Daily, weekly, monthly, and yearly interest rates

For loans such as overdraft or invoice financing where interest tend to be calculated on a per day basis, it is very important to know if the Financing Partner is offering it on a daily, weekly or monthly basis.

Take for example a 45-days invoice of $100,000 at 2% per month calculated accordingly. With Daily (30 day) at 0.06% per day or Weekly (4 weeks used here) at 0.5% weekly approximately.

Daily

Weekly

Monthly

45 days x 0.06% x $100,000 = $102,700

45 days is considered as 7 weeks

7 weeks x 0.5% x $100,000 = $103,500 an extra of $800 or close to 30% more than a daily interest loan

45 days is considered as 2 months

2 months x 2% x $100,000 = $104,000 an extra of $1,300 or 48% more than a daily interest loan

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