Over the years we have had customers try to figure out how we come up with the interest calculations. Well, we use a computer. No, really we do.

But years ago we had to manually figure the interest. Using pencil, paper and a calculator and a couple of fingers.

We have helped many people over the years with the manual math. the equations we use. Once you know the math or how to get to the math, it is pretty simple.

So here we go.

The equation is

**balance x number of days x co-efficient = interest**.

First off, What was your balance after your last payment was applied to the loan Let's say

**$550.00**.

Then how many days from your last payment on April 11, 2017. Let's say today is May 13, 2017. That is

**32**days.

Your final number? You need to know what your interest rate is, 12%, 18%?

Let's use 18% for this example. There is a calculation within this calculation you will need to do here. There is something called a

**co-efficient**you need to figure out. How do I get the co-efficient?

Take your interest rate divided by 365. Why 365? That is how many days in a year.

So 0.18 ÷ 365 = .00049315. That is your co-efficient.

**.00049315**.

Now your equation is

**550 x 32 x .00049315 =**8.68.

Now if you make a $100 payment $91.32 will go towards your principle and $8.68 will be applied to interest. Your new balance in this example would be $458.68.

Go ahead, give it a try.

458.68 x 30 x .00049315 = _________

There are spreadsheets out there you can use to help you out. But I just wanted to let you know how to do the calculation manually without a computer. You never now, there might be a computer uprising and they might refuse to work. Sometimes the computers don't need an uprising not to work. The are such a love-hate thing.

Happy calculating.

Thank you for reading and have a great day.