Construction Loan Interest Formula

Hello!

I'm in the process of building a new home. I have built an Excel sheet that adds up each draw on my loan. I would like to put in a formula that calculates a daily interest based on amounts as they are drawn from the bank. I'm not paying any principal on the loan during the 9 month construction phase. The monthly rate is 6.9% Can someone help me with a formula that calculates interest as draws are taken on the loan?

Thanks,
EGavin

Specifics will depend on how your spreadsheet is set up, but, in general you
want to calculate the average daily loan balance, then multiply by 6.9%/12 to
get the interest charge for that month.

You could have a spreadsheet which calculates the loan balance daily, in which
case you could multiply each daily balance by 6.9%/365 to get the interest
charged that day, then add them up for the month.

Or, if your spreadsheet changes only when you draw down funds, calculate
3.9%/365*NumberDays since last drawdown.

If you are paying the interest every month, fine. If not, add the interest at
the end of the month to the loan balance.

--
Regards,
Fred


"EGavin" <[email protected]> wrote in message
news:[email protected]...
>
> Hello!
>
> I'm in the process of building a new home. I have built an Excel sheet
> that adds up each draw on my loan. I would like to put in a formula
> that calculates a daily interest based on amounts as they are drawn
> from the bank. I'm not paying any principal on the loan during the 9
> month construction phase. The monthly rate is 6.9% Can someone help
> me with a formula that calculates interest as draws are taken on the
> loan?
>
> Thanks,
> EGavin
>
>
> --
> EGavin
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