How do I calculate bank' daily interest ?

[2uk]

I am totally fed up with speaking to the Barclays support monkeys asking to explain this to me:

How do I calculate daily interest ?

My bank’s interest is 4 %.

Interest is calculated daily.

How do I figure what kind of interest I get daily on 606 ponds.

[BrilloPad]

I am totally fed up with speaking to the Barclays support monkeys asking to explain this to me:

How do I calculate daily interest ?

My bank’s interest is 4 %.

Interest is calculated daily.

How do I figure what kind of interest I get daily on 606 ponds.

606 * (4/100) * (1/365). But they only add it to the account annually?

[2uk]

606 * (4/100) * (1/365). But they only add it to the account annually?

That equals to :

0.01660273972602739726027397260274

Is this 1.6 pence per day ?

[Sockpuppet]

Yes.

[bored]

http://www.bba.org.uk/bba/jsp/polopoly.jsp?d=135&a=1575

HTH

[Moscow Mule]

606 * (4/100) * (1/365). But they only add it to the account annually?

It also depends on what basis they use - some banks use 360 days. You can normally expect them to use the least favourable on your favour.

[bored]

It also depends on what basis they use - some banks use 360 days. You can normally expect them to use the least favourable on your favour.

This is not entirely true, the AER must be calculated using actual/365:

http://www.bba.org.uk/bba/jsp/polopo...261&artpage=10

Where contractual rates are quoted on the basis of other than a 12 month period, this must be clearly stated. Where an interest rate is calculated on a basis other than actual/365, the basis should be stated and the AER should nonetheless be calculated on an actual/365 basis.

[ittony]

I am totally fed up with speaking to the Barclays support monkeys asking to explain this to me:

How do I calculate daily interest ?

My bank’s interest is 4 %.

1.04 ^ (1 / 365)

[tim123]

1.04 ^ (1 / 365)

No, that the compounding equation.

It doesn't calculate what the OP has asked. (try it and see)

tim

[MrRobin]

What? Huh?

Firstly, 606 * (4/100) * (1/365) = 0.066411... = 6.6 pence

But if you charged £6.66 pence interest for 100 days then you would actually be charging slightly higher than 4% since you are not accounting for compounding.

ittony is correct in saying 1.04 ^ (1 / 365) is the daily interest rate. (=1.000107)

So if you want to work out the interest payable on x days on £606 then it is:

606 * (1.000107)^x - 606

100 days is £6.55.