To calculate daily interest:
\[ DI = \frac{LB \times AIR}{365} \]
Where:
Daily interest is the average daily interest paid on a loan or credit based on the annual interest rate and total loan balance. This formula calculates the total interest you would pay each day on a loan throughout its lifetime. This will not equal your actual payments since that is most often paid in terms of months.
Let's assume the following values:
Step 1: Multiply the loan balance by the annual interest rate:
\[ LB \times \frac{AIR}{100} = 1000 \times 0.05 = 50 \]
Step 2: Divide the result by 365:
\[ DI = \frac{50}{365} = 0.14 \text{ dollars per day} \]
