Now() statement within a IF(AND statement problem

Does the Now() and Today() function not work well in Excel 2010 when using the IF(AND statements?

Here is my formula:

=IF(AND(C8 <> "PAID OFF", I2+32-TODAY()<1), "Late", 0)

My formula works fine without the AND statement, but every time I add the AND statement the condition becomes False and I'm not sure why. When using the Function Arguments under the Function Library, it says my NOW() or TODAY() is volatile, which means it changes/updates constantly.

I have to use the AND statement otherwise my formula will not perform correctly. It's basically to know if I'm late on a monthly payment, and if I don't use the AND for the "PAID OFF", it will think the coming months on a already paid off bill will be considered late.

Thanks

Originally Posted by martindwilson

volatile means it updates when sheet recalculates not constantly, i cant get the AND to fail with a similar example, post a workbook with what fails

I uploaded, let me know what you think I need to do to correct this. On a side note, I have just learned the IF/AND functions, so be gentle if my formulas looks bad.

I keep getting the 'Circular Reference Warning' when I open my workbook regarding this formula, and it draws an arrow connecting both cells. In any case, what should be False in H7 under Bill 1, should report Late, but reports 0, insinuating it's True.
And then of course I8 keeps adding the arrows, even after I have them removed.

There are more Bills (I wish I only had them two). If I can get this to perform effectively and precisely, then I'm sure I can duplicate it to the others.

thanks