Help calculating daily interest?

[morrisseysquif]

If the yearly rate is 5.75, to get the daily rate, do I divide the 5.75 by 365?

Do I then multiply that by the amount owed?

0.01575342 x £400

It’s amount x rate x number of days / 365 / 100 (because the rate is per cent)

So 6% on £1000 is £0.16 (rounded)

6 x 1000 / 36500

But to answer your question, you divide by 36500, not 365, and the £0.16 in my sum would be the daily interest amount for £1000 at 6%.

I’m explaining myself well here.

I think it's more complicated than Sausages suggests, so it depends how accurate you need to be, and how big the numbers are...

Compound interest is involved - so on day 1 you would get less than the 16p in the example given, and by dat 360, slightly more, because by then you are calculating the interest on very nearly £1060 rather than £1000......

ok..... that is new to me, thank you!

The real amount is £407.30

The interest rate is 5.75%

Daily interest is 0.00015753

So the daily amount being accrued is

0.0641637p per day

Is that right?

It’s £0.0641637 per day (so 6.41637p) not 0.0641637p.

Ohh, actually, I'll retract that. It will depend how often they add the interest.....
But on the numbers involved, I dont think it will make much difference.

£0.06 per day. 6p per day.

Thank you very much

My everyday maths is so rusty, I'm a bit ashamed!

No problem - I used to work in a bank when we did actual banking, so it’s been like a stroll down memory lane.

As kitten says, interest being passed (added to) the debt will change your figures, as will any repayments that you make. If you want to track the figures, you could do it on a fairly simple spreadsheet.

Took a while with a calculator, but it appears that 5.75% is the per annum rate payable monthly (as is used for mortgages). So the monthly rate is 0.0575/12 = 0. 0048 .

The average month has 30.4 days (365 / 12) and the daily rate is right because (1 + 0.00015753)^30.4 = 1. 0048 . At least that's the best way I can match them.

Anyway, the APR is given by (1+0.00015753)^365 = 1.059179, so that's 5.9%. (actually, I think it's 6.0% because if my memory of actuarial exams is correct, you round up when quoting APR, but I might be misremembering).