0.WTF

[Mobsta]

My math ability = refuse twaddle claptrap jibber junk.

And so, I call upon the collective genius of the PH calculator monkeys, to help salvage and reclaim some sense from my rusty old abacus.

In order to calculate the interest charged on a daily basis, at the monthly rates of 1% and 2% per month, what is the easy way of doing this. There is a long and an easier way, if you can determine the number by which the amount on which the interest is being charged is simply multiplied by.

I think I can figure out the interest, but not the 0.something number which I just multiply the figure by, to quickly/easily get the daily amount of interest due.
I hope that makes sense.

[Alex106]

I for one, havent a tube what your talking about good Sir. Sorry

Admittedly I lost interest when I learnt maths was involved on my last day of work before Christmas

[Exige46]

Which months? If the monthly rate is fixed, then the daily rate will vary depending on the number of days in that month.

Edited by Exige46 on Tuesday 23 December 15:49

[Galileo]

[Munter]

http://www.pcw.co.uk/personal-computer-world/featu...

any good?

[Neil_H]

I think you can work it out from

(I/100) * (1/M)

Where

I = interest rate
M = days in the month

You can use the result of this to multiply with your balance to determine the interest in £ that day.

ETA: that although I work for a bank and deal with financial instruments daily, I am terrible with maths, so this is quite likely to be wrong.

Edited by Neil_H on Tuesday 23 December 15:55

[john2443]

For a 30 day month, multiply the amount you are borrowing/lending by 0.00033333333 and this gives you the interest in £ per day.

eg £1000 x 0.00033333333 = £0.33333

For a 28 day month it is 0.000357143 and 0.00032258 for 31 days - this is assuming the interest ic charged per month - it does seem a bit odd to charge it that way as all months aren't the same length.

[993AL]

Shirley it's % x 12 months divided by 365?

[Mobsta]

Neil_H said:

I think you can work it out from

(I/100) * (1/M)

Where
I = interest rate
M = days in the month

Thats the long way, yes.

What I should have said, is Im looking for a number, where:

(say) £100 * number = daily rate of interest per day.
If this makes no sense either, I stand to be shot

[Mobsta]

john2443 said:

For a 30 day month, multiply the amount you are borrowing/lending by 0.00033333333 and this gives you the interest in £ per day.

eg £1000 x 0.00033333333 = £0.33333

For a 28 day month it is 0.000357143 and 0.00032258 for 31 days - this is assuming the interest ic charged per month - it does seem a bit odd to charge it that way as all months aren't the same length.

I think thats what I was after!
if 1% per month would equal 12% per year, and
if 2% per month would equal 24% per year...
How do you arrive at the 0.000xxx figure which lets you easily calculate how much interest (Im charging) is due for various periods of invoices being overdue, such as 290 days, 150 days, 480 days, etc.

Sorry!

Edited by Mobsta on Tuesday 23 December 16:11

[Neil_H]

Mobsta said:

john2443 said:

For a 30 day month, multiply the amount you are borrowing/lending by 0.00033333333 and this gives you the interest in £ per day.

eg £1000 x 0.00033333333 = £0.33333

For a 28 day month it is 0.000357143 and 0.00032258 for 31 days - this is assuming the interest ic charged per month - it does seem a bit odd to charge it that way as all months aren't the same length.

I think thats what I was after!
if 1% per month would equal 12% per year, and
if 2% per month would equal 24% per year...
How do you arrive at the 0.000xxx figure which lets you easily calculate how much interest (Im charging) is due for various periods of invoices being overdue, such as 290 days, 150 days, 480 days, etc.

Sorry!

Edited by Mobsta on Tuesday 23 December 16:11

He's assuming a 1% interest rate. That's basically the same equation I gave you with some steps removed.

You can rearrange the equation to get the daily percentage rate, I'm a little busy now but will have a go later, or hopefully someone more capable can do it.

The problem you have in calculating it daily is you have to make assumptions, or change the equation depending on the number of days in the month.

Edited by Neil_H on Tuesday 23 December 16:30

[sidicks]

Doesn't all of the above assume simple interest, rather than compound interest............???

[993AL]

Neil_H said:

Mobsta said:

john2443 said:

For a 30 day month, multiply the amount you are borrowing/lending by 0.00033333333 and this gives you the interest in £ per day.

eg £1000 x 0.00033333333 = £0.33333

For a 28 day month it is 0.000357143 and 0.00032258 for 31 days - this is assuming the interest ic charged per month - it does seem a bit odd to charge it that way as all months aren't the same length.

I think thats what I was after!
if 1% per month would equal 12% per year, and
if 2% per month would equal 24% per year...
How do you arrive at the 0.000xxx figure which lets you easily calculate how much interest (Im charging) is due for various periods of invoices being overdue, such as 290 days, 150 days, 480 days, etc.

Sorry!

Edited by Mobsta on Tuesday 23 December 16:11

He's assuming a 1% interest rate. That's basically the same equation I gave you with some steps removed.

I think we are all correct.

for every £1 and for every 1% the interest is £0.0003287/day @ 365 days

[sidicks]

993AL said:

I think we are all correct.

for every £1 and for every 1% the interest is £0.0003287/day @ 365 days

Assuming simple interest, which is not how things work in the real world.....

Cheers

Sidicks

[993AL]

sidicks said:

993AL said:

I think we are all correct.

for every £1 and for every 1% the interest is £0.0003287/day @ 365 days

Assuming simple interest, which is not how things work in the real world.....

Cheers

Sidicks

Agreed, but probably close enough for the OP to backcharge his late payers

[Exige46]

Assuming N day month, at monthly interest rate of i, your amount increases by (1+i)^(1/M) each day.

Therefore for a 30 day month, at interest rate of 1%, your initial amount increases by a factor of 1.00033173270623 each day.

If you had £100 that increases by the above factor each day, after 30 days, you would have £101.

[TWSTEEL]

An easy compound formula which is the way you get stung is PRT/100=I

Interest looks great when it's simple interest but it's compound that buggers you.

That is the compound interest is priciple sum multiplied by annual rate multiplied by time of loan (in years) divided by one hundred. Remember this only gives you the interest payable so you need to add in the principle again before you reduce it to the time you're looking for.

HTH

[sidicks]

TWSTEEL said:

An easy compound formula which is the way you get stung is PRT/100=I

Interest looks great when it's simple interest but it's compound that buggers you.

That is the compound interest is priciple sum multiplied by annual rate multiplied by time of loan (in years) divided by one hundred. Remember this only gives you the interest payable so you need to add in the principle again before you reduce it to the time you're looking for.

HTH

WRONG !!!!!

That is a formula for simple interest........

Interest = Loan (Principal) * Interest rate (annual) * time (years)

Consider a loan for £10,000 over 5 years at 5% simple interest (9.55% APR)
Monthly premium in arrears is £208.33
Total paid is £208.33*60 = £12,500

Simple Interest = 10,000 * 5% * 5 = £2,500

Nothing to do with the compound rate APR (which is the true cost of the loan)...
:-)
HTH

Sidicks

Edited by sidicks on Tuesday 23 December 21:03

Edited by sidicks on Tuesday 23 December 21:04

[thinfourth2]

Can I ask the audience?

[sidicks]

thinfourth2 said:

Can I ask the audience?

My post is correct. Trust me!

Cheers

Sidicks