What is the formula for simple interest for days?

Formula for Simple Interest for Days

Simple interest is the interest charged on a loan or investment over a specific period of time. Unlike compound interest, simple interest does not consider the interest earned on previously accrued interest. The formula for simple interest for days is given by:

Simple Interest = (Principal x Days x Rate) / 36500

where:

• Principal is the initial amount borrowed or invested
• Days is the number of days for which the interest is calculated
• Rate is the annual interest rate expressed as a percentage

Calculating Simple Interest for Various Timeframes

To calculate simple interest for different timeframes, we can use the following formulas:

• Annual interest:

Annual Interest = (Principal x Rate x 1) / 100

• Monthly interest:

Monthly Interest = (Principal x Months x Rate) / 1200

where:

• Months is the number of months for which the interest is calculated

• Daily interest (non-leap year):

Daily Interest = (Principal x Days x Rate) / 36500

Example Calculations

Example 1:

Calculate the simple interest on a loan of $10,000 for 60 days at an annual interest rate of 5%.

Solution:

Simple Interest = (10000 x 60 x 5) / 36500

Simple Interest = $82.19

Example 2:

Calculate the monthly interest on a deposit of $5,000 for 6 months at an annual interest rate of 4%.

Solution:

Monthly Interest = (5000 x 6 x 4) / 1200

Monthly Interest = $10

Example 3:

Calculate the daily interest on a short-term loan of $2,500 for 15 days at an annual interest rate of 6%.

Solution:

Daily Interest = (2500 x 15 x 6) / 36500

Daily Interest = $0.25