How To Calculate Interest-bearing Note?

An Interest bearing note is nothing but a note that requires one to pay a particular interest on it. The interest being paid is for the use of the money of the lender. These notes are referred to as Interest Bearing Promissory Notes. A note or promissory note generally mentions the principal amount, the term the amount is borrowed for and the rate of interest.

The calculation for this kind of interest is the same that is used to calculate interest in the case of savings. The time period is determined either on the basis of Exact interest Method (365 days in a year) or an ordinary interest/banker's interest year (360 days a year). If the amount borrowed was £6,500 at an interest rate of 10 per cent for a period of ninety days the interest calculation under Exact Interest Method will be: 6500×10/100×90/365.

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