The following is an example of how to use Present Value – Future Value calculations to verify interest calculations by a lender that is gouging the public. An article in the business section of the Saturday, Toronto Star (Aug 27th 2005) regarding late interest charges for not paying ones VISA bill on time is proof positive that consumers need to be protected from lenders that abuse their powers. In this day and age of computers there is absolutely no excuse for any lender, especially a large Bank with resources such as the CIBC, to not be able to run software functioning in real time. The Aerogold Visa holder was charged $104.53 for being two days late on a balance owing of $2,942.76. The due date for the payment fell on a Saturday, thus his payment was not processed until Monday. The theoretical concept behind the late interest charge of $104.53 is that CIBC was not able to immediately reinvest the payment for two days (deemed reinvestment). That being said, the most important issue is that CIBC in this example is charging interest in excess of the 60% dictated by the Criminal Interest Act. In this example (assuming the article is correct without any typos)CIBC is charging an effective interest rate of 68.8% for the two days based upon a 30 day month. The interest added to the balance due is the future value and the period is 2/30 of a month. The effective interest rate is 68.8%. The unhappy Visa card holder should entertain charging CIBC under the Criminal Interest Act.