Interest on loan
I loaned my local food co-op $5000 on 12/20/2014. Agreement read ‘interest at rate of 4% per year’. Period – no additional terms.
Today I received my balloon payment check – for $6400. I anticipated more. Letter w check said ‘annual interest (non-compounding) 4%. I believe adding ‘non-compounding’ changed the language of the agreement.
Am I wrong in thinking I should receive more than $6400?
Terry Says
If the contract said 4% a year and did not specify compounding, then they returned the correct amount. It’s a lesson to get the terms — all of the terms –of a loan in writing. You did a lovely thing making the loan, and I’m sure that is part of your (mental) reward. Nice that they were able to return your principal!
