headermask image

Business Tools Blog

Formula to Calculate Daily Compound Interest

When you calculate Compound Interest you add the accumulated interest back to the principal, so that interest is earned on interest from that moment on.  If interest compounds daily, depending on the rate the total interest can increase very rapidly.  Typically you’ll see daily compound interest in a penalty situation, example - late fees.

The Formula to Calulate Daily Compound Interest follows:

=StartingBalance * (1 + Daily Interest Rate)^NumberOfDays = Starting Balance + Compound Interest

It’s more typical to see monthly compound interest rates.  The Formula to Calulate Monthly Compound Interest follows:

=StartingBalance * (1 + Monthly Interest Rate)^NumberOfMonths = Starting Balance + Compound Interest

If you liked my post, feel free to subscribe to my rss feeds

Money Making Options

Post meta

This entry was written by Sandi Mays and posted on May 2, 2009 at 12:05 am and filed under Definitions, Excel, Formulas. Bookmark the permalink. Follow any comments here with the RSS feed for this post. Post a comment(Latest is displayed first) or leave a trackback: Trackback URL.

Share with others

Post Formula to Calculate Daily Compound Interest to digg. Post Formula to Calculate Daily Compound Interest to Reddit add to stumbleupon Google Bookmark myweb bookmark on del.cio.us newsvine Tailrank magnolia Furl co.mments shadows simpy blinklist

5 Comments so far (Add 1 more)

  1. i can\’t expect any better content than this.

    1. How to get unlimited traffic on a blog/site on January 6th, 2012 at 2:17 am

  2. Just divide by 365 and multiply by the number of days

    2. Sandi Mays on April 19th, 2011 at 7:11 am

  3. i want to calculate interest on amount for some months plus days.
    the interest is compounded annually.
    will u pls help me out??

    3. punit on April 19th, 2011 at 4:22 am

  4. We are also having to teach this in my school. It can be quiet dull but we have been using the following online calculator with some success http://www.inspiredtosave.com . The kids seem to enjoy so I guess that’s what counts.

    4. Alex on December 8th, 2010 at 2:17 pm

  5. Thanks for the post. I am helping a student with finance mathematics. I did a search on Google for “compound interest rate formula” and found your blog. Business mathematics is a part of the high school curriculum here in Alberta and I will use your site as a reference tool.

    5. Chad - Math Tutoring on August 16th, 2010 at 7:05 pm

Post a Comment

Your email is never published nor shared. Required fields are marked *

*
*