1. What is Loan Interest Per Day?

The daily interest calculation shows how much interest accrues on a loan each day. This helps borrowers understand the cost of carrying debt on a daily basis.

2. How Does the Calculator Work?

The calculator uses the simple daily interest formula:

Where:

• \( Loan \) — Principal amount in USD
• \( Rate \) — Annual interest rate in decimal form (e.g., 0.05 for 5%)
• 365 — Number of days in a year

Explanation: The formula calculates the daily portion of the annual interest by dividing the yearly interest by 365 days.

3. Importance of Daily Interest Calculation

Details: Understanding daily interest helps with budgeting, comparing loan options, and calculating the true cost of short-term borrowing.

4. Using the Calculator

Tips: Enter loan amount in USD and annual interest rate in decimal form (e.g., 0.1 for 10%). Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Is this the same as compound interest?
A: No, this calculates simple daily interest. Compound interest would include interest on previously accrued interest.

Q2: Why divide by 365 instead of 360?
A: Most modern loans use actual/365 day count convention. Some loans may use 360 days - check your loan terms.

Q3: How accurate is this for variable rate loans?
A: It gives the current daily rate based on the current principal and rate. It won't predict future changes.

Q4: Can I use this for credit card interest?
A: Credit cards typically use daily periodic rates (APR/365) but may have different compounding methods.

Q5: How does this relate to APR?
A: The rate input should be the APR in decimal form (APR% divided by 100).