## About Per Diem Calculator (Formula)

Per diem is a type of interest calculated on a daily basis. It is typically used for short-term loans or credit lines. The formula used to calculate per diem interest is:

**DI = (AR / 365) * P**

Where:

DI = Per diem interest AR = Annual interest rate (expressed as a decimal) P = Principal amount (the initial amount of the loan or credit line)

It’s important to note that the formula assumes a 365-day year, so if the loan or credit line is for a period of time that is not a full year, the formula should be adjusted accordingly.

The formula above is used to calculate the per-diem interest for a day and as you can see, it’s the annual interest rate divided by 365 days and multiplied by the principal.

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