Quizzes & Puzzles33 mins ago
calculating interest
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is there a formula that companies use to calculate interest on a daily basis?
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For more on marking an answer as the "Best Answer", please visit our FAQ.HSBC used to take the balance outstanding each day and calculate the interest per day as the headline rate/365. This would get added to the mortgage sum outstanding on the same date each month, dependent on the number of the days in the month. The capital sum then reduced by repayments made during the month (regular plus any extras), tied to the day the repayment was made.
I would have though this is the way that they calculate intrest - [(Rate/100) x Loan] / 360 - Please note 360 days is because the banking / insurance year only has 360 days That means any given month will only have 30 days and not 31 / 28. Put it this way - for any insuance payout they will calculate 1/30th of your monthly payback value - hence 360 days