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Accrued Interest Formula:
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Accrued interest is the amount of interest that has accumulated on a debt or investment but has not yet been paid or received. It's calculated based on the principal amount, interest rate, and the time period for which the interest is being calculated.
The calculator uses the accrued interest formula:
Where:
Explanation: The formula calculates how much interest accrues over a specific period by considering the exact time difference down to the hour.
Details: Precise interest calculation is crucial for financial planning, accounting accuracy, loan agreements, and investment returns. Even small errors can lead to significant discrepancies over time.
Tips: Enter the principal amount, annual interest rate (as a percentage), and select both start and end dates with times. The calculator will compute the exact interest accrued during that period.
Q1: Why calculate interest by hours instead of days?
A: Hourly calculation provides greater precision, especially for short-term loans or investments where even a day's difference can be significant.
Q2: Does this calculator account for compound interest?
A: No, this calculates simple interest. For compound interest, a different formula would be needed.
Q3: What's the advantage of using 8760 hours?
A: Using hours in a year (8760) allows for more precise calculations than using 365 days, especially for periods less than a day.
Q4: Can I use this for any currency?
A: Yes, the calculator works with any currency as long as you input the principal amount in that currency's units.
Q5: How accurate is this calculation?
A: It's mathematically precise for simple interest calculations, but doesn't account for factors like leap years or compounding.