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Thread: PLEASE HELP - interest with increasing principal but not compounded

  1. #1
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    PLEASE HELP - interest with increasing principal but not compounded

    Someone borrows 10 off me every day for 1 year. I charge simple interest (8% per annum in other words 8%/365 per day) on that 10. At the end of the year, I want to know how much interest the debtor needs to pay me in addition to the principal (which is 365 * 10 = 3650).

    So far I have got to this in my thinking:

    P = principal
    i = daily interest which is P * 0.08/365
    d = 365 (being the difference between the start and end date)
    T = total interest for period

    T = (P*i*d) + (2P*i *(d-1)) + (3P*i*(d-2)) + ((4P*i*(d-3)) etc

    I am using Excel for this. My actual data spans a much longer period than 1 year, so I can't type this out. Plus I have about 3,000 amounts I need to do this calculation on.

    Please Please help!
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  2. #2
    MHF Contributor
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    Re: PLEASE HELP - interest with increasing principal but not compounded

    Interest is charged on: 10 * (1, 2, 3, ..... , 363, 364, 365)

    Sum 1 to 365 = 365*366/2 = 66795
    10 * 66795 = 667950

    Total interest = 667950 * .08 / 365 = 146.40

    Not familiar with Excel.
    Thanks from jonah
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