Margill The Interest Calculation Software for Law Professionals Prepared by Mark Gelinas, attorney, MBA President, Jurismedia December 2004

2 Margill - Interest Calculation Software for Law Professionals Used by close to 500 law offices of all sizes, corporate legal departments, insurance companies, accountants, collection agencies, real estate companies, government agencies, unions, forensic accountants and courts. Over 2600 installations in the US, Canada, Europe, the Middle East, South America and Africa Law fields: –civil and commercial litigation, labor, commercial, insurance, family, banking, real estate, mergers and acquisitions, investment, tax and of course, collection.

3 Common Uses in Law Interest on court awards Partial payments paid before or after judgment Late tax payments Interest on unpaid or late salaries, alimony, annuities or rent –possible to index these amounts Today value of a “old” court award (Indexation) Court award quantum hypotheses (civil liability)(Present value) Loans / Mortgages / Late payments / Amortization –Banking law, real estate, collection –Regular or irregular payments, fixed or variable interest rates, simple or compound interest –Interest only, Fixed principal, Normal refund (interest first)

4 Common Uses in Law Others : –Return on investment (Present value) (Corporate financing) –Appreciation / Depreciation –Effective and Nominal interest rate converter –Annual rate of return

5 Interest on Court Awards Interest (simple or compound) between the summons date and the judgment date: –Variable interest rates (legal rates for Canada, Europe, etc.) –Create as many interest tables as required (legal rates in any State) — Possible de capitalize simple interest at the loan anniversary date — Option to set interest rate at the rate in effect at the ”Starting date” of a variable rate table (Spring 04) –Variables rates may include an increase or decrease at a particuler date  Example: rate increase as of date x.

6 Partial Payments Paid Before or After Judgment When the defense makes payments before judgment, the “Recurring Payments (Amortization) calculation may be used The table may be modified to reflect a particular situation –If the judge awards successive amounts, a negative payment may be included to increase the capital Total flexibility

7 Late Tax Payments Tax variable interest rates (Internal Revenue Service, Revenue Agency) –Generally daily compound interest Percentage may be added as a penalty Tables included for certain juridictions and possible to rapidly create new tables starting from Excel, Word, etc. –IRS tables...

8 Allows the indexation of salaries or other annuities according to various indexation tables consumer price index legal indexation rates indexation rate according to contract or collective labor agreement Interest on Unpaid or Late Salaries, Alimony, Annuities or Rent The “Accrual by Installment” calculation allows to accumulate amounts starting at $0,00

9 Indexation according to chosen table The amounts are accumulated Interest accumulated on these amounts Interest on Unpaid or Late Salaries, Alimony, Annuities or Rent

10 Possible to delete and add installments, include a paid installment (negative amount), insert a lump sum, etc. Interest on Unpaid or Late Salaries, Alimony, Annuities or Rent Possible to rapidly edit an installment table

11 Today Value of an “Old” Court Award (Indexation) For example, what is the value in 2004 of a $35,000 award dating from Use of various indexation tables (CPI for example) –US, Canadian, European, Australian, etc. –New tables can easily be created

12 Court Award Quantum Hypotheses (Civil Liability)(Present Value) Determines the global value today of amounts to be recevied in the future Ideal in civil liability cases to determine the annuity the defendant should pay to the plaintiff –amounts may be uniform or not, indexed according to the cost of living or change according to the life stages of the plaintiff (student  worker  retirement)

13 Court Award Quantum Hypotheses (Civil Liability)(Present Value) Possible to change the future amounts. Examples: –No amount paid for the first year –Lump sum at the end of each year –Impact of a higher payment in 10 years –etc.

14 Loans / Mortgages / Late Payments / Amortization Mortgages - regular or irregular Personal loans, lines or credit Fixed or variable interest rates –For example US Fed reserve (Fed funds) + 2.5%; post-judgment interest rates + x%, etc. Enter 3 of 4 variables and the fourth will be calculated automatically

15 Loans / Mortgages / Late Payments / Amortization At any time, how has the “loan” evolved? –Right click of the mouse

16 Loans / Mortgages / Late Payments / Amortization Payment table may be edited as desired –Add capital (negative amount) –New payments –Missed payments Modifie paiement - lignes sélectionnées Modify Payment - Selected Lines –Many lines changed at once –Selected lines recalculated to give a balance = 0 –Etc.

17 Late payments / Collection Concrete example: –5 bills sent to client at various dates - interest always starts 30 days later $ May 10, 2002 (interest starts June 9, 2002) $ June 2, 2002 (July 2) $ June 2, 2002 (2 bills) (July 2) $ October 1, 2002 (October 31) $ January 15, 2003 (February 14) –Client pays irregularly : $ August 1, 2002 $ September 15, 2002 $ October 20, turns out to be NSF with $25 fee $ January 10, 2003 $ 10,000 - June 5, 2003 –No payment since then. How much is stilled owed on November 12, 2004? –Monthly interest of 2% compounded monthly (could also be simple interest)

18 Results screen Time to produce the schedule (data entry) : 7 minutes Can be saved and opened subsequently for new events (partial payments, etc.)

19 Return on Investment (Present Value) (Corporate Financing ) Value to attribute to a company today considering future projeted cash flows (annual, monthly, etc.)

20 Appreciation / Depreciation Future value of an asset taking into account a regular or irregular annual appreciation rate.

21 Effective and Nominal Interest Rate Converter + Equivalent Rates

22 Annual Rate of Return

23 Margill Interest and Indexation Tables Interest tables USA: Fed Reserve Base Rate, IRS late payment rates Canada: Bank of Canada overnight rate; Ontario, BC, and Quebec legal interest rates Great-Britain: Repo rate Australia: Cash rate and legal rates of the Aus. Taxation Office (ATO) Hong Kong: Base Rate Europe: European Central Bank rates France: legal interest rates, late payment rates Belgium : legal interest rates Luxembourg : legal interest rates Indexation USA: Consumer price index (CPI) Canada: CPI Great-Britain: Retail Prices Index (RPI) Australia: CPI France: Harmonized consumer price index (HCPI) Switzerland: CPI Belgium: HCPI Luxembourg: HCPI New tables may be created easily from Excel or Word (or directly in Margill)

24 Respecting International Standards International standards and recognized interest calculation standards (America, Europe, Africa, Asia, Australia) US banking rules (Regulation Z, Truth in Lending) Canadian banking rules European Community rules (Directive 98/7/CE) Day count conventions : ”Real/Real" (maximum precision) 30/360, Real/360, Real/365

25 Conclusion Margill allows the practitioner to solve he great majority of problems related to the value of money in time. Margill is already the choix of hundreds of law offices, corporate legal departments, collection agencies, insurance companies, governments, and judges. –In the province of Quebec (Canada) where Margill was born in 1992, the software is used in 65% of ALL law offices. Eliminating those offices that need not this type of software (criminal and immigration), this rate increases close 70-75%. Jurismedia inc. Tel.: Fax: (514) USA 220 E. Delaware Avenue Newark, Delaware Canada 4841 Elmview, Suite 100 Montreal, Quebec, H9A 3E9