Calculating Daily Interest Math

Initial purchase amount.

Calculating daily interest math. You figure simple interest on the principal which is the amount of money borrowed or on deposit using a basic formula. Principal x rate x time interest p x r x t. Multiply this rate by the principal investment to get the amount that your money will earn each day. The daily interest accumulate on a daily basis on the amount of the loan from the date the interest charges begin until you repay the loan.

If you will be entering more than one interest period be sure to enter all periods in the. I prt for the above calculation you have 4 500 00 to invest or borrow with a rate of 9 5 percent for a six year period of time. How to calculate simple interest. Compound daily interest calculator.

To calculate daily interest first convert the interest rate percentage into a decimal by dividing it by 100 then divide that number by 365. Use daily simple interest calculator to calculate the interest on a daily simple interest loan. Daily compound interest 95 450 94 so if we see effectively you are earning more if you choose to invest in bank 1 due to daily compounding. To verify that interest is compounded daily review your cardmember agreement.

This flexibility allows you to calculate and compare the expected interest earnings on various investment scenarios so that you know if an 8 return compounded daily is better than a 9 return compounded annually. Compound interest or interest on interest is calculated with the compound interest formula. Calculate your daily interest for a fixed amount of days. To calculate the interest for the period be sure you have entered the starting amount rate and date including the 4 digit year in the top section then complete the required fields ending 4 digit year and number of days in period in this section then click the calculate daily interest button.

Subtract the principal if you want just the compound interest. Daily compound interest 105 450 94 10 000. The simple daily interest is the amount of interest rate that you are required to pay each month. Multiply the principal amount by one plus the annual interest rate to the power of the number of compound periods to get a combined figure for principal and compound interest.

Your intermediate accounting textbook may substitute n for time the n stands for number of periods time. There will be a section below the interest and fees tables that says something like.