1. What is Interest Per Day?

Daily interest calculation shows how much interest accrues on a balance each day based on the annual percentage rate (APR). This helps understand the cost of debt or earnings from investments on a daily basis.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• \( Balance \) — Current account balance in dollars
• \( APR \) — Annual Percentage Rate (percentage)
• \( 365 \) — Number of days in a year

Explanation: The formula converts the annual rate to a daily rate by dividing by 365 days, then applies it to the current balance.

3. Importance of Daily Interest Calculation

Details: Understanding daily interest helps with budgeting, comparing financial products, and seeing how quickly interest can compound over time.

4. Using the Calculator

Tips: Enter your current balance in dollars and the APR as a percentage (e.g., enter 5 for 5%). Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Is the interest compounded daily?
A: This calculation shows simple daily interest. For compound interest, the calculation would be different as interest would earn additional interest.

Q2: Why divide by 365 instead of 360?
A: Most modern financial institutions use actual/365 day count convention. Some may use 360 days - check with your institution.

Q3: How does this relate to monthly interest?
A: Monthly interest would be approximately daily interest × 30, but exact amounts depend on the month's length and compounding.

Q4: Does this work for investments and loans?
A: Yes, the same formula applies to both interest earned on investments and interest paid on debts.

Q5: What's the difference between APR and APY?
A: APR doesn't account for compounding, while APY does. For daily compounding, APY would be higher than APR.