The Accrued Interest Calculator computes interest accumulated on a loan or investment over a defined period, based on the annual interest rate.

This tool aids in tracking daily interest accrual on unpaid loan balances or investments, supporting precise financial planning and debt management.

Enter the principal amount, annual interest rate, and days since the last payment to determine the accrued interest.

Accrued Interest Calculator

Accrued Interest Calculator

Accrued Interest Calculation Method

Accrued interest is derived from the principal balance, annual interest rate, and days elapsed since the last payment or interest assessment.

Formula:

\(\text{Accrued Interest} = \text{Principal} \times \frac{\text{Annual Interest Rate}}{365} \times \text{Days Accrued}\)

The annual rate is divided by 365 (or 360 in certain contexts) to yield a daily rate, then multiplied by the principal and accrual days. This method ensures accurate interest computation for loans and investments over specific intervals.

Definition of Accrued Interest

Accrued interest is the unpaid interest accumulated on a loan or investment, calculated daily based on the principal and interest rate until settlement.

For loans, it incrementally increases the outstanding balance until paid. For investments like bonds, it reflects earned but uncollected interest.

This metric is critical in finance for assessing liabilities or receivables within designated periods.

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