compound interest daily

Calculation limited · 08-23-2005, 04:05 PM

I need to calculate compounded daily interest on an amount owed by a debtor.
Can someone give me a excel formula. I am not a math please layman terms. I
know the principal of how it works but don't want to spend a day doing it by
calculator. Amount 4324.13 @23.99% from 10/22/03 to 8/23/05

**swatsp0p** · 08-23-2005, 04:43 PM

We are assuming 23.99% simple interest, calculated and compounded daily (ooh, that's nasty!

)

There may be simpler ways to do this, but this way should get you your answer:

Beginning in F1 enter the start date (i.e. 10/22/03) and auto fill that down until you reach 8/23/05 (F672). In G1 enter the beginning value of the loan ($4324.13). In G2, enter this formula:

=G1+(G1*(0.2399/365)) and copy down to the end of the range (double click on the drag handle)

For more data, you could see the total amount of interest added to date by using this in H2:

=G2-G1

and this in H3, copied down:

=G2-G1+H2

Your total will be in G672 (you can continue down with the formulas if the bugger hasn't paid up yet).

Good Luck!

Bruce

Duke Carey · 08-23-2005, 06:05 PM

Put the dates in cells A1 & A2, oldest date first
Put the Amount in A3 and the Rate in A4

in B1 use this formula

=(1+A4/365)^(A2-A1)-1

That will tell you what the total interest rate is.

In B2 use the formula

=B1*A3

That's the total interest owed

"Calculation limited" wrote:

> I need to calculate compounded daily interest on an amount owed by a debtor.
> Can someone give me a excel formula. I am not a math please layman terms. I
> know the principal of how it works but don't want to spend a day doing it by
> calculator. Amount 4324.13 @23.99% from 10/22/03 to 8/23/05

[email protected] · 08-23-2005, 07:05 PM

Calculation limited wrote:
> I need to calculate compounded daily interest on an amount owed by a debtor.
> Can someone give me a excel formula. I am not a math please layman terms. I
> know the principal of how it works but don't want to spend a day doing it by
> calculator. Amount 4324.13 @23.99% from 10/22/03 to 8/23/05

Did you advertise (or stipulate) that 23.99% is the "APR"?

If so, then I believe that using 23.99%/365 (0.065726%) for
the compounded daily interest rate is incorrect. That would
result in an APR of 27.10%. I believe the correct compounded
daily interest rate is 0.058930%.

(Note: That is a personal opinion, not a legal one. I do
not know what is common practice or regulation among lendors.)

Given an APR of 23.99%, this is how I would compute the
compounded daily interest rate:

RATE(365,,-1,1.2399) [A1]

The number of days (671) can be computed as:

DATE(2005,8,23)-DATE(2003,10,22) [A2]

Do you truly want to compute the "compounded daily interest"
-- the amount of interest each day(!)? Or do you really want
to compute something else -- perhaps the total interest
accumulated between 10/22/03 and 8/23/05, assuming no payments
and a compounded daily interest rate?

The latter ($2096.49) can be computed as follows:

FV(A1,A2,,-4324.13)-4324.13

I hope that helps. As noted, it is not really clear (to me)
what you are trying to compute.

Calculation limited · 08-23-2005, 08:05 PM

Thanks so much. I am saved.

"Duke Carey" wrote:

> Put the dates in cells A1 & A2, oldest date first
> Put the Amount in A3 and the Rate in A4
>
> in B1 use this formula
>
> =(1+A4/365)^(A2-A1)-1
>
> That will tell you what the total interest rate is.
>
> In B2 use the formula
>
> =B1*A3
>
> That's the total interest owed
>
>
>
> "Calculation limited" wrote:
>
> > I need to calculate compounded daily interest on an amount owed by a debtor.
> > Can someone give me a excel formula. I am not a math please layman terms. I
> > know the principal of how it works but don't want to spend a day doing it by
> > calculator. Amount 4324.13 @23.99% from 10/22/03 to 8/23/05

Calculation limited · 08-23-2005, 08:05 PM

Thanks for your help. I am saved.

"[email protected]" wrote:

> Calculation limited wrote:
> > I need to calculate compounded daily interest on an amount owed by a debtor.
> > Can someone give me a excel formula. I am not a math please layman terms. I
> > know the principal of how it works but don't want to spend a day doing it by
> > calculator. Amount 4324.13 @23.99% from 10/22/03 to 8/23/05
>
> Did you advertise (or stipulate) that 23.99% is the "APR"?
>
> If so, then I believe that using 23.99%/365 (0.065726%) for
> the compounded daily interest rate is incorrect. That would
> result in an APR of 27.10%. I believe the correct compounded
> daily interest rate is 0.058930%.
>
> (Note: That is a personal opinion, not a legal one. I do
> not know what is common practice or regulation among lendors.)
>
> Given an APR of 23.99%, this is how I would compute the
> compounded daily interest rate:
>
> RATE(365,,-1,1.2399) [A1]
>
> The number of days (671) can be computed as:
>
> DATE(2005,8,23)-DATE(2003,10,22) [A2]
>
> Do you truly want to compute the "compounded daily interest"
> -- the amount of interest each day(!)? Or do you really want
> to compute something else -- perhaps the total interest
> accumulated between 10/22/03 and 8/23/05, assuming no payments
> and a compounded daily interest rate?
>
> The latter ($2096.49) can be computed as follows:
>
> FV(A1,A2,,-4324.13)-4324.13
>
> I hope that helps. As noted, it is not really clear (to me)
> what you are trying to compute.
>
>