What we do at my condo is take 10% (.10) and divide that by 12.. = .007977.

Each month you take whatever is late (we do >90) and tack on .007977.

Each month that small amount is compounded.

EX: 1,250 past due x 0.007977 = 9.98

The next month, if that is still not paid, and the next month's fees are added to the >90,

1250+300=1550.

Add in the interest from last month, 1550+9.98 = 1559.98

Calculate this month's interest on that total.

1559.98 x 0.007977 = 12.45

If you take 0.007977 and multiply it by 12 you will see that equals .10, makes more sense than any of the other answers.

Each month you take whatever is late (we do >90) and tack on .007977.

Each month that small amount is compounded.

EX: 1,250 past due x 0.007977 = 9.98

The next month, if that is still not paid, and the next month's fees are added to the >90,

1250+300=1550.

Add in the interest from last month, 1550+9.98 = 1559.98

Calculate this month's interest on that total.

1559.98 x 0.007977 = 12.45

If you take 0.007977 and multiply it by 12 you will see that equals .10, makes more sense than any of the other answers.