2012 Arkansas Code
Title 4 - Business and Commercial Law
Subtitle 5 - Contracts, Notes, And Other Commercial Instruments
Chapter 57 - Interest And Usury
§ 4-57-101 - Calculation of interest.

(a) Whenever in any statute, deed, written or verbal contract, or in any public or private instrument whatever, any certain interest is or may be mentioned, and no period of time is stated for the rate of interest to be calculated, interest shall be calculated at the rate mentioned by the year, in the same manner as if the words "per annum" or "by the year" had been added to the rate.

(b) (1) For the purpose of calculating interest, a month shall be considered the twelfth part of a year, and as consisting of thirty (30) days.

(2) Interest for any number of days less than a month shall be estimated by the proportion which the number of days shall bear to thirty (30).

(c) (1) In calculating interest where partial payments may have been made, the interest shall be calculated to the time when the first payment shall have been made, and the payment shall be applied to the payment of the interest. If the payment exceeds the interest, the balance shall be applied to diminish the principal, and the same course shall be observed in all subsequent payments.

(2) However, in no case when a payment falls short of paying the interest due at the time of making the payment shall the balance of the interest be added to the principal.