The Department of Revenue and Finance of the state of Iowa bases its interest calculation on a monthly interest rate which is calculated by dividing the annual interest rate by 12 and rounding to a single decimal place. Thus, an interest rate of 9% yields a monthly rate of .8% (.75% rounded up). This monthly rate is then multiplied by the number of months the payment is delinquent.

C&C Software is not sure whether the practice of rounding the monthly interest rate to single decimal place is statutory or merely the practice of the Department of Revenue and Finance. It can result in a significantly different result than a calculation done without such rounding. Because this may be a contestable matter, Instant Interest allows you to calculate an interest schedule with or without such rounding. When you ask for a Calculate or Print function for the state of Iowa, Instant Interest will ask you whether you want to round the monthly interest rate to a single decimal place or not, as follows:

If you select “Yes” interest will be calculated with a rate derived by rounding the statutory rate to the nearest monthly rate. If you select “No” interest will be calculated with the statutory rate without rounding.