Formula to calculate interest only on a short term loan?


E

Excel2007Help

I am not familiar with Excel 2007 and need to calculate a bridge loan MONTHLY
INTEREST ONLY scenario, with a fixed %rate, for a range of 1 -6 months. Not
sure if if interest accrues daily or monthly.
 
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F

Fred Smith

Assuming you have an annual interest rate, a month's interest is:
=Principal*IntRate/12

This may be good enough for your purposes. Most financial institutions would
calculate the interest based on the number of days in the month, so
something like:
=Principal*IntRate/365*day(eomonth(a1,0))

Regards,
Fred.
 

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