+ Reply to Thread
Results 1 to 3 of 3

Calculate daily interest rate

  1. #1
    Registered User
    Join Date
    02-16-2007
    Posts
    8

    Calculate daily interest rate

    Some years ago I came across a formulae to calculate Daily Interest on a Building Society Savings account in the UK.
    I have used this since but find my calculations never work out the same as my BS, although to my advantage!
    It is =B3*B4/360*DAYS360(B5,B6,TRUE)
    Where:
    B3=Capital
    B4=Interest Rate
    B5=Starting Date
    B6=Finishing Date
    For some reason the formulae uses 360/year and not 365/year.
    Using both still gives wrong answer.
    If anyone has an answer or a better formulae I would appreciate it.
    Many thanks.
    I use Excel 2000
    Last edited by VBA Noob; 11-09-2008 at 07:07 AM.

  2. #2
    Forum Moderator daddylonglegs's Avatar
    Join Date
    01-14-2006
    Location
    England
    MS-Off Ver
    2016
    Posts
    14,676
    DAYS360 doesn't give an accurate count of days between 2 dates, it's better to just subtract the earlier date from the later one. So you might use this formula

    =B3*B4/365*(B6-B5)

    Arguably you ought to change 365 to 365.25 to take leap years into account. Either way you might still see some discrepancy between the result of this calculation and what is actually paid depending on how your BS treats leap years.

    Another thing to take into account is whether you are also earning interest on the interest itself. Many banks used to credit interest on a monthly or yearly basis and not pay interest on that extra amount until it was actually credited but some will now pay interest on interest almost as soon as it's earned, i.e. on a daily basis, even if it isn't actually creditted to the account each day......

  3. #3
    Registered User
    Join Date
    02-16-2007
    Posts
    8
    Many thanks for your reply.
    All sorted now.
    My previous thanks yesterday does not seem to have been posted

+ Reply to Thread

Thread Information

Users Browsing this Thread

There are currently 1 users browsing this thread. (0 members and 1 guests)

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts

Search Engine Friendly URLs by vBSEO 3.6.0 RC 1