I'm trying to calculate the interest accrued on my amortization schedule manually. I can calculate it fine if payments are exactly one month apart but this payment is More than 1 month apart.
This is a similiar question to Calculating Interest Accrued With an Uneven Interval but slightly different. That question asked when the duration is less than a month, I'm wondering what should happen if it's over a month, slightly.
Last transaction date is 2017-01-01
Next payment is on 2017-02-15 and interest accrued is 609.25 for this payment.
Details of loan
As of 2017-01-01 balance is $100,000
Compounding Monthly
Interest rate 5%
May I ask how was 609.25 calculated?
I tried multiple approaches, first one is calculating 1 month + days left
1 month of interest accrued
accrued = (((( 1 + (.05 / 12)) ^ 12) ^ (1/12) - 1) * 100000)
= 416.67
14 days left (using solution from the previous post)
$100,000 * 0.05 * (14 / 365) = $191.78
Summing the two together gives me $608.45 which is close but not quite correct.
Second approach I took is calculating daily interest accrued.
accrued = (((( 1 + (.05 / 12)) ^ 12) ^ (14/365) - 1) * 100000)
= 617.05
The day count basis for accrued interest is actual/365.
May I ask what is the correct way to calculate the interest accrued.
