#CompoundingInterest #InterestRates #DebtRepayment #LegalRecourse
If you find yourself in a situation where an employer has not paid you the agreed-upon amount and you are looking to understand how compounding interest works on the debt owed to you, you’ve come to the right place. In this comprehensive guide, we’ll break down the concept of compounding interest and how it applies to your specific situation.
Understanding Compounding Interest
Compounding interest is a powerful financial concept that can work for or against you, depending on the circumstances. Essentially, it refers to the interest that is calculated on the initial principal as well as the accumulated interest from previous periods. This means that the debt you are owed can grow exponentially over time if the interest is compounded at a certain rate.
In your case, you mentioned that you agreed to a 20% annual percentage rate (APR) on the debt owed to you by your employer. This percentage will determine how much the debt grows with each compounding period, whether it’s monthly, annually, or some other interval.
Calculating Compounding Interest
To calculate the compounding interest on the debt owed to you, you can use the following formula:
A = P(1 + r/n)^(nt)
Where:
A = the amount of money accumulated after n years, including interest.
P = the principal amount (initial amount of debt).
r = the annual interest rate (in decimal form).
n = the number of times that interest is compounded per year.
t = the time the money is invested for in years.
In your case, if the debt owed to you is $70,000 and the interest is compounded annually, you can use this formula to determine the total amount owed at a certain point in time.
Legal Recourse and Financial Recovery
Beyond understanding how compounding interest works, it’s essential to consider your legal options for pursuing the unpaid wages and how to recover the debt owed to you. Based on your detailed records of payment and non-payment from your employer, you have a solid foundation for pursuing legal action to reclaim what is rightfully yours.
Given the circumstances you’ve described, including being the caretaker of the elderly couple and the sudden eviction without proper compensation, there may be legal avenues available to you. You mentioned that you changed your address to the house and were a legal resident, which could strengthen your case in seeking financial recovery.
Seeking legal counsel and exploring the possibility of a lawsuit or mediation to recover the outstanding wages may be a viable option. It’s important to gather all relevant documentation, such as your employment agreement, records of payment, and any related communication with your employer, to support your case.
Moving Forward
In conclusion, the situation you’ve found yourself in is undoubtedly challenging and frustrating. With a clear understanding of how compounding interest works and your potential legal recourse, you can take informed steps towards recovering the debt owed to you.
Consider seeking professional legal advice to assess your options and determine the best course of action. Your diligence in keeping detailed records will be valuable in fighting for what you rightfully deserve.
Remember, you have rights as an employee, and it’s crucial to advocate for yourself in seeking resolution. This may involve pursuing legal action, negotiating with your former employer, or engaging in alternative dispute resolution methods.
As you navigate this difficult time, know that there are resources and support available to help you seek justice and financial recovery. You deserve to be compensated for your hard work and dedication, and taking proactive steps can help you move forward with confidence. Stay informed, stay proactive, and don’t hesitate to reach out for assistance in pursuing your rightful compensation.
The interest on the past due payments works the way your agreement says that it works. There are different ways to calculate accruing interest on a debt, none of us can tell you which one you agreed to. Hopefully you have this agreement in writing and can review it to find out.
For the rest of your issues, you need a lawyer.
Did you have a contract/documentation of your agreement?
Lawyer up, put a lien on their property and watch how fast you get paid.
What country are you in?
Bring your napkin deal to a lawyer.
Lawyer up, sooner rather than later to avoid issues and obstacles to payment
I get questions about APR from people who misunderstand it very often. So forgive me if you do actually understand it and this comes across as patronising.
APR considers the payment schedule. If you borrow $100 and pay back $120 after a year that’s an APR and an interest rate of 20%. However if you pay it back in equal instalments over 1 year. Very roughly you owe on average $50 at any time. And so APR is approx 40% whilst interest rate is still 20%.
The way you would calculate it is by calculating interest daily such that $70,000*X*365 = $14,000. You calculate interest daily based on the amount owed. So if no payments are made, interest compounds.
I suspect you have bigger problems than the minutae of APR though.
If you dont have it in a contract stating the terms of interest then Im guessing you’ll at best get your initial weekly pay.
Im forgetting what the specific term is, but you need the period the interest accrues. Is it daily like a bank account, monthly like a CC, car, or house loan? They could claim its annually, so just like if you pay your CC off 1 day before the end of the month, they could do the same and pay no interest.
Definately need the terms.
Yeah, you’re going to need a lawyer and luck to get that money.
I would want my money asap. They have liquidity problems and may not be able to pay you soon. Go to the department of labor. File a wage claim. Even if they claimed it a 1099 contractor chances are you were actually within employee classifications.
You get no money, and don’t collect $200 for passing go.
Get a lawyer. Pay a lump sum fee upfront or get a “free” lawyer to spend 30% of your settlement later
Interest can be calculated in a number of ways. If you calculate and compound the interest monthly, divide the annual interest rate by the number of months in a year. Calculate the interest that month and add it to the total. The new number is what you calculate the interest on the next month.
Simplistic way interest works.
Say they owe you $1000.00 @ 20%
20% divided by 12 months = 1.667%/mo = $16.67 interest the first month
Now they owe you $1016.67 x 1.667% = $16.95 interest the second month
Now they owe you $1033.62 x 1.667% = $17.23 interest the third month, and so on.
That interest rate is very high, approaching credit card interest, honestly, no one in their right mind would agree to that in my opinion. What was the reason they didn’t pay? My guess is they have no intention of ever paying. That contract, like all contracts really, is only as solvent as you wish to make it in a court.
The very first week they didn’t pay you why did you let it slide? I would have given them one week’s grace and then I’d be out of there.
You need to get that money before whoever you work for declare bankruptcy. Once they do, it’s way harder to get your money because other parties probably have first dip.
You established a residence there for long enough I think you have rights and they can’t forcefully evict you. Depending on where you are you may have a right to live there and are required to receive notice. Landlords who try this can be fined heavily. Talk to a lawyer about this along with your money owed. You’re probably not going to see it at 20% interest if they’re trying to throw you out they’re getting ready to not pay you. You need a lawyer yesterday.
Doesn’t matter, you aren’t getting any of it
How often was the interest compounded? That means when do you get to charge interest.
The formula is pretty simple but you have to factor in when you’re supposed to be paid and also when you’re allowed to charge interest (when you compound).
Credit cards for example charge interest on anything outstanding at the end of the month.
Also you don’t get to claim interest on future payments you didn’t earn yet, typically, so the only complication is tracking what was owed when. A person that uses spreadsheets can figure it out for you.
In any case it sounds like you have enough documentation that you should lawyer up, provide it, and you’ll get what’s owed, maybe more, minus lawyer costs.
A lawyer likely would take the case without up-front payment if you have a case. They’ll want to review that first, so get all your documentation together and look for a lawyer that deals with employment disputes.
Contracts a contract. Crayon or otherwise, both parties signed it, there was consideration. They broke it. Lawyer up, there’s your answer.
So the way the APR would work is you take the percentage divide it by 12 and apply that amount of interest each month.
You say they owe you $70k at 20% APR. So that is 1.667% per month. So the first month the amount they owe you is $71,166.90. The next month the amount they owe you is $72,353.25. And so on. If you have excel or google sheets you can do a amortization table and adjust as he pays you.
The right thing to do is get a lawyer to sue.
I feel like they arent going to pay you anything. Get a lawyer.
You may have more leverage than you think. Your lawyer will probably pick up on this.
If they are screwing you this way, they almost certainly haven’t been paying their share of the fica and other taxes that they should have been paying on your behalf.
And if they are like this about the taxes regarding their household employee, they may have other issues with taxes regarding their properties. They may want to avoid anything that could trigger the notice of the IRS.
If you filed that income that was actually paid to you as self-employment income, you paid roughly 15% in fica taxes. In reality, you were their household employee, and they should have paid half of that through tax withholding.
If they pay you what they owe you, they will also owe the fica taxes on the wages portion. This does benefit you long term as it affects your future social security eligibility and payments, including eligibility for social security disability way before you retire.
Google nannytax. It really concerns all types of household employees, not just nannies.
Please get a lawyer and seek the money up front ASAP, even if this means giving a cut to the lawyer.
By creating this interest payments deal, I’m almost certain the person has no intent of actually paying you but just wants to kick the can down the road and hope you haven’t got the will to fight for it. That or they’re planning on filing bankruptcy at some point which will leave you shit out of luck.
Warn them you have an appt with a lawyer set up and try to settle. If they won’t, hire a lawyer that will take cut.
– if you have a signed contract, why have you waited so long to pursue legally?
Hi, there are three issues here. 1: You were illegally evicted, call a California Tenant Rights company. 2: You were a victim of wage theft(the most common type of theft). You need to report this to the US Department of Labor 3: They violated California specific laws regarding domestic workers to prevent these things. You need to look up California Domestic Workers Bill of Rights and report it.
As everyone has mentioned, and to quote Dollar Bill from Billions, LAWYER LAWYER LAWYER. Good luck. And obviously stop working for them since they are paying you less than half what was promised.
Can you prove the agreed upon pay structure? If you can’t prove it on paper or something rigid, you are pretty much SOL.
I refuse to believe this is real. There is just no way.