How is the Average APR calculated?

Why did the Breakpoint Calculator computation change on 1/10/2005?

What are the values that should be entered into each field?

How many calculations can I perform at one time?

What formula does the Calculator use?

How is the time determined in the simple interest formula?

I notice that there are no rates for the current months, what do you use?

Why can't I input a refund date beyond the end of next month?

What happens if the refund amount is greater than two decimal places?

Can you explain in detail how the calculation is performed?

Who may I contact if I have questions regarding the Mutual Fund Breakpoint Refund Interest Calculator?

- The APR is the greater of 2.5% or an average APR based on monthly average dealer rates published by the Federal Reserve on negotiable 6-month CDs nationally traded in the secondary market.

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These monthly average APRs are available from the Federal Reserve at: http://www.federalreserve.gov/releases/h15/data/Monthly/H15_CD_M6.txt

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For more information about interest rates used by the Breakpoint Calculator, please refer to "How is the Annual Percentage Rate (APR) calculated?" above.

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- Overcharge Amount—The difference between the fee that the investor did pay on the transaction date and the amount that they should have paid. This field is expecting a dollar value entry.
- Transaction Date—The date on which the mutual fund purchase took place.
- Refund Date—The date that the firm will refund the investor.
- Identifier—An optional field that allows the user to tie a particular calculation with a certain customer. This field will accept numbers, letters and symbols as entries.

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Refund = Dollars owed + (Dollars owed * APR * Time)

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Here is a sample calculation based on the rules listed above:

Parameters: Transaction date = 11/23/1998, Dollars owed = $500.00, Refund date = 8/11/2003.

Calculation Steps (for transactions before January 1, 2001)

*Average monthly interest rate*=**.03954**—this is the average monthly interest rate from November, 1998 through August, 2003 inclusive, divided by 100, and rounded to a decimal precision of 5 places (x.xxxxx).*Average daily interest rate*=**.000108328**—this is the average monthly interest rate (.03954), divided by 365, and truncated to a decimal precision of 9 places (x.xxxxxxxxx).*Refund Amount*=**$593.27**—this is the average daily interest rate (.000108328) multiplied by dollars owed (500), multiplied by the number of days between the transaction date and refund date (1722), added to the dollars owed (500), and truncated to a decimal precision of 2 places (xxx.xx).

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