Enter the annual interest rate (%) and the current principal value into the calculator to determine the per diem interest rate and amount.

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## Per Diem Formula

The following formula is used to calculate per diem interest.

DI = AR / 365 * P

- Where DI is the per diem amount ($)
- AR is the annual rate (%)
- P is the principal amount ($)

## Per Diem Definition

Per diem typically refers to the daily amount paid on a loan or mortgage. It comes from the meaning of the word per diem, which means by the day in Latin.

## When is per diem interest used?

Per diem interest is often used when analysis of a loan is being done on a daily basis. Since long-term amounts are hard to comprehend, breaking down an interest into a per diem interest can help simplify it.

## What is Per Diem interest?

A per diem interest is a non-compounding daily interest rate equivalent to the annual interest rate divided by 365. It’s important to note that this is not compounding, otherwise, there would be a big difference between the daily rate and annual rate.

## How to calculate per diem interest?

- First, determine the annual interest rate.
- Next, divide the annual rate by 365.
- Finally, multiply that value by the principal to calculate the per diem amount.