Periodic Interest Rate Calculator

Plus, you can print out a copy of the running balance schedule so you can just start from where you left off on your next visit. The Experian Smart Money™ Debit Card is issued by Community Federal Savings Bank (CFSB), pursuant to a license from Mastercard International. While we strive for accuracy in our proprietary calculations, users should verify critical results independently. Negotiating a lower APR with your lender is the most effective way to reduce your DPR.

• So if you have a question about the calculator’s subject, please seek out the help of someone who is an expert in the subject.
• If interest is compounded annually, that same accrued interest won’t accrue additional interest until the next year.
• The Experian Smart Money™ Debit Card is issued by Community Federal Savings Bank (CFSB), pursuant to a license from Mastercard International.
• Enter the period’s ending date or specify the number of days since the start (or last period) date, and then click the Calculate Daily Interest button.
• Using the prior example, assume you borrow $100 for one year and pay a finance charge of $10.

Calculating Daily Compound Interest

If your issuer uses this method, it means the interest on your card is compounded on a daily basis. The principal balance is the amount you borrowed, less the amount you have paid back. If the rate charged for this interest period is different from the starting rate, enter the new rate on this line, but without the percent sign (for 6.5%, enter 6.5). Otherwise, if you leave the field blank, the calculator will use the starting rate for this period. If you entered a date in the previous line, the number of days in this interest period will be calculated for you. Otherwise, you can enter a number of days in this field and the calculator will update the month, day, and year in the previous line for you.

Related Calculators

Multiply the daily interest by the number of days in your payment period to calculate the interest that will be charged for the month. If it’s February, then the interest cost of the sample loan is 28 times $51.48, which equals $1,441. You may get a more accurate result by using an online calculator, as decimals won’t be dropped or rounded as they usually are when calculating manually. As the math in the example demonstrates, using a daily periodic rate as opposed to a less frequent compounding schedule doesn’t make an enormous difference when the APR is 4 percent. Imagine you were charging an APR of 12 percent, in line with what some credit cards charge. Daily compounding of a $10,000 balance for a year would bring the balance to $11,274.75, for an effective rate of nearly 12.75 percent.

Since APRs are a broader measure of borrowing costs than interest rates, it can be helpful to compare APRs when you shop for loans or apply for credit cards. But APR measures the annual cost of borrowing money, while APY is the amount earned on things like savings accounts or certificates of deposit. For the APR formula, you’ll need to determine a loan’s total interest charges.

Reasons to find the daily periodic interest rate

For loans where the interest is compounded daily, understanding the daily interest can help borrowers plan their payments more effectively. For example, a $5,000 loan with a 10% annual interest rate would accrue daily interest of approximately 0.0274%. This method of interest calculation is particularly useful for short-term loans, credit card balances, and some savings accounts where interest is compounded daily. When it comes to managing your money, knowing about the daily interest rate is important. It helps you figure out how much you’ll pay in interest every day when you borrow money.

What Is a Credit Card Daily Periodic Rate?

The period of time, principal, interest rate and interest type are the key components to perform the comparison between the different loan options. Before going for any short term loan the interest rate comparison is must. Because even a small change how to calculate daily apr in interest rate percentage effect the greater change in total interest.

• This online calculator computes the daily interest rate, the total interest accrued on an amount of borrowed money.
• Understanding how daily interest works and how to calculate it can help you manage your loan more effectively and minimize your overall interest expenses.
• Since we’re calculating compound interest, the $249.54 is added to the principal for the next compounding period.
• Loans, savings accounts, and credit cards all accrue interest over time.
• But it’s still helpful to know the difference between variable and fixed APRs.
• With compound interest, the interest you have earned over a period of time is calculatedand then credited back to your starting account balance.
• They do this by multiplying that rate by the amount you owe on a card at the end of each day.

A credit card’s daily periodic rate is the interest rate that applies to your daily balance to determine how much interest will accrue at the end of the day. You can calculate it by dividing the card’s interest rate by 360 or 365, depending on your card’s terms. If you want to borrow money, you should first figure out the cost of doing so.

Period rate (if different from start rate):

In other words, it gives you a better idea of how much that new TV could end up costing you if you pay interest on it. Let’s say one of the credit cards in your wallet carries an APR of 19.99%. You can figure out the daily periodic rate by dividing the APR by 365—or by 360, depending on which number your issuer uses.

Daily Percentage Rate

Understanding APR can give you a better picture of borrowing costs than interest rates alone. Offer pros and cons are determined by our editorial team, based on independent research. The banks, lenders, and credit card companies are not responsible for any content posted on this site and do not endorse or guarantee any reviews. No matter the type of card, your credit score can impact the decision, and you can check your credit for free with Experian.