Enter the total amount being borrowed, the interest rate, and the total time the margin is borrowed to determine the total margin amount.

## Margin Interest Formla

The following formula is used to calculate the total amount of interest paid to borrow a certain amount of margin over a given time and interest.

MI = B * (IR/100) /360 * T

- Where MI is total margin interest paid ($)
- B is the total margin borrowed ($)
- IR is the interest rate on the margin
- T is the number of days the margin is borrowed for

## Example Problem

How to calculate margin interest?

**First, determine the total amount of margin borrowed.**For this example, an investor is looking to borrow $30,000.00 on margin to purchase a stock for a short period of time.

**Next, determine the interest rate of the margin.**The brokerage that this investor uses charges a margin interest rate of 7%.

**Next, determine the total amount of days the margin is borrowed for.**In this case, the investor only intends to hold the stock for 30 days.

**Finally, calculate the total margin interest paid.**Using the formula above, the margin interest is calculated to be:

MI = B * (IR/100) /360 * T

MI = 30,000 * (7/100) /360 * 30

MI = $175.00.

It would cost this investor $175.00 to borrow $30,000.00 for 30 days at a 7% interest rate.