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Daily Compound Interest (Formula) | Step by Step Calculation with Examples [Video]

Daily Compound Interest (Formula) | Step by Step Calculation with Examples

In this video on Daily Compound Interest, here we discuss how to calculate daily compound interest along with its formula and practical examples.

๐–๐ก๐š๐ญ ๐ข๐ฌ ๐ƒ๐š๐ข๐ฅ๐ฒ ๐‚๐จ๐ฆ๐ฉ๐จ๐ฎ๐ง๐ ๐ˆ๐ง๐ญ๐ž๐ซ๐ž๐ฌ๐ญ?
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Daily compounded interest means interest is accumulated on a daily basis and is calculated by charging interest on the principal plus interest earned on a daily basis and hence is higher than interest compounded on a monthly / quarterly basis due to high compounding frequency.

๐ƒ๐š๐ข๐ฅ๐ฒ ๐‚๐จ๐ฆ๐ฉ๐จ๐ฎ๐ง๐ ๐ˆ๐ง๐ญ๐ž๐ซ๐ž๐ฌ๐ญ ๐…๐จ๐ซ๐ฆ๐ฎ๐ฅ๐š
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A=(P (1+r/n)^(nt)) โ€“ P

๐ƒ๐š๐ข๐ฅ๐ฒ ๐‚๐จ๐ฆ๐ฉ๐จ๐ฎ๐ง๐ ๐ˆ๐ง๐ญ๐ž๐ซ๐ž๐ฌ๐ญ ๐„๐ฑ๐š๐ฆ๐ฉ๐ฅ๐ž
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The bank borrows a total of $5000 where the interest rate is 7% and the balance is borrowed for a term of 3 years. Let’s figure out how much the bank will measure the compounded interest on the loan provided.

From above given data we get,

Principle = $5000, Annual Interest = 7%, N = 365, Time(years) = 3

By using above formula we get,

=($5000*(1+7/365)^(365*3))-$5000
= 1168.27

To know more about the ๐ƒ๐š๐ข๐ฅ๐ฒ ๐‚๐จ๐ฆ๐ฉ๐จ๐ฎ๐ง๐ ๐ˆ๐ง๐ญ๐ž๐ซ๐ž๐ฌ๐ญ, you can go to this ๐ฅ๐ข๐ง๐ค ๐ก๐ž๐ซ๐ž:- https://www.wallstreetmojo.com/daily-compound-interest/

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#shortsIn this video, we will learn the 3 shortcuts -1) Select Row (Ctrl + SHIFT)2) Add Row (Ctrl and + sign)3)Add Multiple Rows (After selecting multiple rows, press "Ctrl and + sign")Excel's basic elements are cells, rows, and columns. To perform well in Excel, one must be familiar with these three elements. In this video, we'll demonstrate the shortcut keys related to Rows. Connect with us! Youtube https://www.youtube.com/channel/UChlNXSK2tC9SJ2Fhhb2kOUw?sub_confirmation=1LinkedIn https://www.linkedin.com/company/wallstreetmojo/mycompany/ Facebook https://www.facebook.com/wallstreetmojo Instagram https://www.instagram.com/wallstreetmojoofficial/ Twitter https://twitter.com/wallstreetmojo

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