Simple Daily Interest
The following on-line calculator allows you to automatically determine the amount of simple daily interest owed on payments made after the payment due date.
To use this calculator you must enter the numbers of days late, the amount of the invoice in which payment was made late, and the Prompt Payment interest rate, which is pre-populated in the box.
If a payment is less than 31 days late, use the Simple Daily Interest Calculator. If a payment is more than a month late, use the Monthly Compounding Interest Calculator.
This is the formula the calculator uses to determine simple daily interest:
- P is the amount of principal or invoice amount;
- r is the Prompt Payment interest rate; and
- d is the number of days for which interest is being calculated.
For example, if payment is due on April 1 and the payment is not made until April 11, a simple interest calculation will determine the amount of interest owed to the vendor for the late payment. Using the formula, an invoice in the amount of $1,500 paid 10 days late and at an interest rate of 6.625% would be calculated as follows: $1,500 (.066/360*10) = $2.75.