# Monthly Interest Calculator (with Examples and Formula)

This online calculator computes the interest accrued monthly on an amount of borrowed money.

Enter

• Principal or Initial Loan amount in any currency
• Annual Percentage Rate (APR) or Interest Rate
• Number of days in the month (28, 29, 30 or 31)

The calculator will provide the following interest numbers: daily rate (%), daily amount and total amount over the month (in any currency).

## Formula

Daily Periodic Rate = APR/365

Daily Interest = Current Balance × Daily Periodic Rate

Total Interest = Principal × (1 + Daily Interest Rate)N – Principal

where N is the number of days in a month

## Example Calculation

A principal amount of \$5000 at an APR of 5% gives a monthly interest of \$20.59.

## Background

A Monthly Interest Calculator is a tool designed to help you determine how much interest accrues on a balance over a month. This can be particularly useful for managing monthly loan payments, understanding the growth of investments, or calculating interest on savings.

## What is Monthly Interest?

Monthly interest refers to the amount of interest that accrues on a principal balance over the course of a month. This can apply to various financial products, including:

• Loans: Most personal, auto, and home loans calculate interest monthly.
• Mortgages: Mortgage interest is typically calculated and added to the principal balance on a monthly basis.
• Savings Accounts: Some savings accounts and certificates of deposit (CDs) accrue interest monthly.
• Credit Cards: While credit cards often calculate interest daily, they commonly report and apply interest charges monthly.