Calculate interest charged on money borrowed to buy securities.
Please do not make financial decisions based on these results.
What is the Margin Interest Calculator?
Calculate interest charged on money borrowed to buy securities. To use the Margin Interest Calculator, enter amount borrowed, margin rate, days borrowed; it returns margin interest, daily interest, annual cost at this rate, and shows them instantly as you type.
Comparing returns
To judge past performance use the average return calculator and the ROI calculator. For projects with several cash flows, the IRR calculator gives a single comparable rate, and the payback period calculator shows how long it takes to recover the cost.
How investments grow
Growth depends on how much you invest, how long you stay invested and the rate of return. Because returns compound, time is the most powerful input. Start with the compound interest calculator to see the effect, then use the investment calculator for contributions and taxes.
How to use the Margin Interest Calculator
- Enter your numbers. The inputs are Amount borrowed ($), Margin rate (%), Days borrowed. Use a rate of return you consider realistic; small changes compound into large differences. Fields marked optional can stay at zero.
- Read the result. The highlighted box gives the Margin interest, and the cards below show Daily interest, Annual cost at this rate. Tables and charts break it down further.
- Test other scenarios. Results update as you type. Change one value at a time to see what drives the answer, and press Reset to go back to the defaults.
Formula and how it works
Example with real numbers
Here is the Margin Interest Calculator using the default values shown in the calculator above:
Inputs
| Amount borrowed ($) | 25,000 |
|---|---|
| Margin rate (%) | 9.5 |
| Days borrowed | 90 |
Results
| Margin interest | $593.75 |
|---|---|
| Daily interest | $6.60 |
| Annual cost at this rate | $2,375.00 |
With these inputs the calculator returns Margin interest: $593.75. Change any value in the calculator to see how the result moves.
What if you change one input?
Sensitivity check: raising Amount borrowed ($) from 25,000 to 30,000 (about 20% higher) and leaving everything else as in the example above changes the results like this:
| Result | Example | After the change | Change |
|---|---|---|---|
| Margin interest | $593.75 | $712.50 | +20% |
| Daily interest | $6.60 | $7.92 | +20% |
| Annual cost at this rate | $2,375.00 | $2,850.00 | +20% |
The input that moves the result most is the one to check twice. Change it in the calculator above to test your own case.
What the results tell you
The results panel of the Margin Interest Calculator reports Margin interest, daily interest and annual cost at this rate. Compare these figures while changing one input at a time, and use the related calculators below to look at the same situation from another angle.
Method and limits. This calculator applies the formula in the section above to your inputs, in your browser; nothing you enter is stored on our servers. Investment returns are not guaranteed. The result shows what the numbers you enter would produce, not what the market will do. It is for information, not financial, tax or legal advice.
Frequently asked questions
Is margin interest tax-deductible?
Sometimes, up to net investment income, in the US. Check IRS Form 4952.
Are investment returns guaranteed?
No. Real returns vary. Use these tools to compare scenarios, not to predict results.
What rate of return should I assume?
There is no guaranteed rate. Test a range of conservative and optimistic rates, and remember that fees and inflation reduce your real return.
Are the results guaranteed?
No. Results depend entirely on the numbers you enter and the formulas shown on this page. Please do not make financial decisions based on them alone; confirm important figures with a licensed professional.
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