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  1. #1
    New Lounger
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    Converting annual interest rates to a daily rate (2000 SR1)

    Can anyone tell me if there is a way to convert an annual interest rate into a daily rate?

    I'm trying to set up a spreadsheet for a loan in which there is a fixed repayment on a fixed date each month, but this might change in the future. I have a history of the annualised interest rates but the rates change at irregular intervals so the interest is calculated daily so that 365 days of interest equals the annual rate.

    Any help is much appreciated.

  2. #2
    Plutonium Lounger
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    Re: Converting annual interest rates to a daily rate (2000 SR1)

    Let's say that the annual interest rate is in cell A1. It's formatted as a percentage.
    We're going to compute the daily interest rate in cell B1.
    In cell B1, enter the following formula:

    =(1+A1)^(1/365)-1

    Format B1 as a percentage with the desired number of decimal places.

    Explanation: If the yearly interest rate is 6%, the yearly multiplication factor is 1 + 0.06 = 1.06. Compound interest works exponentially, so to calculate the factor for 1 day, we have to take the 365-th power root of the yearly factor: 1.06 ^ (1/365) ~ 1.00016. To get the interest rate, we subtract 1 and get 0.00016. Expressed as a percentage, this is 0.016%.

  3. #3
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    Re: Converting annual interest rates to a daily rate (2000 SR1)

    Many thanks, your fix worked brilliantly.

    Sorry, it seems what I was looking for was a maths fix not a Excel fix.

    Time to dig out the school books again <img src=/S/blush.gif border=0 alt=blush width=15 height=15>.

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