In the banking and financial sectors, calculating daily simple interest is important. Excel can be extremely useful for calculating daily simple interest. The purpose of this article is to show you how to calculate **daily simple interest** in Excel. For your convenience, I will explain multiple methods for calculating **daily simple interest**.

## What Is Daily Simple Interest?

**Simple interest** is calculated on the principal amount of a loan or the initial deposit into a savings account. For daily simple interest, interest is accrued every day. The **daily Interest rate** is calculated by dividing the **annual interest rate **by **365**.

The** simple interest** is calculated by multiplying the **principal amount** by the **daily interest rate** by the number of days which is **1** for **daily simple interest**.

The formula for calculating simple interest is,

**Simple Interest = P*r*t**

Where,

**P = Principal Amount
**

**r = Interest Rate (Daily)**

**t = Time (Days)**

For daily simple interest, the formula will be:

Here,** t = 1 day**

So, **Daily Simple Interest = P*r*1**

The formula for calculating the final amount is,

**Final Amount = P*(1+r*t)**

## How to Calculate Daily Simple Interest in Excel: 3 Easy Ways

For this tutorial, I have taken a dataset that contains the **Principal Amount**, **Interest Rate (Daily)**, and **Time (Days)**. I will be using this same table for calculating all the methods. I will explain 3 different methods on how to calculate **daily simple interest** in Excel.

### 1. Using Generic Formula to Calculate Daily Simple Interest in Excel

In this method, I will be using the generic formula for calculating **daily simple interest**.

For example, you have **$10,000** as your** Principal Amount**. Now, with a daily **Interest Rate** of **0.05%**, I will show you how you can calculate the **Final Amount** after **1 **day and the **Daily Interest**.

Letâ€™s see step by step how to calculate **daily simple interest **in Excel by using the generic formula.

**Steps:**

- Firstly, select the cell in which you want to calculate the
**Final Amount**. Here, I selected cell**C9**. - Secondly, in cell
**C9**write the following formula,

`=C5*(1+C6*C7)`

Here, I **multiplied** the **Interest Rate (Daily)** by **Time (Days)**. And then, **summed** it with **1**. Finally, **multiply** this whole value by the** Principal Amount** to get the **Final Amount**.

- Now, press
**ENTER**and you will get the**Final Amount**.

- After that, select the cell where you want to calculate the
**Daily Interest**. Here, I selected cell**C10**. - Next, in cell
**C10**write the following formula,

`=C9-C5`

Here, I** subtracted** the **Principal Amount **from the **Final Amount** to get the **Daily Interest**.

- Finally, press
**ENTER**and you will get the**Daily Interest**.

**Read More:** Convert Compound Interest to Simple Interest in Excel

### 2. Use of IPMT Function to Calculate Daily Simple Interest in Excel

For this 2nd method, I will use the **IPMT function**. Here, I am going to use the same example that I used previously for the 1st method. But, unlike the 1st method here at first, I will calculate the **Daily Interest**. After that, with the **Daily Interest**, I will calculate the **Final Amount**.

Letâ€™s see step by step how to calculate **daily simple interest** in Excel with the use of the **IPMT function.**

**Steps:**

- To begin with, select the cell where you want to calculate the
**Daily Interest**. Here, I selected cell**C9**. - Next, in cell
**C9**write the following formula,

`=IPMT(C6,1,1,-C5)`

Here, in the **IPMT function,** I used **C6 **as **rate, 1 **as **per **because I am calculating interest per day, **1 **as** nper **because I want to see the return after **1** day, and I selected **-C5 **as** pv **which is our present value. Now, this formula will return you the value for **Daily Interest**.

- Finally, press
**ENTER**and you will get your**Daily Interest**.

After that, you will have to calculate the **Final Amount**.

- Firstly, select the cell in which you want to calculate the
**Final Amount**. Here, I selected cell**C10**. - Secondly in cell
**C10**write the following formula,

`=C5+C9`

Here, I summed the **Daily Interest **with the **Principal Amount** to get the **Final Amount**.

- Finally, press
**ENTER**and you will get your**Final Amount**.

### 3. Using FV Function to Calculate Daily Simple Interest in Excel

For the 3rd method, I will be using the same example that I used for the previous two methods. Here, I will use the** FV function** to calculate the **daily simple interest**.

Letâ€™s see step by step how to calculate **daily simple interest** in Excel by using the **FV function.**

**Steps:**

- To begin with, select the cell where you want to calculate your
**Final Amount**. Here, I selected cell**C9**. - After that, in cell
**C9**write the following formula,

`=FV(C6,1,,-C5)`

Here, in the **FV** function, I selected **C6 **as** rate**, and **1 **as **nper **because I am calculating on a daily basis. For **PMT **I left it **blank(,,)** because we are not making any regular payments, and for **pv **I selected **-C5 **which is our present value. Now, this formula will return you the value for the **Final Amount**.

- Finally, press
**ENTER**and you will get the**Final Amount**.

- After that, select the cell where you want to calculate the
**Daily Interest**. Here, I selected cell**C10.** - Next, in cell
**C10**write the following formula,

`=C9-C5`

Here, I** subtracted** the **Principal Amount **from the **Final Amount** to get the **Daily Interest**.

- Finally, press
**ENTER**and you will get your**Daily Interest**.

**Read More: **How to Calculate Simple Interest Loan Payments in Excel

## How to Calculate Daily Compound Interest in Excel

Compound interest is calculated on the initial principal amount and the earned interest from the previous period.

The formula for calculating the **Final Amount **for compound interest is,

**Final Amount = P*(1+r/n)^nt**

Where,

**P = Principal Amount
**

**r = Interest RateÂ (Annually)**

**n = Compounding Periods (Per Year)**

**t = Time**

Here, I am going to use this generic formula to calculate **daily compound interest **in Excel.

For example, you have **$10,000** as your** Principal Amount**. Your yearly **Interest Rate** is **5.00%** and the **Compounding Period **per year is **1**. I will show you how you can calculate the **Final Amount** after **1 **year and the **Interest** you will earn. And from that interest, I will calculate the **Daily Interest** for the first year.

Letâ€™s see step by step how to calculate **daily compound interest **in Excel by using the generic formula.

**Steps:**

- To begin with, select the cell in which you want to calculate the
**Final Amount.**Here, I selected cell**C10**. - After that, in cell
**C10**write the following formula,

`=C5*(1+C6/C7)^(C7*C8)`

Here, I **divided **the **Interest Rate **by the **Compounding Periods **and then **summed **this part with **1**. And then** raised **this whole part to the power of **Compounding Periods multiplied **by **Time**. Finally, I **multiplied **this whole part by the **Principal Amount **to get the **Final Amount**.

- Now, press
**ENTER**to get the**Final Amount**.

After that, I will calculate the **Interest (Earned in 1st Year)**.

- Firstly, select the cell in which you want to calculate the
**Interest (Earned in 1st Year)**. Here, I selected cell**C11**. - Secondly, in cell
**C11**write the following formula,

`=C10-C5`

Here, I **subtracted **the **Principal Amount **from the **Final Amount** to get the **Interest (Earned in 1st Year)**.

- Now, press
**ENTER**and you will get theÂ**Interest (Earned in 1st Year)**.

And finally, we can calculate the **Daily Interest (For the 1st Year) **from theÂ **Interest (Earned in 1st Year)**.

- To begin with, select the cell in which you want to calculate the
**Daily Interest (For the 1st Year)**. Here, I selected cell**C12**. - After that, in cell
**C12**write the following formula,

`=C11/365`

Here, I divided the **Interest (Earned in 1st Year) **by **365 **to get the **Daily Interest (For the 1st Year)**. **365 **is the number of days in a year.

- Finally, press
**ENTER**to get theÂ**Daily Interest (For the 1st Year)**.

## Things to Remember

- It should be noted that in
**simple interest,**the interest earned is calculated on the**principal amount**. - Â Whereas, in
**compound interest**, the interest earned is calculated on the**principal amount**and the**interest earned**from the**previous period**.

## Practice Section

Here, I have provided a practice sheet. So that, you can practice by yourself different methods on how to calculate **daily simple interest** in Excel.

**Download Practice Workbook**

## Conclusion

In conclusion, I tried to show you different methods on how to calculate **daily simple interest** in Excel. Hope it was clear to you. Apart from this, I tried to give you an idea about compound interest.

More importantly, I suggest you practice by yourself to get perfection. And lastly, if you have any questions or any suggestions donâ€™t forget to let me know in the comment section below.

**Related Articles**

- How to Calculate Simple Interest and Compound Interest in Excel
- How to Calculate Simple Interest on Reducing Balance in Excel

**<< Go Back to Simple Interest Formula in Excel |Â ****Excel for Finance**** | ****Learn Excel**