Can You Calculate Sum Of Interest Per Day For $395 At An Interest Rate Of 18% Per Annum?


1 Answers

Oddman Profile
Oddman answered
It depends.

If the interest is charged on the basis of 365 days per year, it will be 18% of $395 divided by 365 = (.18)(395)/365 = $.19 per day. ($0.19479...) It would take 154 days to accumulate $30 in interest, if there is no compounding.

If interest is compounded monthly, or if the lender counts business days rather than calendar days, the answer is different.

It is hard to tell from your problem statement if the $30 represents a late charge, or if it represents the minimum balance on which interest is computed. (That is, a $10 balance looks like $30 as far as the interest computation is concerned.) If it is a late charge, it represents an effective interest rate in excess of 90% per year. Don't be late on your payments.

Answer Question