Per diem is Latin for "for a day." The term, which is largely used in legal documentation, is also commonly used to identify business expenses, particularly for travel. It is also used as a way to calculate the daily interest on financial products such as a new car loan or a mortgage. Both ways require two different approaches.
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- Calculator or spreadsheet
Determine the per diem rate for your employer. Ask your manager, payroll or human resources. Let's say the current per diem rate for business expenses is £32 per night.
Determine the number of days you are travelling for business. Be sure to only count those days on which you are working for your employer. Let's say you spend five days away on business travel for your employer.
Calculate per diem business expenses. Multiply the per diem amount by the number of days for which you incur business expenses. For a per diem rate of £32 on a business trip lasting five days, you have 5 x £32 = £162.
Determine the APR or annual percentage rate. This is the stated interest rate on the interest-bearing security. Let's say the APR is 3.65 per cent.
Divide the APR by 365 for a daily rate. The calculation is: 3.65 / 365 = 0.01 per cent.
Multiply daily interest by the nominal amount of the security. For instance, the nominal amount for a 3.65 per cent, £97,500 mortgage is £97,500. The calculation is: £97,500 x .0001 = £9. This is the per diem interest.
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