Interest Accrual

Interest accrual refers to the accumulation of interest on a sum of money either owed or invested over time, based on a predetermined interest rate. It represents the interest amount that has been added to the principal but has not yet been paid. In the context of loans, interest accrual can be seen on amounts that borrowers owe to lenders. Conversely, for investments, it represents the interest earned but not yet received. Our financial model templates include tools to calculate and track interest accrual, allowing users to understand the compounding effects, manage cash flows, and make informed financial decisions. Whether you're a lender monitoring interest on outstanding loans or an investor tracking interest on deposits, our templates provide a clear framework for understanding and managing interest accruals effectively.

Interest accrual is done when a company does not pay interest in time but instead uses accruals to pay the interest at a later point in time

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