1. What is Daily Interest Rate?

The daily interest rate represents the interest charged or earned on a daily basis, calculated by dividing the annual interest rate by 365 days. This is commonly used in G-Credit and similar loan products where interest accrues daily.

2. How Does the Calculator Work?

The calculator uses the simple formula:

Where:

• \( Annual\ Rate \) — Annual interest rate expressed as a decimal (e.g., 0.15 for 15%)
• \( 365 \) — Number of days in a year
• \( Daily\ Rate \) — Resulting daily interest rate as a decimal

Explanation: This calculation converts an annual percentage rate into its equivalent daily rate for accurate daily interest accrual calculations.

3. Importance of Daily Rate Calculation

Details: Calculating daily interest rates is essential for understanding the true cost of short-term loans, managing daily interest accrual, and making informed financial decisions with G-Credit products.

4. Using the Calculator

Tips: Enter the annual interest rate as a decimal value (e.g., enter 0.12 for 12% annual rate). The calculator will automatically compute the equivalent daily rate.

5. Frequently Asked Questions (FAQ)

Q1: Why divide by 365 instead of 360?
A: Dividing by 365 provides a more accurate daily rate calculation as it accounts for the actual number of days in a year, while 360 is sometimes used in commercial lending for simplicity.

Q2: How do I convert percentage to decimal?
A: Divide the percentage by 100. For example, 15% becomes 0.15, 8.5% becomes 0.085.

Q3: What is a typical daily rate for G-Credit?
A: Daily rates vary by lender and product, but typically range from 0.0002 to 0.001 (0.02% to 0.1% daily) depending on the annual rate and risk factors.

Q4: Can I use this for compound interest calculations?
A: Yes, the daily rate calculated here can be used in compound interest formulas where interest compounds daily.

Q5: How accurate is this calculation for leap years?
A: This calculation uses 365 days for consistency. For precise leap year calculations, you would divide by 366, but most financial institutions use 365 for standardization.