1. What is Cash Advance Interest?

Cash advance interest is the fee charged by financial institutions for borrowing cash against a credit line. It's typically calculated daily from the transaction date until full repayment is made.

2. How Does the Calculator Work?

The calculator uses the simple interest formula:

Where:

• \( Amount \) — Cash advance amount in currency
• \( Daily\ Rate \) — Daily interest rate as a percentage
• \( Days \) — Number of days the amount is outstanding

Explanation: The formula calculates the total interest by multiplying the principal amount by the daily interest rate (converted to decimal) and the number of days.

3. Importance of Interest Calculation

Details: Understanding cash advance interest helps borrowers make informed financial decisions, compare different credit options, and plan for timely repayment to minimize costs.

4. Using the Calculator

Tips: Enter the cash advance amount in currency, daily interest rate as a percentage, and the number of days the amount will be outstanding. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How is daily rate different from APR?
A: Daily rate is the interest charged per day, while APR (Annual Percentage Rate) represents the yearly cost. Daily rate = APR / 365.

Q2: Are there additional fees for cash advances?
A: Yes, most lenders charge cash advance fees (typically 2-5% of the amount) in addition to daily interest.

Q3: When does interest start accruing?
A: Interest on cash advances typically starts accruing immediately from the transaction date, with no grace period.

Q4: How can I minimize cash advance costs?
A: Repay the amount as quickly as possible, use cash advances only for emergencies, and compare rates across different lenders.

Q5: Is cash advance interest tax deductible?
A: Generally, personal cash advance interest is not tax deductible. Consult a tax professional for specific advice.