Accrued Interest Excel Formula and Calculator

Accrued interest is interest earned or owed between payment dates. For a simple fixed-rate loan, calculate it in Excel as =Principal*AnnualRate*Days/DayCountBasis; the calculator below uses actual days and a 365-day basis to estimate the amount. Enter the principal, annual rate, and elapsed days to get accrued interest, with an optional daily amount for checking the calculation.

Formula

The simple-interest formula is:

Accrued interest = Principal × Annual rate × Days accrued ÷ Day-count basis

In Excel, if principal is in A2, annual rate in B2, days accrued in C2, and the annual basis in D2, use =A2*(B2/100)*C2/D2 when B2 contains a percentage written as a whole number, such as 8 for 8%. If B2 is formatted as a percentage and contains 8%, use =A2*B2*C2/D2 instead. The calculator treats the rate input as a whole-number percentage and uses 365 as its day-count basis.

• Principal is the balance on which interest accrues, in dollars.
• Annual rate is the stated yearly rate as a percentage; divide by 100 to convert it to a decimal.
• Days accrued is the number of days in the period being measured.
• Day-count basis is the number of days used for a year in the calculation, here 365.

This is a simple-interest estimate. It does not apply interest-on-interest or adjust for payment allocation, changing balances, fees, or a contract’s specific accrual conventions.

Worked Example

Using the calculator’s default inputs—$20,000 principal, an 8% annual rate, and 30 days accrued—the calculation is:

1. Convert the rate to decimal form: 8 ÷ 100 = 0.08.
2. Multiply principal by the annual rate: $20,000 × 0.08 = $1,600 per year.
3. Allocate that amount across 365 days: $1,600 ÷ 365 = $4.38356 per day.
4. Multiply by 30 days: $4.38356 × 30 = $131.51, rounded to cents.

The calculator’s first result is $131.51 accrued interest. Its daily-interest output is $4.3836, rounded to four decimal places.

Using the Formula in Excel

Set up a small worksheet with clearly labelled cells. For example, put the principal in A2, annual rate in B2, elapsed days in C2, and the day-count basis in D2. Enter =A2*(B2/100)*C2/D2 in E2. Format E2 as currency and the rate cell as a number or percentage consistently. If the rate is entered as 8%, not 8, use =A2*B2*C2/D2; dividing a percentage-formatted 8% by 100 again would understate the result by a factor of 100.

To use a basis of 360 days, enter 360 in D2 rather than 365. Keeping the basis in a cell makes the assumption visible and easier to change. The right basis is not universal: loan documents, investment terms, and accounting conventions may specify different day-count methods. Some methods count actual calendar days but use 360 or 365 as the denominator; others use a 30-day month convention. Follow the applicable agreement when you need a contractual figure.

What Accrued Interest Means

Interest may build up continuously or day by day even when a borrower pays monthly or an investment pays at maturity. Accrued interest is the portion associated with the time elapsed since the last payment or settlement date. It is distinct from the total amount paid over a loan’s life and from the full next payment, which may include principal or other amounts.

For a fixed principal and simple interest, the calculation is proportional to both the rate and the number of days: double either one and accrued interest doubles. If principal changes during the period—for example, because payments reduce a loan balance—the balance may need to be calculated for each segment of time. Applying one starting balance to the entire interval can then overstate interest.

Choosing Inputs and Reading the Result

• Use the relevant balance. For a constant-balance estimate, enter the principal that actually earns interest during the period.
• Use the annual rate that applies to that balance. A quoted APR may include or describe costs differently from the rate used to accrue interest; check the agreement’s definition.
• Count the intended days. Be clear about whether the start date, end date, or both are included. A one-day difference changes the result by roughly one day’s interest.
• Match the day-count convention. Use 365, 360, or another basis only when it matches the method you are modelling.

The output is interest for the period, not a payoff quote or a guaranteed amount due. The daily figure is a useful reasonableness check: multiply it by the number of days to approximate the displayed accrued interest, allowing for rounding.

Common Errors and Formula Limits

A frequent Excel error is mixing rate formats. A cell containing 8% stores 0.08, while a cell containing 8 stores eight; the formulas must reflect that difference. Another is using 30 as a count of days while the period actually spans 31 calendar days, or changing the denominator without checking the applicable convention.

This calculator assumes a constant balance, a fixed annual rate, simple accrual, and a 365-day denominator. It does not model daily compounding, variable rates, payment dates, partial payments, grace periods, capitalization, fees, or a lender’s rounding sequence. For compounding, accrual can depend on how often interest is added to the balance, so the simple formula is not sufficient. If the balance or rate changes, calculate each interval separately using that interval’s balance, rate, and day count, then add the amounts.

Frequently Asked Questions

What is the Excel formula for accrued interest?
For simple interest, use =Principal*AnnualRate*Days/DayCountBasis. If the annual rate is entered as 8 rather than 8%, divide it by 100 in the formula.

How do I calculate accrued interest for 30 days?
Multiply the principal by the annual rate expressed as a decimal, then multiply by 30 and divide by the applicable day-count basis. For $20,000 at 8% using 365 days, the result is $131.51.

Should I use 360 or 365 in Excel?
Use the basis required by the agreement or convention you are modelling. The two choices produce different amounts; neither is automatically correct for every product or calculation.

Does accrued interest include principal repayment?
No. This formula calculates interest only. A scheduled payment can include both interest and principal, and a payoff amount may include additional contract-specific items.

Can this formula calculate compound interest?
No. It estimates simple interest on a constant balance. Compounding or a changing balance requires a method that accounts for each balance change and the timing of interest additions.

Assumptions

• The annual rate and principal remain fixed during the period.
• Interest is simple, not compounded.
• The calculator uses a 365-day year and does not decide which dates a contract counts.
• Fees, taxes, payment allocation, and other charges are not included.

This result is an estimate; the lender’s disclosure gives the exact figures.

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in p | Principal | $ | 20000 | 0 | 100000000
in apr | Annual interest rate | % | 8 | 0.01 | 100
in days | Days accrued | days | 30 | 0 | 36500
out interest | Accrued interest | $ | p * (apr / 100) * days / 365 | 2
out daily | Interest per day | $ | p * (apr / 100) / 365 | 4