Interest on a loan dating back to April 1994?

Question

Interest on a loan dating back to April 1994?

My partner in a real estate development owes me 3% over prime based on LaSalle National Bank of Chicago's prime rate.

For purposes of this Q. I'll use 8%

Using a regular calculator. How would I compute the amount of interest of $80,000, $75,000, $150,000 starting on 4.20.1994 @ 8% per annum until present with a per day amount thereafter?

Answer 1

A simple formula for working out annual compound interest is 1.n (where n is the interest rate, in this case it would therefore be 1.08) to the power x (where x is the number of years over which interest is accrued, in this case 14) multiplied by the original sum owed.  The final figure is the total amount owed from which you subtract the original sum.  If you have a scientific calculator there is a symbol yX if you have this type of calculator you would input 1.08 press yX then the number of years then multiply by original sum owed.  If you don’t have a scientific calculator it can also be done on a basic calculator by inputting 1.08 then pressing the multiplication button twice and then the original sum then pressing the equals sign as many times as there are years owed and again finally subtracting the original sum.  Working out daily interest is more complex and doesn’t simply involve dividing the interest rate by 365.

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