A student loan is a government loan that is available to students at a college or university in order to help them pay their expenses.
The student loan interest is normally added to your principal, increasing your student loan balance.
Formula to calculate student loan interest.
- Calculate your daily interest rate, this is done by dividing the annual interest by 365.
- Calculate the amount of interest your loan accrues per day.
- Find your monthly interest payment.
Calculate a student’s loan interest if the amount of loan for her entire course was $ 1,000 and the annual interest rate was 10%.
Therefore, we will begin by calculating the daily interest.
= 10 ÷ 365
Then calculate the daily interest amount by multiplying the principle by the daily interest rate.
= 0.0274 x 1,000
Lastly, find the month payment by multiplying the daily interest by 30.
= 27.4 x 30
Therefore, the student’s loan interest by month is $ 822.