Prorated Interest Calculator

About this calculator

Prorated interest calculates the interest owed for a partial period — rather than a full month or year — on a balance earning or accruing a fixed annual rate. The standard method takes the annual rate, divides it into a daily rate (commonly using a 360- or 365-day year convention depending on the financial context), and multiplies that daily rate by the balance and the exact number of days in the partial period.

Lenders use it to calculate interest due when a loan is paid off mid-cycle, banks use it to credit interest on an account that was opened or closed partway through a statement period, and buyers and sellers use it in real estate closings to prorate interest on assumed mortgages or seller-financed deals between the closing date and the next full payment date.

This calculator takes your balance, annual interest rate, and number of days and returns the prorated interest for that period.