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Accrued Interest Formula

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Accrued Interest is the interest that has accumulated on a bond since the last coupon payment. Check FAQs

AI = \frac{F \cdot C \cdot D}{M \cdot T}

AI - Accrued Interest?F - Face Value?C - Total Annual Coupon Rate?D - Days since Last Payment Date?M - Number of Coupon Payments per Year?T - Accrual Period?

Accrued Interest Example

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Here is how the Accrued Interest equation looks like with Values.

Here is how the Accrued Interest equation looks like with Units.

Here is how the Accrued Interest equation looks like.

5.1099 = \frac{1500 \cdot 0.06 \cdot 31}{3 \cdot 182}

5.1099 = \frac{1500 \cdot 0.06 \cdot 31}{3 \cdot 182}

5.1099 = \frac{1500 \cdot 0.06 \cdot 31}{3 \cdot 182}

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Accrued Interest Solution

Follow our step by step solution on how to calculate Accrued Interest?

FIRST Step Consider the formula

AI = \frac{F \cdot C \cdot D}{M \cdot T}

Next Step Substitute values of Variables

∴

AI = \frac{1500 \cdot 0.06 \cdot 31}{3 \cdot 182}

Next Step Prepare to Evaluate

∴

AI = \frac{1500 \cdot 0.06 \cdot 31}{3 \cdot 182}

Next Step Evaluate

∴

AI = 5.10989010989011

LAST Step Rounding Answer

∴

AI = 5.1099

Accrued Interest Formula Elements

Variables

Accrued Interest

Accrued Interest is the interest that has accumulated on a bond since the last coupon payment.

Symbol: AI

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Accrued Interest

Face Value

Face Value is the nominal value of a bond, representing the amount the issuer agrees to repay at maturity.

Symbol: F

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Face Value

Total Annual Coupon Rate

Total Annual Coupon Rate is the sum of all coupon payments made by a bond in a year, expressed as a percentage of the bond's face value.

Symbol: C

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Total Annual Coupon Rate

Days since Last Payment Date

Days since Last Payment Date is the number of days that have elapsed since the most recent coupon or interest payment was made on a bond.

Symbol: D

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Days since Last Payment Date

Number of Coupon Payments per Year

Number of Coupon Payments per Year refers to the frequency with which a bond pays interest to its holders within a single year.

Symbol: M

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Number of Coupon Payments per Year

Accrual Period

Accrual Period is the time interval during which interest accrues on a financial instrument, such as a bond or loan.

Symbol: T

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Accrual Period

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How to Evaluate Accrued Interest?

Accrued Interest evaluator uses Accrued Interest = (Face Value*Total Annual Coupon Rate*Days since Last Payment Date)/(Number of Coupon Payments per Year*Accrual Period) to evaluate the Accrued Interest, The Accrued Interest is the interest earned but not yet paid or received on a financial asset, such as a bond, since the last interest payment date. Accrued Interest is denoted by AI symbol.

How to evaluate Accrued Interest using this online evaluator? To use this online evaluator for Accrued Interest, enter Face Value (F), Total Annual Coupon Rate (C), Days since Last Payment Date (D), Number of Coupon Payments per Year (M) & Accrual Period (T) and hit the calculate button.

FAQs on Accrued Interest

What is the formula to find Accrued Interest?

The formula of Accrued Interest is expressed as Accrued Interest = (Face Value*Total Annual Coupon Rate*Days since Last Payment Date)/(Number of Coupon Payments per Year*Accrual Period). Here is an example- 5.10989 = (1500*0.06*31)/(3*182).

How to calculate Accrued Interest?

With Face Value (F), Total Annual Coupon Rate (C), Days since Last Payment Date (D), Number of Coupon Payments per Year (M) & Accrual Period (T) we can find Accrued Interest using the formula - Accrued Interest = (Face Value*Total Annual Coupon Rate*Days since Last Payment Date)/(Number of Coupon Payments per Year*Accrual Period).

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Accrued Interest Formula

Accrued Interest Example

Accrued Interest Solution

Accrued Interest Formula Elements

Other formulas in Fixed Income Securities category

How to Evaluate Accrued Interest?

FAQs on Accrued Interest

Variable Name