a finance charge (the older the charge, the higher the finance charge). After calculating for each individual transaction, the charges are summed to arrive at total finance charge.

**The Formula**

The formula used for each overdue charge is:

(**Overdue Balance per Charge**) x (annual finance charge % / 365) x (# days overdue)

The amount of the finance charge transaction created will be the sum of the individual finance charge amounts computed for each overdue charge.

**How the Overdue Balance per Charge in the formula above is determined**

- Sum the ungenerated advance deposits
^{(a)}(if selected), ungenerated financial aid^{(b)}(if selected), and unapplied payments and credits^{(c)}(if selected) to calculate the Total Credit Available.

- For each charge on an account that is subject to finance charge (associated with a fee subject to finance charge and past due according to the parameters set by the user) with a balance greater then $0.00 as of the 'Calculate as of' date:

- If the Total Credit Available is greater then $0.00, reduce the balance of the charge by the available credit amount. This gives you the Overdue Balance per Charge amount. Subtract the amount the charge balance was reduced from the Total Credit Available.

- Increase the Total Overdue Balance by the Overdue Balance per Charge amount.

- If the charge's Overdue Balance per Charge is greater then $0.00, calculate the Finance Charge per Transaction using the formula above.

If the Total Overdue Balance is greater than the Minimum Balance amount set in the finance charge parameters, a finance charge transaction is created with an amount equal to the sum of the Finance Charge per Transaction amounts calculated in step 2c. - If the Total Credit Available is greater then $0.00, reduce the balance of the charge by the available credit amount. This gives you the Overdue Balance per Charge amount. Subtract the amount the charge balance was reduced from the Total Credit Available.

Definitions of^{(a)},^{(b)}, and^{(c)}above:

- How the system calculates ungenerated advance deposits

- How the system calculates ungenerated financial aid

Sum all of the ungenerated portions. - How the system calculates unapplied payments and credits

**Note:**The unapplied payment/credit balance is time sensitive. When looking at the unapplied balance of each individual payment/credit, the system will disregard applications made to charges with transaction dates that fall after the 'Calculate as of' date.

- Sum the ungenerated advance deposits