Help me figure out balance due so I can pay this person back ASAP.

Friend loaned approximately 10,000 in 2012. Friendship ended. I signed promissory note acknowledging amount due with a 4% interest rate.
Ex-friend took me to civil court in 2014. Judgement stated amount owed to be approximately 11,000 including a 4% interest of approx. 830.00 (2012 to 2014). I started making consistent monthly payments from 2016 to presents. Total payments equal approx. $7,000.
I want to send her a FINAL payment on loan. She wants 10,000. I offered 5,000. Keep in mind...I'm willing to pay the 4% interest even on the 2 years I missed payments (2014 to 2016). How much should I give her to settle my debt and get her out of my life. please help!? Thank you!

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    What was the judgement about the repayment schedule: one deadline for a lump sum or payment in instalments, and at what interest rate (if any)? E.g. if the judgement was to repay $x each month with no interest, then not paying for 2 years (2014-2016) might complicate things. Also, what reason or calculation did your creditor give for demanding an additional $10k after having received $7k of an $11k judgement (approx)?
    – Lawrence
    Jan 12, 2019 at 2:49
  • Generally, legal settlements use simple interest. So interest doesn't compound. If I were you I'd show up with a check already made out for $5k and some settlement agreement and she can take it or take you back to court.
    – quid
    Jan 12, 2019 at 2:50

1 Answer 1


You made a guess that you owe $5,000, and your ex-friend made a guess that you owe $10,000. It's quite obvious that you are both guessing. I assume you both want that you pay the correct amount.

I suggest you find a trusted person who is good at using a spreadsheet. Then you start doing the numbers. You have a judgment that says you owe (some exact number close to $12,000) on (some exact day in 2014). That's the start for the calculation. Then you enter all the payments you made. Then the interest calculation comes in:

For every payment, you calculate 4.5% divided by 365, multiplied by the days since the previous number, multiplied by the previous amount. That's the interest paid. You take the previous amount, add the interest, subtract the payment you made, and that's how much you owed after each payment.

For example, it seems you waited about two years for your first payment. Let's say you owed $11,880 and made the very first payment of $200 exactly 795 days later. The interest is $11,880 times 0.045 times 795 divided by 365. That's $1,165. So after your payment you owe $11,880 plus $1,164 minus $200 = $12,844.

Your next payment should have been 30 days later, so the interest would be $12,844 * 0.045 * 30 / 365 = $47, and the new amount owed is $12,844 + $47 - $200. Obviously you take your own correct numbers. Others might calculate the interest slightly different, but this will be close enough.

My rough estimate is that you would owe about $7,000.

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    My back-of-the-envelope calculation shows somewhere between $5800 (simple interest) and $6160 (compound interest) still owing, though it's complicated by the dates involved. Gnasher is correct, someone needs a spreadsheet. $10,000 is too high, though. Jan 12, 2019 at 12:40
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    The calculation described here is compound interest. If the judgement mentions interest, it may also say whether it is simple or compound interest.
    – prl
    Jan 12, 2019 at 17:35
  • I have never, ever seen anyone paying simple interest. Everything is compound interest. Anyway, that makes maybe $200 difference, so it is totally irrelevant when they discuss if it should be $5000 or $10000.
    – gnasher729
    Jan 12, 2019 at 18:14
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    The calculation disclosed in this answer will give an answer that's close, but not exactly right. In particular, I've never heard of a loan where the compounding schedule is "each time a payment is made". You either have compounding continuously, no compounding at all, or compounding on a fixed interval (typically monthly). So two years without a payment would use a factor of pow(1+APY,2) not 1+2*APR.
    – Ben Voigt
    Jan 13, 2019 at 2:30
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    @BenVoigt When the alternative is "I guess its $5000" or "I guess its $10000" anything is an improvement.
    – gnasher729
    Jan 14, 2019 at 21:58

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