Interest rates compounded daily
That is why rates go up and down when the fed changes rates. does the U.S. treasury continously compound interest? person will default in 100 days, you would charge $1 interest per day in the hopes that you will get your money back. interest rate per month: i = 18%/12 = 1.5% Effective annual interest rate (9% compounded quarterly) NOTE: Assume you drink a cup of coffee every day.