1. What is Per Diem Interest?

Per diem interest is the daily interest amount calculated from a monthly interest rate. It's commonly used in mortgage and loan calculations to determine the daily cost of borrowing.

2. How Does the Calculator Work?

The calculator uses the simple per diem formula:

Where:

• Monthly Interest — The total interest paid per month (in USD)
• 30 — Standard number of days used to calculate daily rate

Explanation: This calculation assumes a 30-day month for simplicity, which is standard practice in many financial calculations.

3. Importance of Per Diem Calculation

Details: Knowing your daily interest cost helps with financial planning, comparing loan options, and understanding the true cost of borrowing over short periods.

4. Using the Calculator

Tips: Enter your total monthly interest payment in USD. The calculator will automatically compute your daily interest cost.

5. Frequently Asked Questions (FAQ)

Q1: Why divide by 30 instead of actual days in month?
A: Financial institutions often use 30 as a standard divisor for simplicity in calculations, though some may use actual days.

Q2: Can I use this for annual interest rates?
A: First convert annual interest to monthly by dividing by 12, then use this calculator.

Q3: Is this the same as daily compound interest?
A: No, this calculates simple daily interest. Compound interest calculations are more complex.

Q4: How accurate is this for mortgage calculations?
A: It provides a good estimate, but exact mortgage per diem may vary based on lender's specific methods.

Q5: What if my monthly payment changes?
A: Recalculate whenever your monthly interest amount changes for accurate per diem figures.